Supercharged: how Superbet has its eyes on multi-channel domination in CEE

A sunny morning in Rome and there’s a hint of optimism in the air as COO of Central and Eastern Europe (CEE) operator Superbet reflects on 2020, despite the doom and gloom of the coronavirus pandemic. “2020 has been an excellent year for us, especially given the circumstances. In terms of performance, we more than doubled our turnover as a group and our profitability has been extremely resilient. And I think we coped with the situation probably much better than many other competitors locally,” Marcello Magaletti remarks. The former banker, who joined Superbet over two years ago, says Romania continues to be a big source of revenue and profit both on the online and retail side. And that is even with about 880 of its shops needing to close and a further 100 in Romania having to operate at limited capacity, which has in turn had an impact on revenue. However, Magaletti points out that, thanks to government aid through the furlough scheme in Romania, he feels Superbet has traversed the situation well. “We want to continue to accelerate this growth and we’re going to do that through continuing to invest in our product and technology. And of course, to accelerate the investments in marketing, which we have done. Certainly, for Romania, we continue to gain market share and the market is growing very well,” says the COO.

Even with Covid-19 wreaking havoc on its retail portfolio, Superbet has been well-equipped on the operational side in terms of safety for its employees and customers in shops. However, the pandemic has accelerated the migration from retail to online in Western and Eastern Europe, says Magaletti, speaking to EGR Intel from his home office in the Italian capital. In Poland, 80%-85% of the market is online, while Romania is more dominated by retail. “But during this pandemic, we saw a massive increase in the online market so it’s obviously nice to operate with that tailwind. And I think we were able to grow even faster than our competitors. When I look at Romania as a whole, given that our turnover more than doubled, you can see how we were able to maintain a pretty good pace,” he adds confidently.

Customer champion

For Superbet, multi-channel is at the heart of the business and it prides itself on becoming “the multi-channel customer champion in Central and Eastern Europe”. Already, over 50% of the tickets placed in retail are prepared on a mobile device, either via an app or website. “We’ve taken some initiatives to help that transition either through promotions or product features and that is something that we want to continue to invest in,” he explains. Superbet’s COO says there is still an opportunity for multi-channel in the CEE region since not many international competitors operate there. He believes its Romanian model is “state of the art” and can be exported to other countries in a tactical way. “With Croatia and Poland, we’re going to be much more tactical around our retail footprint, and use it heavily paired with marketing in order to push our brand and brand awareness in this market,” Magaletti comments. As part of its multi-channel strategy, retail customers can prepare tickets, monitor the progress of the game and receive alerts/notifications without being logged into their account. If they are logged in, customers will also be able to deposit and withdraw in Superbet’s shops. Magaletti attributes part of the retail success to the social aspect of betting compared to the more individual experience of betting online. Tapping into the social appeal, in the summer Superbet created a social network for its customer base in Romania and Poland, which he claims is a “first of its kind” in this format. The offering is available via app, with plans to roll it out on the web too. “It gives the opportunity for customers to interact with each other about the game or specific bet, placing the same bet that your friend has placed and to make comments on the results. And that’s created, especially in Romania where we have such a large base of customers, a surge in terms of interactions, and the numbers are growing exponentially,” he remarks. The CEE-focused operator, which became a member of the International Betting Integrity Association in July, is also developing a multi-channel wallet. In the summer, it released a membership card for online and retail (Super Club), which allows customers to benefit from specific promotions. With the Euro 2020 tournament postponed until 2021, Superbet used the time to focus on these new, larger projects. “I expect to continue to innovate on that and we continue to put investment into it. “The final thing is the ability to have pricing. So, with our team in London and their models, it gives us the ability to actually show the retail customers computer-generated pricing based on historics and statistics,” Magaletti reveals.

