INTERVIEW JENS VON BAHR
because it’s something they understand and it’s less complex. Lastly is the focus of localisation where you as a foreign operator have to go in and compete against local players. So how can you do that, be perceived as a local player and create trust if you do not have a good brand? The best way is to offer native speaking roulette [dealers], which caters for a large majority of your end users because it’s very often the most popular game. It is then that you establish trust and the perception of being local and then you can continue rolling out other products as regulation allows. eGR: New markets are an obvious path to growth but are there any other areas where you see Evolution pushing new boundaries? JvB: We have the strongest distribution network in Europe by far. One way to capitalise on that is to extend our offering and release more products moving into new areas of content. We’re going to sign a deal shortly where we’ll have exclusive rights to a very prominent UK TV show and have the exclusive rights to take that TV show live and online in the UK. It’s very close. I also recognise that it’s very important to move into other distribution channels. Like everyone else, we’re moving our offering to mobile in the short term with iPad the main priority – that’s crucial for growth. For our games speci?cally it’s going to take a few years for our experience to work on mobiles. We’re also very excited to move this experience into social [gaming]. We won’t do this alone but through a joint venture. We’ll provide the content but not strike a direct deal with Facebook – we’ll go via an already established content provider. I think it would work very well on Facebook and we will do that eventually but there are already companies out there that are providing gaming content, even exclusively casino content. Our ?rst step will be to go through one of those that already has an integration through Facebook. eGR: There is no live dealer on social platforms so far. What will it take for it to succeed? JvB: The key to success when it comes to launching any gaming content on social networks is that you need to have a clever mechanism that attracts players and makes them willing to pay to have access to the next world or level. As you’re not gambling with real money there are certain things you need to address. With the most beautiful live roulette in the world our games don’t have to be changed, but the mechanism needs to be tailored in order for it to become pro?table in social media. eGR: How much is the company worth now compared to year one? JvB: The ?rst couple of years are not interesting in terms of percentage growth because you start at such low levels, but in the last two years we have grown more than 120% a year. We are by far the most pro?table ?rm within the live dealer space but we also have the highest costs and that’s why we are in this position, but we expect to continue growing quicker than our competitors. Three years ago we had two real competitors and a 30%
market share. Today there are around 15 competitors and we have 60% to 70% market share. eGR: eGR understands the company has been subject to a number of recent bids, one of which has come from a large listed gaming software supplier. Are you willing to sell or to buy in order to build for the future? JvB: Those are evil rumours potentially placed by competition because it weakens our position where we can get new deals when we compete against one another. I cannot rule out that we will be involved in any M&A activity for the next 18 months but I think if I had to choose I would say it’s far more likely that we would acquire a company than sell. We have been very aggressively approached in the last two years and those have intensi?ed lately. It’s always nice to be popular. We believe, without sounding arrogant, that we’re in control of our own destiny and that this niche will continue to grow, that we are in a very strong position and, if we’re not arrogant and we continue to reinvest and improve our offering, we have a fair shot of remaining there. We expect 100% organic growth for the next 12 months, but that’s excluding new products, new markets and new distribution channels. At any given time I would be irresponsible to my shareholders not to consider an interesting bid. eGR: How much would it take to buy the company? JvB: [Laughs] We’ve had ?ve different concrete approaches. We’re sitting on a lot of strategic value so a normal multiple would not apply. eGR: What are your short and long-term priorities? JvB: I saw an eGR news?ash saying New Jersey would open in September. This is [the US] one of the most important long-term opportunities for us. Live is the natural bridge between offline and online, therefore if you are a land-based casino your greatest asset is your brand, your clients and in particular your VIPs. Vegas casinos invest huge sums to keep and extend the lifetime value of their most important players. Competition is ?erce and the guy next door will do anything to steal those VIPs. As soon as regulation allows, the most natural product when moving a casino online is to create an extension of your offline operations live. By this I mean setting up a live casino operation on the gaming ?oor. It could even become an event in its own right and that would be a bonus. That kind of investment would be justi?ed in order to create additional goodwill from your VIPs but they’re also able to continue playing from the comfort of their home against their favourite dealer who they’ve just ?nished playing with inside their favourite casino. It’s a no brainer. I’ve had many discussions with casinos about this and they’re all for it. Now they’re just waiting for regulation. Many of these casinos have 50,000 unique visitors a day. If you imagine making 10% of those gamble a bit more, that is, in absolute numbers, a relevant ?gure. That could be on an intra-resort level. You could lie in your hotel room or by the pool with your iPad and gamble on a real table in the casino.
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