Dragic’s destiny: Superbet founder Sacha Dragic tells his story from timber trader to tech titan

Sacha Dragic sits down in his spacious office at Superbet’s new headquarters in Bucharest, the capital of Romania, for the first time since the doors opened late last year. The founder, chair and former CEO of the business asks for a moment to gather his pre-prepared notes; he doesn’t touch them for the next 80 minutes. It is a microcosm for how the ex-timber trader in his native former Yugoslavia operates, and has operated, since channelling his entrepreneurial spirit and founding Superbet in 2008 after a brief spell with Mozzart Bet in Serbia.

“I have strong views about how things should be done,” Dragic explains. “I am an independent person, and I can’t work in an environment I don’t trust. If I do not believe the things we are doing are right, I can’t come in every morning to something I don’t believe in.”   

This attitude saw him break away from Mozzart Bet after wanting to take a different approach to the business. A whirlwind tour of European retail gambling operations in London, Belgrade, Zagreb and Bucharest saw Dragic take inspiration to begin on his “extremely difficult journey”, which, he says, in the early days of operations included a €10,000 customer pay-out potentially inciting bankruptcy at the firm. Dragic admits he “severely underestimated” the complicatedness of running a gambling company in the early days but, in 2011, the addition of two key figures in Superbet’s history changed the course of events for Dragic.

Dragic was originally running the company with his wife as a tag team, managing the network and finance while his spouse was doing the rest. “HR, legal, finance, she was the COO, she was the CFO, she was everything,” Dragic recalls. Then he brought in Marin Mandusic, a close friend and former COO of major Croatian operator PSK, as COO. Dragic says: “I’ve never met anyone as good at running a retail business as him. He came and put everything in order. He closed some shops, fired some people, hired others and changed the system.” Plus, a capital injection from a small private equity firm in late 2010 meant Dragic installed Angela Elisei Grebanas as CFO, which saw the “well-oiled machine” kick into gear.

Lift off

At this point, with the triumvirate in place, Superbet powered ahead. Taking inspiration from Croatian and Serbian operators, Superbet became the leading bookmaker in Romania. By mid-2012, Dragic describes Superbet as a “cash machine”, after recording between €5m and €6m (at least) a year in profit. He continues: “From 2012 to 2015, there were three to four really great years where everything was stable, and our dominance of the Romanian retail market was getting bigger every year.” Dragic heaps praise on the impact of Mandusic and Grebanas, adding that with the pair close to him, he had a “very good feeling” that the company would continue to grow at pace. Then 2015 happened. Two major moments in Superbet’s short life came to a head which would drastically alter its and Dragic’s future.

The first saw the liberalisation of the Romanian online gambling market, allowing local and foreign operators access to online customers without the requirement of an existing retail licence.  After having successfully built out its retail network and become the market leader, this change in law levelled the playing field for non-local operators and dealt a hammer blow to Superbet’s plans. Dragic notes: “It was shocking for us as a wake-up call. I knew Marin was not a big online fan, and I was even less so, and I thought this was the moment where we go bust. But we were number one and had some value, so that was also the moment I decided to sell Superbet. I felt a responsibility to my people and I needed to sell to a company I knew and trusted. And the only company in that moment was Paddy Power.”

Discussions with the Irish bookmaker began, with Dragic open to selling an initial 49% stake in Superbet. In the summer of 2015, a deus ex machina altered the course of history. Paddy Power and Betfair merged in a £5bn deal and, with Betfair’s reluctance to take on more retail operations, a partial acquisition of Superbet was dead in the water, leaving Dragic and his business facing a game of catch-up to launch an online vertical to fend off a new challenge. With rival local and overseas operators gearing up for a September launch, Superbet was scrambling. Expectations were low; with Dragic and Mandusic deciding a best-case scenario would see online return 30% of group turnover within three years.

