In focus: Unibet chief talks European regulation

Unibet is one of the most geographically diverse operators in Europe with sizeable operations in the Nordics, France, BeNeLux and the UK among others. So its CEO Henrik Tjärnström is well placed to discuss the various complexities of the emerging European regulated markets with arguably the most interesting of these being the fate of the much promised Dutch sector.

The Netherlands started off with predictions of a licensing regime by Q3 2015 and now there are talks of Q1 2017, which Tjärnström says is doable. But he adds the timeline is less important than the nature of the regulation. “We’re not so much worried about when it happens, but that it happens in the right way,” he says.

“We are trying to speak to the authorities to show we’re not just pushing what’s good for Unibet and we know what the customers want and what’s good for the whole regulated market. We are working very closely with them right now and have been for the last few years to make sure the system is as good as possible.

“The former incumbents are trying to protect what they have, but we need to look more at what’s good for the future. But we appreciate it’s a bit challenge for government and regulators to put existing systems to the side, but that’s what you need to do.”

And he says the firm is engaged in a similar dialogue in its key Nordic markets, where after many years signs of progress are finally emerging. Tjärnström notes politicians and regulators in Sweden are actively engaging with online operators now and the influence of the re-regulation of the Danish model is beginning to inspire a move forwards. “It’s about pushing the boundaries a bit and making everyone realise the current system is not fit for purpose. And everyone in society agrees with that,” he says.

Positive Swedish Movement

The former government went to power in Sweden with the promise they would re-regulate the market but 10 years later it’s still not happened. The current government is moving towards a re-regulated system with the ambition it will be in place by mid-2018, but it’s a challenging timetable and will require co-operation between the various parties. “We will work with them to make sure it can happen and the signals we’re getting are they are open minded and wanting to do it in the right way,” Tjärnström says.

“Denmark went first on regulation and Sweden will be next, but Norway and Finland will follow quickly afterwards. If you look ten years into the future you just can’t see how those regulatory models will remain unchanged. If you create a regulatory environment where there is no reason for operators to work outside the system then everyone benefits.

“Norway’s coalition is investigating re-regulation of the Norwegian market and they are trying to see what is best for Norway. We’ve been helping out in providing our expertise and challenging the way the current system is working. We try and influence before a draft comes out, which is one thing we learned from France.

“We perhaps naively thought the terms and conditions in the draft would not be implemented because they would never work but they were implemented exactly as drafted. That’s why we work very closely with Belgium, the Netherlands, Sweden, Denmark and Finland to be a partner rather than challenging the legislation.”

The French Market

Another key territory for Unibet is France. Unibet made headlines for all the wrong reasons in 2009 when it opted not to go for a licence in the newly regulated French market despite a high-profile, if somewhat controversial, position in the market at the time. “It may have looked unusual from the outside, but we did 100s of scenarios and none of them pointed to profitable business in the beginning with the marketing war that was sure to take place,” Tjärnström says.

The firm re-entered the market in 2011 with the acquisition of French operator Solfive, which was swiftly rebranded as Unibet and something of a revival got underway. “With our strong brand value we’ve been able to regain market share and we’re now a top three position without spending too much money on marketing,” Tjärnström says. “We’re running it as a break even proposition as there isn’t an opportunity to make a profit now but it’s a fantastic option for the future.”

It’s one of the few markets in Unibet’s broad international portfolio where it adopts this approach. “We’ve always focused on profitable growth and getting a good return on what we spend,” Tjärnström says. “We’ve always focused on forcing ourselves to be more efficient than our competitors. And while we are reinvesting 100% back into marketing in the UK right now, we have a long-term plan to get into black numbers relatively soon.”

And he says market forces will drive France towards better terms and conditions as is now happening in Italy. “It’s a huge lost opportunity that they are not embracing the opportunity as it would generate more tax revenues for the government than it is today. We are convinced they would increase the tax base with a change in terms and conditions and we are optimistic they will look at what Italy has done and it will happen sooner or later.

“We are realistic enough to realise it’s less likely to happen under the current government, but ARJEL understands the situation in the market and they are working to try and improve things. In France the lack of casino is a serious problem. Non-EU operators don’t care what France is doing with criminal enforcement and for the customer it’s just a click away. There is no way the government can completely rule out casino operators and ARJEL is aware of this and they need better terms and conditions to work with.”