Taking the lion’s share: LeoVegas CEO on the operator's meteoric rise

A year and a half on from listing on the Nasdaq Stockholm stock exchange and willingly offering itself up to the pressures of its shareholders, LeoVegas has matured into a leading, multi-vertical operator with a more seasoned understanding of the industry. A testament to this shift is the fact LeoVegas was the biggest climber in this year’s Power 50 rankings – soaring from 31st to 14th.

Despite its strategy shift, the Swedish firm has in no way lost sight of its original ethos of “leading the way into the mobile future”. And, as CEO and founder Gustaf Hagman initially predicted, mobile gambling has shown no sign of slowing down. “I think mobile and mobility is here to stay but it is taking a different direction with VR and AR,” he says.

“The future is mobile, whether it is smartphones or something more modern, it doesn’t matter. We believe the mobile approach is the future and we have to be very adaptive to what’s round the corner.”

In the early stages of its public listing, Hagman was fearful of the company losing its core entrepreneurial value. But by nurturing its internal culture and drive to create and innovate new products, he claims innovation is rife among the staff, with more product testing and exploration being carried out now. “We thought the company would be less entrepreneurial, but that hasn’t happened because we really addressed the issue by working a lot on the company culture.

Gustaf Hagman, LeoVegas CEO

“It has not become less innovative, but it’s almost more so than it was two years ago. There is so much going on and there are so many great ideas in the company that we are exploring and taking care of.” Hagman continues: “I believe the fundamental driver [of our growth] is the technology leadership and the data-driven approach and company culture.”

The chief exec, who juggles his time between the firm’s Stockholm and Malta offices, traces the tech-first attitude back to the company’s early investment in its technology subsidiary, Gears of Leo. He dabbles with the term “Silicon Valley”, tossing it into the conversation to affirm the operator’s fresh and modern outlook on egaming technology. “Twenty-five percent [of our overall staff] work within the tech and product development areas,” says Hagman, adding that although the tech arm is marketed separately to recruit technology staff, it is very much a part of the larger group LeoVegas AB.

But with the Nasdaq Stockholm listing came a wealth of benefits for the then medium-sized company. “I love the transparency and I also love the way that if you are publicly listed, you can be trusted in a completely different way when it comes to dealing with suppliers and regulated markets,” reveals Hagman.

“I also think, in order to attract the right kind of employees, it’s been beneficial. It’s certain some people prefer to work for a publicly-listed company. We get more applications for senior roles now.”

The world’s local operator

Interestingly, it seems the full throttle, product-driven approach has in no way hindered LeoVegas’ ability to lead in other crucial growth areas. In broadening its geographical expanse, marketing plays an increasingly crucial role for the firm, which counts the Nordics as its core market. Ahead of Sweden’s forthcoming regulation, the country enjoys a relatively lax approach to online gambling advertising, and LeoVegas is one of many to take advantage of this – in fact it stands out against its competitors with its unique stance on global marketing strategies.

Take the Swedish skiing champion and LeoVegas brand ambassador Jon Olsson as an example. Olsson’s penchant for outrageously tuned super cars combined with his vast internet following has catapulted the firm’s lion head emblem far across Sweden. Added to that is its latest data-driven partnership with Swedish public information search engine hitta.se, which sees Leo Sports’ live odds integrated into the map function.

“When you conduct marketing, you have to act very locally and adapt everything to your local market,” Hagman comments. “That’s why we have our country managers and they are the ears on the ground, doing things with local ambassadors, sponsoring local teams and doing local PR, and even adapting in the customer support.”

He says LeoVegas’ name is much more widely recognised as a result of having built a strong core brand through marketing. Unlike many of its top-tier competitors, the company continues to operate its entire product portfolio under the single LeoVegas brand*. “I believe in building a strong core brand, but saying that, I would not take for granted that we will stay as a single brand company forever. Look at Coca-Cola, they have their really strong main brand but they own a lot of other brands as well within the group.”

With this in mind, a recent move saw LeoVegas acquire the domain for LiveCasino.com. Although it has been launched initially as an affiliate site, featuring news and tips on the rapidly growing live casino vertical, Hagman’s future plans are to develop the domain into a standalone live casino site. In the firm’s Q2 interim report, Hagman said the site had helped position LeoVegas to take advantage of live casino’s rapidly growing popularity.