After ploughing ahead with its in-house, retail-focused sportsbook tech and a wallet solution from a small Maltese firm, Superbet finally went live online in February 2016. By May, turnover from online had surpassed retail and Superbet had soared to become the third-largest online operator in the regulated Romanian market. Dragic looks back with almost a sense of disbelief. He says: “The website was going down on the weekends and Champions League nights – that was normal. Punters were complaining and it was strange as Superbet had always been the darling of the public. It struck me that with such a wrong approach to tech and downtimes, we still became one of the biggest operators. In the summer [of 2016] we became number two behind Unibet, and in February 2017, a year after we launched, we were number one.”

Superbet faces a battle against local and overseas operators as the CEE region grows in prominence

After fighting through the tech struggles, which Dragic has not forgotten and now underpins the operator’s strategy, 2018 saw the group launch its native apps. Its online market share doubled in three months. Superbet’s market share in Romania puts it 30 percentage points ahead of its nearest challenger. A far cry from the original 30% of total turnover prediction.

Home comforts

Eyes are now turning towards this corner of the world. Central and Eastern Europe (CEE) is a region that is garnering more and more attention, with Entain’s purchase of leading Croatian operator SuperSport (completed in November 2022) solidifying its potential. Indeed, Entain has pegged CEE as a €5bn opportunity. However, Dragic issues a warning to non-local firms over expectations about making quick cash.

He details how Superbet’s own move into Poland, despite its knowledge of CEE, was littered with mistakes that saw it take huge financial hits. Dragic says a new approach was needed, which included adding a management and product team that understood the “Polish mentality”. He still expects Superbet to expand its CEE presence with targets including Czechia and Slovakia.

“I will always feel more relaxed in Central Europe when new rivals are owned by big international operators or shareholders,” he muses. “It is not as easy as it looks when you sit in a boardroom in London. You need a deep knowledge. They are facing guys who understand the market and know how to guerrilla fight in these territories.”

Those other locally well-entrenched operators include the likes of Poland’s largest bookmaker, STS, and Prague-based Fortuna Entertainment Group, the latter now under the tutelage of former Paddy Power man Victor Corcoran. But it is another ex-Paddy head who is making waves at Superbet.

Here’s Johnny

While Dragic still has a firm hand on the tiller, there came a point when necessity dictated that he made the move upstairs. The desire to add current CEO Johnny Hartnett to the fold was a long time in the making, with the Irishman having caught Dragic’s attention during the ultimately unsuccessful acquisition talks with Paddy Power. However, a Succession-style battle to convince Hartnett to join the firm ensued. In 2018, Dragic was looking for a new COO to support him as CEO, and so he pinpointed Hartnett as the primary target.

At the time, Hartnett was playing a key role for Flutter Entertainment in acquiring FanDuel, which has since gone on to be the top sportsbook operator in the US. The first approach from Dragic for Hartnett was rebuffed, with Dragic initially accepting the rejection. That was until close confidante and Superbet board member Ralph Topping stepped in to alter the course of the company’s history.

Dragic explains: “Ralph told me he couldn’t believe I would just leave it and not fight at all. And that is Ralph all over. So, I came back to Johnny again and things were changing for him at Flutter. I then met him in London and we spent three days talking and agreed on everything. It was in the last hours of those three days that he turns to me and says, ‘One small thing, if I came in, it would be as CEO’. I was in shock. How could I give my baby to someone? But in the end, it took me less than 24 hours to decide.”

The rest, as they say, is history. Hartnett joined as CEO in 2018, with Dragic stepping up to become chair of the board. In giving his “baby” away, Dragic became free to focus on other ventures, which left Hartnett in the driving seat for the next stage of the company’s growth.

Target practice

Along with continuing to expand Superbet’s presence in CEE and extend its dominance in Romania, Hartnett turned his attention towards M&A, kicking off with acquiring a 60% stake in online casino operator Lucky7 in 2020. This was quickly followed by a somewhat surprising move to acquire 100% of Belgian operator Napoleon Sports & Casino from Waterland Private Equity in July 2021. As is the case for large operators, investor decks are pushed across desks at a constant rate but, at the time, valuations were soaring across the industry.

