Analysis: Unibet's blueprint for future growth

Tuesday’s Unibet results yet again revealed impressive online growth for the Swedish-listed operator with the company posting a 28% quarterly year-on-year rise in gross winnings revenue (GWR), up from £43.8m in 2012 to £56.1m. And there were few shocks as to the key ingredients for this success.

With the Nordics accounting for 55% of Unibet’s total GWR, this will certainly continue to be the operator’s most important region for the foreseeable future. But chief executive Henrik Tjärnström believes new European regulated markets will also be an important driver for growth in the future as it transforms from a dot.com to a dot.country operator.

Regulated Europe

Mobile unsurprisingly continues to be an important area of growth and now accounts for 23% of GWR, up from 8% in Q3 2012, and there is little doubt that Unibet will maintain its focus on this part of the business. In September the operator appointed Robert Smith to the newly created role of head of new channels who is responsible for leading mobile, tablet and television divisions as part of a strategy to increase integration across the departments.

But speaking to eGaming Review, Tjärnström said Unibet was confident its push into countries such as Belgium, Netherlands and France would complement its strong performance in its more established markets. “They are already key markets for us and we foresee them being even more important in the future,” he said. “We have a pan-European approach where we are present in most countries in the EU and we believe that’s a core strength in our business in not being reliant on one single market.

“We also have a market leading position in Belgium and Holland and a strong position in the French market,” he added. “From what we’ve seen in Belgium and Denmark, it’s important to be a top three operator, especially after re-regulation, and we will continue to transform from a traditional dot.com to a dot.country operator.”

France has also been highlighted as being particularly important for the operator where it holds a comfortable top five position after re-entering the market and has been able to grow its sportsbook consistently despite little investment. But its success in the country will be highly dependent on the re-regulation currently under discussion by its politicians while Tjärnström concedes growth in the troubled French online poker market would be more difficult to achieve, despite Unibet’s product seeing fairly stable development.

UK optimism

Unibet can be more confident of making inroads in the UK where it recently launched its new horse racing and greyhound product, which it claims is performing well. Unibet has ambitions to continue its push into the UK despite admitting its revenue contribution will be negative for the immediate future due to its position as a relative newcomer in what is a highly competitive market.

“We are seeing very positive signs in the UK market, albeit from lower levels, but we are building for the longer term plan and the communication we did earlier in the year was on a five-year horizon and perhaps even slightly longer,” he said. “The UK in the long-term is a really attractive market and we are slowly but surely developing our product offering.”

Operators are currently preparing themselves for the introduction of a point of consumption tax in the UK. Tjärnström said the company would back an industry push for a 7.5-10% tax rate but nonetheless suggested the proposed 15% figure would have little impact on Unibet’s long-term UK strategy.

The operator’s push into the UK looks to be in its own hands and is well-positioned in other new European markets, but Unibet will not be reaping the benefits from these regions any time soon which is something Tjärnström himself admits. “It’s a long term plan. We started transforming from a dot.com to a dot.country company over the last two to three years, that’s definitely here to stay and will be in the future.”