It is through specifically targeted marketing campaigns that the company has avoided being perceived solely as a casino operator. Its Kambi-powered sportsbook was launched in May 2016 to coincide with the UEFA Euros, and this year the product has been extended to Denmark and Ireland, two markets that Hagman has lofty ambitions for. He previously told EGR the firm would take the number one sportsbook spot in the Irish market, thanks to its rapid betting times and extensive sports offering. “We think having the fastest sportsbook is crucial, being only on mobile,” he said, following the release of LeoVegas’ Q1 results.

Marking its territory

Aside from extending its product portfolio, the company also made its entrance into the M&A sphere earlier this year with the acquisition of the Italy-facing casino brand Winga. The company has taken an otherwise organic strategy to driving geographical expansion, which Hagman says has not been deliberate: “Our strategy is to grow LeoVegas into certain markets. In this case with Italy we spoke to the authorities and it was more than a two-year wait for a licence. So we just figured we’d see if we could find a small team that might be for sale and we managed to buy them.

“Of course talking about countries where we are already active as LeoVegas, then I believe if we make acquisitions in those countries it will be more for strategic value and add something we don’t have ourselves within a local market. There is so much more to do in this industry. We are constantly looking into new areas, both geographically and with new products.”

He is quick to point out the firm is not shying away from potential M&A, and when an opportunity arises that could add to its growth and open opportunities in a new market, Hagman will jump at the chance. “[With Winga] we’ve got 2% market share of the Italian online casino market and we’re going to work to rebrand everything to LeoVegas and integrate to our brand. I think that’s a good example of how to make growth acquisitions.” Adaptability is the key force in any successful M&A culture, Hagman asserts.

“The driver [of our growth] is the technology leadership, the data-driven approach and company culture” 

Back on product, the chief exec says geographical expansion and tech development should be intrinsically married. “Product can just leverage on everything, in all markets, at the same time,” he adds. “[But] you need new markets in order to expand and widen your reach.”

Most recently Hagman has set his sights on Germany and increasing the firm’s presence in Denmark, a market that, since being liberalised in 2012, has grown to be worth almost £840m. The focus for the moment is specifically on sportsbook.

“Yes, we’re putting a lot of effort into building a great sportsbook for the 2018 World Cup. Of course we’re not the only ones doing that but we’re putting a lot of innovation into the teams building that,” says Hagman.

From the inside out

Along with geographical expansion, the company has this year expanded internally and grown its workforce by 70%. Stockholm-based senior management members and tech employees will move into NetEnt’s former office space in December, in order to accommodate increasing numbers of staff. “In Malta we’ve also expanded into two new floors, so it’s been a lot of growth. In December 2016 we were 340 members of staff and today we are 510,” says Hagman.

Additional tech staff are also split between second and third offices in the Swedish cities of Vaxjo and Västerås. Hagman believes his firm is leading in its investment in tech staff. “The focus is very clear,” he comments. “Our passion is leading the way into the mobile future. That means we shall be the leader in the industry, we shall be innovative, and we shall be a role model.”

He considers the recent launch of the firm’s apps on the Google Play Store to be another key driver for improvement, as it cements the mobile-first attitude of LeoVegas AB. “It’s a game-changer, [and] we are planning a lot of universal ad campaigns and mobile engagement campaigns [around the app].”

Hagman’s unwavering confidence in the company he built and pushed into the periphery of the industry a mere five years ago is evident in his financial investment of 8,000,000 shares, securing him as the largest shareholder.

His projection for the upcoming year is to reach a financial target of €300m, and to grow at a faster pace than the rest of the industry. “I’m very pleased with the growth we’ve had so far and I’m positive for the future as well,” Hagman notes.

So what does he put down as the reason his company has leaped from number 31 to the top 15 in the Power 50? “We’ve been recognised in various awards and publications, like the Online Gambling Quarterly, where we’ve been listed as number one in the industry. I also believe all the hard work from our product, casino, sports and payments teams is actually visible among our competitors and suppliers. We work very closely with our major suppliers and we sometimes push them slightly too much. You will see us climb even further next year.”

*The above interview was conducted prior to LeoVegas’ acquisition of Royal Panda