Network access

During the months when sports was on hiatus, Superbet saw a shift in betting activity to other verticals. The first was a rise in cross-sell to casino and live casino, a switch from tennis to table tennis in Russian tournaments, and a conversion from football to e-football (FIFA). “So, we accelerated our integration of a lot of esports, including streams, and that has allowed our customers to continue to enjoy the experience, even while the sports calendar was challenged,” the COO says. One of the most significant events enabling Superbet to realise its growth ambitions was its strategic partnership with private equity firm Blackstone in 2019. The £175m investment has helped the operator to expand in a more aggressive fashion as well as open new doors to access Blackstone’s network. “That gave us an opportunity to work side-by-side with companies like Amazon, for example, that work with us on an innovation project.” But despite Blackstone sitting on the board, Magaletti is quick to highlight that the ownership of the operator still resides with the original founder, Serbian entrepreneur Sacha Dragic, who has his own long-term vision for the firm. With Blackstone’s support, Superbet has also been able to more aggressively scope out M&A acquisitions, just like that of online casino operator Lucky7 in which it took a further 60% stake to diversify its operations. The deal has given Superbet the chance to branch out into other markets outside of its core CEE remit and Magaletti is really pleased with how Lucky7 has performed. But he is not ruling out further M&A opportunities in the region or outside to continue its expansion trajectory. As well as the acceleration of Superbet’s global digital expansion through Lucky7, there are plenty of synergies the two can leverage. While Superbet can offer its large legal and compliance departments to help Lucky7 enter regulated markets, in turn Lucky7 can share its expertise on the marketing, acquisition and retention side. The M&A activity has also been coupled with technology investments as 2020 is the year that Superbet restructured its product and tech worlds as well as backing a boost in talent. “We attracted a lot of external talent to join the company and effectively started to focus on the parts of the technology that can give us competitive advantage. Because the reality is we will continue to outsource things that are not our core competencies but we want to continue to invest in our own technology being developed across all of our offices in Croatia, Romania and the UK,” explains Magaletti. One of the ways it is investing in people and technology is through its team in London, which focuses on the automation of pricing through the use of AI. This allows the firm to provide new markets to its customers as well as working to “build a foundation for the Superbet of tomorrow”.

Talent scout

Over the last few years, Superbet has continued to hire the best of the best from around the industry to build its own dream team of igaming expertise. After the arrival of former Paddy Power Betfair executive Johnny Hartnett as CEO in August 2019, a spate of high-profile appointments followed. This included former Casumo marketer John Harmander joining as CMO in January this year, and Google’s Nikola Jellačić starting as global director of brand strategy and growth in October. Magaletti describes it as a “process of internationalisation”, where Superbet has injected the new talent “inorganically by going out into the market and cherry-picking people” for the positions that needed to be filled. As part of realigning its product and tech worlds, the operator has also hired several product managers. “We’re very pleased with the progress and we’re going to continue to build our culture which is going to be fundamentally based on the DNA of Superbet and moving towards Superbet 2.0. So, we are on this journey together with Johnny [Hartnett], the board and the rest of the management team,” he says. In terms of next steps outside of CEE, Superbet wants to focus on the Balkans where it believes it has a competitive advantage. As for M&A, the operator is looking at complementary M&A in the regions where Superbet doesn’t currently operate in, as well as branching out across Europe in general.

We attracted a lot of external talent to join the company and effectively started to focus on the parts of the technology that can give us competitive advantage. […] We want to continue to invest in our own technology being developed across all of our offices

International footprint

For its global digital ambition, Superbet will lead with its Lucky7 team to spearhead the expansion of its gaming proposition, followed by the parent brand. “But we obviously still need to work on our technology in order to achieve the scalability that we need to address numerous markets. I expect to be ready at some point next year with that,” says Magaletti. He continues: “Obviously, the world is big and there are opportunities in South America, Asia, Africa and the United States. But that’s something that we can revisit in a few months, it’s not something that we’re going to focus on in the short term. There are plenty of opportunities to go after.” When considering new markets, Magaletti explains that the strategy is three-fold: assessing the market size, regulatory environment, and competitive state of the market. Taking these factors into account, he admits that the US is an attractive target: “When you look at the United States, the market size is big and the projected growth is very, very high. So, it certainly is attractive from that point of view. I don’t exclude it as the ambition is global so, eventually, we will be in the United States, but it’s too early for me to commit to a specific time.” The UK, on the other hand, is a less attractive prospect for Superbet due to it being mature, heavily competitive and having marketing restrictions. “The opportunity is there but it’s not the first market I will go into obviously. Italy is probably similar. But we’ll continue to be on the lookout for opportunities,” he shares with EGR Intel. Looking ahead, under the new-look marketing team, headed up by Harmander, the Power 50 operator is working on a new brand identity which is expected to be unveiled in 2021. And now that the business is well capitalised, with its financial support from Blackstone, Superbet is continuing to build a platform that will allow it to scale. “We are very much on the lookout for companies that we can acquire and effectively help us to accelerate the expansion of our business, so not necessarily to build more market share in Romania but rather to accelerate the expansion in other markets. And that is true, certainly for the multi-channel proposition. But that doesn’t mean that we are going to exclude online-only kinds of players that are complementary,” Magaletti tells EGR Intel. With such lofty ambitions for growth, expansion and diversification, Superbet is ready and charged to compete outside of its core markets. As the famous Shakespeare saying goes, the world is your oyster.