Dragic praises Hartnett’s eye for a deal, with the CEO having passed on several opportunities after not viewing them as cost-effective. After the case for Napoleon was put forward, an opportunity to expand beyond Superbet’s CEE heartlands at an affordable, yet undisclosed, price was snapped up. Dragic insists that despite the lack of allure over the Belgian market, it could turn into the “Western European Romania” in just a few years and act as a springboard for Superbet’s expansion in the region, either organically or via more M&A.

And despite the darkening macroeconomic environment, Dragic remains confident in Superbet’s balance sheet. A €175m strategic minority equity investment from Blackstone in 2019 added financial muscle to the firm as it gears up for the next stage of growth. As a company that is no stranger to M&A, Dragic hints more moves could well be on the horizon. He says: “If you exclude Entain and Flutter, I think Superbet is the best-placed company to do M&A outside of the big American firms as they aren’t looking at assets in geographies that interest us. In this moment, we are focused on launching in Serbia and transitioning Napoleon to the proprietary platform.

“I don’t see what kind of sexy opportunity could happen in the next six months to take away Johnny’s focus from those targets. Post-H1 2023, I think we will be very open-minded if something comes on the table at the right price,” he adds.

For a man with a self-described “bug” for entrepreneurialism, it wasn’t a case of coasting in retirement following Hartnett’s accession. The Serbian launched Superbet Ventures, a venture capital (VC) arm born out of a family office that now has the financial backing of both Blackstone and Superbet. Stepping up to become chairman opened new avenues for Dragic, with the fund now looking to play a key role in the future of the company. He tells EGR Intel the initial budget for the VC is finalised for 2023, with that budget set to grow from 2024 onwards, but financial return on investment (ROI) is not the ‘be all and end all’. In fact, Dragic describes the arm as not a “classical VC”, in so much as the companies it is looking to pour capital into will be those that have a lasting impact on the gambling industry.

“My thesis is that within the next 10 years, the industry will promote a lot of transformation,” Dragic explains. “The new generations coming have totally different habits and totally different interests. I have kids from the age of 22 to 33, but already my 22-year-old is saying to me, ‘Those youngsters are so different’. So already, 14 to 18 are different, and then eight to 12 are different again, which means these habits will influence how the industry will change.”

Superbet Ventures is led by Superbet’s former head of M&A, Joe Bryan and Paul Neagoe, with the mission statement of targeting the intersections of sport, entertainment, betting, gaming, crypto and Web3. Despite the difficulties faced by the latter two in 2022, given the dramatic collapse of cryptocurrency exchange FTX and the demise of non-fungible tokens (NFTs), Dragic still holds out hope for the transformation of the industry.

He argues the future will be a competition for “time on devices”, not just between operators but for all content. He continues: “I’m anticipating that within the next 10 to 15 years we will probably have between four and six verticals of business compared to the sports betting and casino today. And out of those extra verticals, at least one of them will come through Superbet Ventures, which I think would be a great achievement.”

What’s Happening?

Technology is evidently at the forefront of Dragic’s thinking as he’s not standing still. While he detailed the tumultuous journey in the early days of Superbet, tech became a bugbear for the then-CEO, and he saw it as the springboard from which to differentiate the operator and move to the next level. From its retail operations between 2008 and 2015, Dragic reveals his frustrations of working with third-party suppliers, so much so that just months after Superbet had penned a supplier agreement for its retail operations, the group’s rivals were able to snap up the same deals. Dragic went to Mandusic and explained the need for proprietary tech. Dragic colourfully describes his approach: “I don’t compromise on things I feel are strategically important. I said to Marin then that we need to have our own software, so just find a way to get it,” he reminisces.

This forthright approach saw Superbet acquire a Croatian supplier, out of which its proprietary retail platform was built. This gave it the cutting edge over its rivals, which Dragic says were unable to challenge for up to 12 months due to their relationships with third parties. The next challenge came with the advent of online gambling in Romania. After becoming a market leader, despite being on what Dragic calls an “unstable platform”, he pushed ahead with a “totally crazy idea”.

In 2016, the boss decided to cap Superbet’s profit at €10m. That would fund dividends, the group’s retail arm and investment into the company. Everything north of that would be ploughed into technology. It was an ambitious plan that Dragic quickly realised needed finetuning and a shift to M&A to deliver his dream of being a tech giant.

