Greece lightning: the rise of Stoiximan/Betano

Ithaca, the most famous work of nineteenth century Greek poet Constantine Cavafy, suggests that we must enjoy life’s road because “the journey is much more exquisite than any arrival at a final destination”. This philosophy has been well and truly embraced by Greek betting operator Stoiximan.

“We are really enjoying this ride and we want it to last,” says company co-founder and CEO George Daskalakis, who has been on quite the journey himself. Daskalakis stumbled across sports betting while studying in the UK in the late 1990s. There was no such thing as sports betting in Greece until the year 2000 when retail monopoly giant OPAP opened its first shop. Having taken an early shine to the internet, Daskalakis became a gambling affiliate in 2001 and was successful in his home country before being appointed Greece manager for bwin in 2002.

Ten years later, Daskalakis assembled a team of 20 keen punters and the Stoiximan brand was born. Stoixima simply means bet in Greek, and by adding an N, he had come up with a brand name the equivalent of Betman in English. Stoiximan entered the Greek market in 2013, by which time the likes of bet365, Sportingbet, William Hill, Betfair and bwin had already been up and running in the country for more than a decade.

“Almost everybody was in Greece, so it became a David versus Goliath story because the investment we had in our hands was a little bit less than one million euros,” says Daskalakis. “We never used any loans so all the capital in our history was the €800k from back then. I don’t think many believed we could do it because we had 20 people to compete with companies like bet365. It was very difficult, but as a start-up we had great will and determination,” he adds.

Stoiximan CEO George Daskalakis

Stoiximan used that will and determination to get the industry’s best providers on board and claim some market share before really making an impact in the summer of 2015, when the Greek financial crisis had caused serious political uncertainty in the country, having rumbled on for the best part of eight years. The banks were closed for a limited time and capital controls were imposed.

“At that time, the international competition was extremely concerned, so they were very reserved about taking risks in Greece,” says Daskalakis. “It was a time where we decided that despite the uncertainty, we would push even harder to be present. We guaranteed to pay out in euros, which sounds funny now but back then there was a very real danger of Greece exiting the eurozone. By the end of 2016, we had established ourselves as the leading operator in Greece,” he adds.

Time for change

Greece has experienced a legislative paralysis since 2012. Operators that entered an interim regime back then were allowed to remain, but no newcomers were permitted to enter the market. This is all set to change with the introduction of a new licensing process and regulatory regime from 2020, in which Stoiximan’s lobbying efforts were instrumental.

“It gives us a big sense of satisfaction because after all these years, we are finally entering a fully regulated era and I feel like we played a pivotal role in changing the perception of the online gaming industry in Greece,” says Daskalakis.

Many of the regime’s finer details are still to be ironed out but the continuation of a 35% tax on gross gaming revenue is far from ideal for prospective operators. It could have been much worse however, as the government was reportedly seriously considering a ban on RNG casino games before succumbing at the last moment. Stoiximan might be the country’s leading online operator, but won’t a re-regulated market bring with it some seriously stiff competition?

Stoiximan employs nearly 700 people

“It’s a challenge but we only look at it in a positive way, as something that will drive us to become better,” Daskalakis tells EGR Intel. “We cannot be local champions and try to penetrate other markets if we want to hide from the competition. I don’t expect a huge change, I expect a very smooth change and I don’t expect the market growth rate to change significantly because it has already matured during the interim regime.”

Many of Europe’s gambling markets boast a local champion, whether it be STS in Poland or Tipsport in the Czech Republic. When a company focuses resources on its home market and understands the culture of its people, it tends to be a market leader – but Stoiximan was not content with this mantle. The operator went from being a local champion in Greece to mixing it with the big boys in locally licensed European markets. But it did not succeed immediately.

“We tried in Poland and that was quickly branded a clear failure,” admits Daskalakis. “The legislation did not change the way that we hoped it would, and we also lacked experience. But we are not shy with the word failure. It is a word that we like because it’s very difficult to succeed if you haven’t failed before. It’s very important to learn quickly from your mistakes and to recover,” he adds.

Branching out

A harsh time of it in Poland provided life lessons for Stoiximan’s management. Instead of resting on their laurels, they used those learnings a year later when the brand fruitfully went live in Romania. Romania was followed by Germany in 2018, and Portugal in May 2019. While the brand has also been live in Cyprus for some time, Daskalakis is keen to point out that the cultural and language similarities to Greece made the Cypriot site launch far more straightforward than the other three.

This rapid international expansion also birthed the Betano brand. “Stoiximan makes absolutely no sense in English,” says Daskalakis. “It sounds like Greek, so we needed an international brand. We couldn’t go to Romania and Portugal and Germany being called Stoiximan, so we ended up with Betano as our international brand. I think it’s easy to remember and hard to misspell in any language.” Daskalakis believes the brand is a nod to the Brazilian football legends of the past as the similar syllables evoke memories of the likes of Bebeto and Elano.

While the name Betano helped to alleviate pronunciation issues for Western European punters, it did create confusion elsewhere. The operator has until now been known as Stoiximan/Betano in B2B circles (see EGR Power 50 rankings), which does not exactly roll off the tongue. The operator will address this issue in 2020 with the launch of a new, all-encompassing umbrella brand at corporate level – the name of which is still a work in progress. Think back to what Flutter Entertainment did this year.

Backing the underdog

Stoiximan’s quickfire growth story from start-up to local champion to international competitor appears to have inspired a company culture based on the spirit of the underdog. Company culture has become a buzz topic for operators to discuss over the past two years. While many firms try to one-up one another by cultivating beehives or sanctioning hot yoga sessions on a Monday, Stoiximan is a company born out of necessity and uncertainty – rather than luxury.

