CEO Interview: Nicolas Beraud, Betclic, Expekt; COO Mangas Gaming

THAT THE ONLINE GAMING sector has some of the hardest working executives in the business world is without question.

In the past 18 months however, and since the online sports betting operation Betclic he set up in 2005 with Eric Moncada was acquired by Mangas Gaming in early 2008, Nicolas Béraud seems to have been on a mission to become ‘the hardest working man in egaming’. The light-hearted tone of the remark of course belies the fact that he has been in virtually constant, default work mode for the past 18 months.

Béraud is chief executive of sportsbooks Betclic and Expekt and chief operating officer of Mangas Gaming, which acquired the former two businesses over the past 18 months, and was set up in 2007 by former Endemol France boss Stéphane Courbit.

Mangas is now co-owned by Monaco luxury casinos and hotels owner and operator Société des Bains de Mer, and has just welcomed French commodities-giant Louis Dreyfus as a shareholder (see box out). Most recently, Mangas took a 60% stake in European poker site Everest Poker

If the level of activity at Mangas seems unprecedented, well, it probably is, and when asked how many chief executive roles he plans on having in the coming months, Béraud jokes that 12 is his intended target.

All change

Returning to more serious matters, Expekt chief executive Per Widerstrom and chief financial officer Joe Sanchez left Mangas by mutual consent in December due to “different strategic views in how to move Expekt forward”, with Béraud taking over as interim chief executive.

So what was wrong with the set-up at Expekt, and why was this not detected when Mangas was carrying out due diligence on the circa €125m buy-out of the operator completed in March last year?

Béraud unsurprisingly would not comment on that last point, but says about Expekt: “It was to do with how it was managed, not putting in place the right synergies and best practice. It was also about results, which weren’t up to what we wanted. I was therefore asked with Thomas [Winter, Betclic chief operating officer] and the new management team to put in place the best practices and habits that have made Betclic and Bet-At-Home successful.”

Béraud says the integration of the three businesses is now moving along nicely, with synergies and best practice being improved. But don’t synergies basically mean job cuts? “No, not at all, we’ll be hiring 100 extra staff next year,” Béraud says, “and we’ve already recruited more than 150 staff at group level, and we’re not in the mind-set of cutting jobs. We’re very much in growth mode and that dictates all our thinking. We need everyone and that includes the staff at Expekt. It absolutely does not mean job and cost cuts, and is it not at all what the Mangas board has been asking for.”

But surely there must be some cost duplication with three companies working in the same sector, as expertise must be replicated? “No, because we’re in a growth phase and are recruiting massively across the three companies, even in jobs that are ostensibly the same: Expekt has 48 bookmakers, Betclic 49 , Bet-At-Home slightly less, and despite that we have to recruit twice as many for our in-running offer,” Béraud says.

Staying on the theme of corporate development, the 60% stake Mangas took in Everest Poker for US$100m in late December is logical, since France is Everest’s largest market and will give the group the product reach it needs. However, third-quarter results for Everest Gaming were poor.

“The results aren’t as bad as the figures suggest,” Béraud says. “Everest had a turnover of US$130m in 2008 and is a decent-sized operator. Like all non-US poker companies, it has found the European poker market tough recently, but revenues are stable and the brand and technology are good. The potential is very good and the brand is already strong in our key market of France and this is all part of reinforcing our brand image across Europe.”

So does this mean Betclic’s poker vertical will leave its current Boss Media platform? “No decision has been taken. We have contracts with Boss Media and Playtech for Expekt and we intend to respect them,” Béraud says.

So integration is not the be-all and end-all for Mangas? “Exactly, and Everest for that matter is another facet of the company that is separate from the others in the group and there is no burning desire to integrate or merge it with the rest of the companies.”

Damned if they do…

French regulation is a key topic when speaking with Béraud. Does he feel like the French authorities have put operators in the unenviable position of being damned if they do, damned if they don’t when it comes to getting licensed for the French market?

“It’s true the conditions are very bad [85% pay out ratio, 7.5% taxation on gross gaming revenues] and we’d like them to be better and for the market opening to be a success, we need a working environment that is conducive to growth. But we’re a French group and have to play the game,” Béraud explains.

But there is little chance of the environment for private operators currently being spelled out by the draft laws changing by the time licences are awarded. “We have little hope of that, but there is a review clause of the legislation within 18 months of the opening, the government has agreed to look at the situation at that point. We hope by then the parameters will be adjusted to make it viable ““ which is not the case at the moment ““ so operators like us can make a profit.”

Béraud readily admits the current situation is uncomfortable, “because we don’t know what the final terms and timing of the regulation will be for many markets where we are active: Poland, Spain, Germany, Portugal.”

However, he is also clear there has rarely been a more exciting time to be involved in the industry. “The football World Cup in South Africa and the Winter Olympic games later in the year will be major events and we will be launching version 2.0 of the Betclic site, a major moment for us, and there is of course all the work going on between the different companies in the group.”

Mangas Gaming may have acquired its scale through acquisition, then again Betclic was only launched in 2005, and the group now forms part of posted gross gaming revenues of €200m in 2009; no mean feat. In the meantime, Béraud’s workload shows little sign of easing in the coming months.