Dragic recalls: “We were trying to build our own tech teams, but it was impossible because we didn’t have a clue what we were looking for. Instead of building our teams, I just started to acquire companies. In 2017, we acquired three companies: Score Alarm (now Superology), Axilis in Zagreb and IO Sports in London. I decided the companies should remain autonomous, but the founders were paid partly in cash and partly in Superbet shares so they remained part of the team. And then we just gave them money.”

In the five years since, Superology’s headcount has leapt from seven to 80, Axilis now boasts around 300 engineers after having 45 when acquired, and IO Sports currently employs several dozen  people after starting with just a handful. However, exponential growth and success in delivering proprietary tech catalysed Dragic’s next strategy. There is a sense that he isn’t 100% satisfied at any given point on his journey, especially at this point in time more than any other since 2008. A desire to amalgamate a fragmented company due to M&A and a future-looking strategy to become a technology business above all else, led to the creation of Happening last year.

The holistic tech division brings together the company’s widespread tech teams under one umbrella, led by Superbet CTO Bruno Kovačić, with a promise from the group to deliver on Silicon Valley-scale projects. The new division is already poaching talent from the likes of Meta and Google. Dragic’s strategy came following a tech debrief with former Superbet CTO and now special advisor Finbarr Joy in Vienna, Austria.

Dragic reveals his admiration for bet365 as the leading tech operator in the sector but notes that Joy convinced him to expand his horizons, to look beyond the industry and take inspiration from leading tech companies on both sides of the Atlantic. Superbet now boasts board members from TomTom and Adobe, who are guiding the operator’s strategy around technology. Dragic is bullish, once again, on the scale of Happening’s capabilities.

“We are far from Flutter, bet365 and Entain in terms of global footprint but I’m very comfortable that Johnny and his team are surely the best in the industry,” Dragic says.

“Tech-wise, we’re just on a different planet. We are using under 3% of Happening’s capacities because the technology is so powerful. We are launching our full end-to-end technology in Serbia, which will be the first market, and then we will be fully deployed in the next 18 months, which means Romania, Belgium, Poland and hopefully Croatia. From there, we can say what the plan
of attack is.”

Dragic rules out Superbet becoming a B2B firm, arguing why would he supply his rivals with the tech that differentiates the Romanian firm. An idea he moots comes in the form of a cloud-style B2B service for the likes of national lottery suppliers, but to support the marketshare challengers, he quips, is currently “not in his priorities”.

Talent pool

With plans to further bolster Happening’s workforce with an additional 150 roles to add to the existing 500-strong headcount, Superbet does face competition. The adage of ‘build it and they will come’ only works to a point, and with Eastern Europe a hotbed for technical talent and expertise, there is the requirement to go one step above to acquire the best of the best. Dragic notes the importance of attractive packages, but also the need to make staff comfortable. Superbet’s Bucharest headquarters, which opened last year, spread across two-and-a-half floors covering 10,000 sq m at One Cotroceni Park, are testament to this ambition. The base also makes up part of Dragic’s plans to build a brand, giving his employees a sense of pride working for Superbet.

Dragic says: “We’re putting millions of euros into the comfort of our employees because we think it is very important. It is important to build the brand and make them feel they are part of the story of an Eastern European company because, aside from Superbet, there are not many companies starting in Eastern Europe that have a real chance to become a global leader. But we are also very diverse, with talent coming from the US and UK.”

The 10,000 sq m Bucharest HQ is a symbol of Dragic’s plan to build a brand

Superbet and Dragic’s Eastern European roots keep the operator’s feet firmly planted on the ground. The founder speaks with genuine care when talking about giving back to Romania. As the nation continues to grow in stature on the world stage, with its place in both NATO and the EU – despite its setback after being denied admission to the Schengen Zone after Austria vetoed the proposal – attention is turning towards the country. Dragic recognises that Romania is on the cusp of change in terms of economic output, and is deploying funds, both for sponsorship and corporate social responsibility, to give back.