Daskalakis says: “This is not something that has happened recently as it has always been a priority from day one. Our culture played a key role in how we managed as complete underdogs to climb our way through the ranks. For any good company, people are its strongest asset. I go by a Ben Horowitz’s motto which says take care of the people first, then the products and the profits – in that order.”

According to Daskalakis, the company philosophy is that nobody is more important than the team. No matter how charismatic or skilled they might be, the team still comes first. There are obvious
comparisons here with the Greek national football team that somehow defied the odds of 150/1 outsiders to conquer the continent’s elite and win Euro 2004.

“If we are talking about a Cinderella story of a team that managed to grow above great competition in Greece, the most extreme scenario I can think of is Greece at Euro 2004,” says Daskalakis. “I
was there for the full three weeks, watching all of the games, and still I cannot explain to you what happened – but whatever happened was truly magical. It provided great memories but, unlike that team, we want to be much more than a one-time wonder.”

The CEO prefers a different sporting analogy however. “We place a lot on our passion and on our will to win, but sometimes maybe not so much in the preparation. It reminds me of the Olympics back in 2004. Everybody was saying the Olympics wouldn’t happen and looking at Athens a few months before the games, you’d think it would have been cancelled or they would have moved them to another city. But they did take place and they were fantastic, so we have to keep that passion alive and at the same time keep improving in the preparation.”

Investor relations

Stoiximan’s trajectory has proven an attractive proposition for investors. Greek legacy operator OPAP is perhaps the most surprising backer having secured a 51% stake of the operator’s Greek business last year for €95m. OPAP is also a significant shareholder in Stoiximan, although little has changed, according to Daskalakis.

“It was actually good to have a strong investor,” he says. “It also helped us keep the Greek character of the group intact. But we have absolutely no change in how we operate. Nothing is extended to operations or to management and there are no synergies being discussed. From what I know, they also have their own online plans and are probably applying for a licence too. When it comes to OPAP as a brand, we will continue to compete when it comes to online,” he adds.

Until now, Stoiximan has grown organically but the start-up to mid-level phase is always the hottest period for growth in any industry. The tricky part is how to keep that run going to ensure the arrows on the graphs are still pointing upwards. Is this sustainable? Or will Stoiximan be tempted to delve into the ultra-competitive underworld of gambling industry M&A? Could Daskalakis picture several external companies all knitted together under Stoiximan’s newly launched umbrella brand?

The operator’s Betano brand launched in Portugal in May

“So far we have been growing organically at quite a satisfying rate,” he says. “But if the right opportunity comes up, we cannot rule M&A out. It is not our priority right now by any means, but if you had asked me the same question a year ago, I would have ruled it out completely – but not today.”

Daskalakis’s obsession with, and early adaption of, the internet saw Stoiximan launch as a digital-first, online-led betting company at the turn of the 21st century. The operator never set itself up as
a retail outlet, which allows for an agility and freedom that the likes of OPAP and Ladbrokes Coral in the UK could only dream of, having spent the best part of two decades trying to complete the transformation from retail giant to online competitor in the most painless way possible.

“We have absolutely no retail presence and we have never had any plans for retail,” says Daskalakis. “We are totally single-minded and focused online.” As with M&A, he has not ruled out launching a retail product in foreign markets, but it seems unlikely.

Many observers would argue that you cannot have serious ambitions in today’s global gambling market without owning, sculpting and perfecting your own technology. It is no coincidence that the product behind the game’s most successful players – think bet365 and GVC – was all built in-house on world-class tech stacks.

Technical transformation

The ‘backbone’ of Stoiximan was created in-house, but Daskalakis is also keen to point out that working with the right suppliers is equally important. After all, convincing A-list providers to come on board is what helped propel Stoiximan to the top of the Greek market back in 2016.

Being in control of your own technical journey also breeds a culture of innovation. The operator made headlines in 2018 for developing the ‘world’s first’ mixed-reality (MR) sports betting and casino product, available across HTC Vive, Oculus Rift and Windows Mixed Reality headsets.

The product is still in a closed beta phase with a full launch planned in early 2020 as Stoiximan irons out some of the finer details, including integrating capability for Facebook’s Oculus Quest headset. The MR sportsbook is the product of two years of hard work in the lab and offers users the ability to place live bets in a 360° environment while watching up to three games via live streaming simultaneously. Other features include VR casino games and an interactive UI that is movable with real-life hand gestures.

Despite the presumably five-figure investment, Daskalakis is measured when it comes to the chances of buzzword tech taking off and speaks with humility. “Will VR and AR succeed?” he asks. “Nothing is for certain. We are all in the sports betting industry and we know there is no such thing as a certain bet, but you also can’t write it off. I remember mobile internet being labelled as a flop once upon a time, so we have to keep our eyes open.”

When pushed further on Stoiximan’s tech innovation, he adds: “Being honest, we talk about tech innovation because it is often very easy and sexy talk but it is actually much harder to do, so I believe we should be modest about it, especially as our industry has shown very little when it comes to innovation for quite a while now.”

Stoiximan has 75% of revenues coming from mobile at present. The operator is primed for international expansion having relinquished 51% of its Greek business for a hefty price and boasts a committed workforce of almost 700. The firm finished 31st in EGR’s Power 50 list for 2019 as a new entrant, but there’s nothing to say it can’t be even higher in the rankings next year. The sky is the limit.