Roman reign: how SKS365 navigated the challenge of Covid-19 to build market share in Italy

The Covid-19 pandemic has changed the dynamic of the international gambling sector from the ground up, accelerating shifts from land-based gameplay to online operators and laying bare some of the areas where the industry has historically underinvested. In the infancy of the pandemic, one jurisdiction which bore the brunt of the early response was Italy, where retail betting and sporting events closed for many months. SKS365 has long been competitive in the Italian market despite the failings made by the previous ownership. SKS365’s new owners Ramphastos have been swift in addressing the company’s historic issues, installing a new executive team and inaugurating a significant period of upward expansion in the business, although this was briefly interrupted by the pandemic. However, as SKS365 chief commercial officer Troy Cox explains, the drive towards a better operating model and strengthened Italian market share has only grown during the downtime. EGR Intel: What is the cornerstone of SKS365’s commercial philosophy, and how do you as CCO  translate that in to player and revenue growth? Troy Cox (TC): We’ve gone into a full roadmap transformation plan that we’ve been on for the last 16 months that has completely changed our operations. It’s a combination of four pillars: a retail, online, casino and compliance/payments that sits under my function. We’ve got several key initiatives that we’ve gone through. We’ve focused and improved things like user experience. We’ve looked at customer experience in terms of how the customer journey has been, how we’ve aligned with that and several key responsibilities surrounding that. We were declining, our shop numbers were declining and our strategy was missing a defined shop acquisition programme. To address this, we went on a recruitment drive and recruited a very good guy in Luca Grisci [SKS365 director of retail strategy] who came in and has been working on the transformation plan for the last year and a half. Flash forward and our shop levels are at record numbers now. We’re going through the process of refitting them and realigning them to match the online offering, so that when a customer leaves the shop having played one of our games – virtuals, casino, etc. – , they are in a situation where they can go and play that game online and have a similar experience and vice versa. In things like marketing, again we’ve enhanced our use of affiliates, our SEO strategy and rationalised our marketing spend, It’s been a complete and total transformation, the journey that we’ve been on and in actual fact we’re now hitting the highest ever record numbers of turnover in the history of SKS365 pre-migration. EGR Intel: What has been SKS365’s approach to dealing with the coronavirus pandemic? TC: From our side of the fence we’ve been very productive. We’ve made sure the people that have been working from home across our four locations, Serbia, Austria, Malta and Rome, have the tools and facilities to work from home. The basics like proper internet, proper desks and chairs, making sure their environment is safe, secure and proper. We’ve seen that our productivity has gone through the roof. We’ve been in a situation where we’ve been able to continue with the transformation plan with no additional distractions, something which has been beneficial. With no distractions around, i.e. no football or sports betting for a period of three months and with effectively casino supporting our business, we found higher levels of productivity and we achieved more during the lockdown period.  This put us in the position of effectively being the fastest to restart our operations after the first Covid-19 lockdown period ended. EGR Intel: How important to you was it to have that head start in terms of getting ahead of your competitors? TC: For the best part of the previous 18 months or two years even we’ve been hovering around four or five in terms of retail rankings and hovering around one to four in terms of online rankings. We’re competing with some big players in the marketplace, like Sisal, Snai, Eurobet and GoldBet, operators who have massive financial backing behind them. Apart from the different financial resources, we take it very seriously in that we want to compete with the big boys. We want to be in the top three in Italy at least and now in terms of GGR we’re number one in online and number three in terms of retail. Restarting as fast as possible has given us a competitive advantage and in terms of the Serie A restart, we’ve been able to gain market share on our rivals. EGR Intel: What effect did the pandemic have on your revenue? Where have you seen the biggest drops and increases? TC: In terms of year to date we were only 9% down. We were shut for the best part of three months from a retail point of view and the best part of two and a half months from an online point of view relating to sports betting. During this time, we put a lot of emphasis on our online casino and virtuals product, both desktop and online to generate revenue for our business. What we’ve seen in terms of numbers, however, is