Superbet is the title sponsor of Romania SuperLiga, the country’s top-tier football division, and is the front-of-shirt sponsor for Rapid Bucharest. It also holds the stadium naming rights at Rapid’s home ground, the Superbet Arena. Furthermore, the group sponsors teams in volleyball, basketball and handball. Touching on the importance of sponsorship, Dragic views the approach as two-pronged: marketing and support.

“In Romania today, we don’t have a lot of investment in sport because the ecosystem is not ready. So, I think gambling companies as sponsors are very important for the economic models of the clubs. What Superbet gives to those clubs is important to their budgets, and they are not able to compete without this investment. It is a combination because, yes, Superbet needs marketing, but it is also helping the sport because our industry is based on it.”

Dragic dismisses attitudes towards gambling companies deploying these strategies to gain customers and revenue. The Superbet Foundation, which is run by Dragic’s wife Augusta, has supported Romanian sporting and education activities since its inception in 2019. The body is the global strategic partner of the Grand Chess Tour and has supported youth development in the sport across Romania, Croatia and Poland. The foundation has also mobilised support during the Covid-19 pandemic and the ongoing war in Ukraine, both topics close to Dragic’s heart.

He explains the rationale to EGR Intel: “When Covid started, the first thing I said to Johnny was let’s help the hospitals. We gave money to hospitals to buy respirators and ambulances. It was just a reaction. We weren’t concerned with the impact on our ROI, it was a normal thing to do. It was the same when the war in Ukraine started and we gave financial help to those in Romania and Poland to help the refugee situation.”

Despite these efforts, Dragic confirms that there have been discussions around rebranding the Superbet Foundation to avoid any potential political quagmire and to be able to operate effectively and efficiently in helping the community in the way the foundation feels fits. He also reveals that concerns were raised after the Superbet Foundation donated funds in order to support schools for equipment and trips. “Politics can be stupid,” he bemoans.

Unfinished business

Superbet has well and truly burst onto the scene. The three eras, between 2008 and 2015, 2015 to 2019 and 2019 onwards, have gone by in a flash. The year 2018 saw the firm break into the EGR Power 50 rankings after finishing in 49th place. Fast forward to 2022, and Superbet sits in 11th place. The company continues to outgrow its confines, like a snake shedding its skin, requiring it to take the next step of its journey. The Blackstone investment gave Superbet a shot in the arm, with the two firms still working closely together, but Dragic reveals that Superbet’s position as a private company is nearing its end; the next shedding is about to come in the form of an IPO.

“We’ve already started the process of the IPO readiness,” he states. “We hired a director for investor relations, and we are working on this. I’d say I don’t see us being public before late 2023, but I also don’t see us not being public by 2025.”

Dragic confirms the company will list on a Western European exchange and details his thinking behind why the process hadn’t begun earlier. “Our midterm plan was always that we wanted to IPO the company. I haven’t felt the need to do the IPO [yet] for liquidity or any other reason. Being public would have made it easier to buy a company but 70% of my decision to go public was to be able to give stock back to the employees. If we are successful, we are all together successful, that is the only way.”

Sacha Dragic: “We’re putting millions of euros into the comfort of our employees because we think it is very important.”

So, an IPO will mark another epoch for Superbet. Dragic’s baby is growing up at a rapid pace and he has entrusted Hartnett to watch over it. The respect he holds for the ex-Flutter man, as well as all his close colleagues, is evident. Dragic heaps praise throughout on his former and current employees, including Avi Barel, Ivan Klaric and Marcello Magaletti, the group’s current deputy CEO, who all played crucial roles in the company’s development. The days at the coalface may be over, but the passion for Superbet runs deep in Dragic. From timber to tech, the Serbian has no plans to slow down as he remains an omnipotent presence, regardless of Superbet’s changing dynasties.

He says: “People look at us as an Eastern European company. We wouldn’t be investing €100m a year in technology if we just wanted to be an Eastern European company. As a company, we are an iceberg. People see what is up, but 80% of the stuff is down. They will see it in the next two to four years, trust me.”