that we were 15% behind in turnover and 8% behind in GGR from last year, so while the impact is there it’s been quite minimal in terms of other European organisations. We’ve worked extremely hard to maintain those levels and, in the month of July, August, and September, to come back potentially stronger than we ever have. EGR Intel: It sounds like a very transformative period for the business which has realigned your priorities, how so? TC: We’ve made some tough decisions in the last 16 months to release several key individuals within our organisation, some that have been there for a long time, and some that have been there in senior positions for a brief period of time. We realigned our business and our business needs, and we created a transformation plan. As a business, although we’ve made some tough decisions over that period, reflecting on them and the impact they’ve had, they were the right decisions to make for our business. EGR Intel: Can you tell me a little more about the transformation plan? TC: We started this in July of last year, with phase one from July 2019 right through till July this year. Then we’ve got phase two of the transformation plan, which runs from July to December this year. At the end of December, we will finish the transformation plan, and we’ll move to another plan and another roadmap. It’s kind of, and I used this analogy when explaining it to the team I manage, very much like building a house. You’ve got to get the foundation, the walls and the roof right first and then if the house survives the storm, you can go ahead and fit the interior out. I’ve been in this industry for almost 15 years and for me there are things that a lot of operators seem to get very wrong. There’s only really four things you need to focus on and that’s register, deposit, bet and withdraw. If you can do those four things very well and at the same time as managing the expectations of your customer, then it will put you in a situation where I think you’ll be a leading player in the market. That was the philosophy that I used when I spent five years working for Tipico and since then they’ve become the clear market leader in the German market. EGR Intel: Throughout the pandemic lockdown period, a lot of governments have expressed concerns about increases in online gambling that could potentially lead to problem gambling. What strategies have you used to mitigate those concerns in dealing with your players? TC: We’ve spent a lot of money and invested over €1m into responsible gambling, player protection and fraud management. We’ve partnered with Feature Space and we’ve got one of the best, if not the best, tools within the industry that looks at transactional volume, player behaviour and multiple bets within certain periods. There’s a lot of other algorithms and measures that we’ve implemented as well and anything that fits within the parameters that are abnormal goes into a queue. We have a team of people that regularly review all this information in these queues to make sure that we’re on top of this. We have a helpline set up for our customers as well. Our staff are fully trained on RG and complete online courses on a regular basis. We take this stuff extremely seriously and we also take our compliance with international regulations extremely seriously, given the issues that the old SKS365 property has had in the past. I’ve been in SKS365 three years now. The whole management is new and when we came into this organisation we knew we were up against it in terms of issues of the past, but we’re not afraid to say that we’ve confronted all those head on, addressed them and put this business back into the shape that it should have been in the first place. EGR Intel: In this second spike of Covid-19, are you employing the sort of similar approaches again when it comes to actual treatment of responsible gambling? TC: Absolutely, it’s certainly at the top of our agenda. We have regular board meetings and it’s something that’s been discussed. Our chairman, Andy McIver, who was previously CEO of Sportingbet, raises this often and at every meeting we go through the numbers and Andy makes a point of addressing particular areas including player responsibility and protection. EGR Intel: Obviously sports betting was cancelled through the first wave of the pandemic, but which of your other verticals saw the biggest uptick in players? TC: We had a year-on-year increase in virtuals of 3,000% during the period. We partnered with two virtual providers, centred around desktop and mobile, and we’ve seen significant uplift around that. We’ve continued to partner with online casino providers throughout the period inking nine deals and we’re continuing to do so over the last few months. The main uptick for us during Covid-19 was in virtuals and online casino. We saw a small uptick in poker gameplay but it wasn’t something we pushed. EGR Intel: Inversely, when this dramatic second spike will finish and once things start going back to normal again, how are you planning to keep those players on board? TC: We did a lot of work around this and something that was quite different to the market and what they were doing. To explain, we did a daily newsletter that showed the players of what’s on, what are the key matches and what things they need to look at. This was more about keeping them informed and engaged daily. Rather than being a bonus-led salesy type newsletter, it was more of an information memo-led approach aiming to keep the players engaged daily. We initially only did the newsletter on a Monday, Wednesday and a Friday, however a large percentage of the players came back to us and said, ‘Can we have it every day? We actually like waking up, checking emails and seeing what’s on for the day.’ To be honest it was something that we stumbled across, which has since had a significant impact on our business levels in keeping our players engaged. We’re doing all the normal things that operators do, looking at things like activation, reactivation, campaigns and strategy. We’re running a leader board online for customer engagement purposes and based on the number of bets each day you move up the leader board. Following our quick restart, we consider ourselves to be the restart specialists in how fast we’ve reacted to the Serie A sports betting markets reopening and one of the things we’re already doing is planning three or four weeks ahead to take into account a potential second restart. The restarts have been significant, in the first one we gained 3.4% market share and in the second we gained 2.1%. EGR Intel: Bet365 has dominated sports betting in Italy for a long time, what sort of strategies are you employing to break this dominance? TC: The biggest thing for us, and I guess it’s the same for Sisal, Snai and GoldBet is that we have a massive high-street presence. We’ve got 960 shops now across Italy, but we’ve got 1,004 licences in total, which represents a massive high-street presence, and aids us in gaining market share under the ban in that our shops are essentially massive billboards for the business. We’ve seen during pre-lockdown that bet365 started to lose significant market share because of the ban and then once lockdown came in and everything went online, they managed to pick up market share again. We’re continuing to push the shop channel and the high-street presence and we’re also in the process of releasing the PlanetPay365 platform in which customers will be able to go into a retail shop and top up their account balance or open a new account online and continue to play within our shops. In addition, PlanetPay365 will allow us to expand in the multi-services market and diversify our business by offering to several commercial activities a wide range of services in terms of digital payments: from telephone top-ups to bills payment, monthly and annual subscriptions, online ticketing, payTV, streaming, gift cards and player account management all from a single platform. We’re hoping to roll out about a thousand of those terminals in the next six months as well as a branded Mastercard. PlanetPay365 has been soft launched already, but our actual plan is to announced it properly in between the end of 2020 and the beginning of 2021. With this product, we want to become one of the most important players in the services market, so we are planning to run massive advertising and marketing campaigns to promote the new brand and the different kind of service that we will offer for our customers. In terms of the branded card, we’re aiming to launch in the following months or so. We’ve done all the development and we’re just in the final stages of launching. We’ve been quite innovative and we’ve not slept through this process. Historically, Planetwin365 has been a very strong brand but in Italy I think it had lost its positioning and its core strategy. However, in the last 18 months, we’ve built it back up and, for me, it’s going to come back stronger in Italy. EGR Intel: What sort of impact has the Italian advertising ban had on your business and how have you mitigated that impact? TC: In all honesty, it hasn’t actually impacted our business that much. Comparing today’s figures to those last year, we’re 16% ahead on FTDs and we’ve spent almost €10m less in marketing costs. Our customers like our service and most of the time if players want to use our products they’ll come and find them anyway, regardless of the impact of any advertising. For me, the Italian ad ban has not achieved its aims and seems to be in fact hurting a lot of the football clubs through lost sponsorship revenue and it’s taken a large amount of cash out of the community. EGR Intel: What are SKS365’s plans for the remainder of 2020? TC: Well, most likely to continue the transformation plan strategy. Our core focus is absolute growth around turnover and around shop growth. It also will be around realignment from aligning our online offering to our shop offering and making the experience succinct through the process. For example, if you’re going to one of our shops, you’re in a situation where if you play a slot in our shops, you can go home and play the same slot online. We want to mirror what we offer in shops to what we offer online. It’s all about joining up the retail customer experience with the online user experience. It’s the omni-channel vision, that is our main focus.