As Danske Spil goes live with Youbet.dk, its latest brand powered by SBTech’s full platform solution, chief executive Niels Erik Folmann explains why healthy competition is a positive in regulated markets, how Danske Spil chose SBTech at its platform for this new project and what the key issues will be in Scandinavia in the coming months.
Denmark state lottery and betting operator Danske Spil has at times been described as ‘the poster child’ of regulated igaming markets. This is because since regulation in 2012 it has transitioned very successfully to a regulated environment, competing against strong and well-established private operators as they vie for Danes’ leisure spend across the key betting, casino and poker verticals.
And whereas some state operators have not adapted well to their own regulated environments, Danske Spil continues to grow, benefitting from the market’s dynamism and intense competition.
To place the company’s scale in context, Danske Spil recorded gross gaming revenues of almost €660m (DKK4.9bn) in 2017, while Denmark state regulator Spillemyndigheden’s latest figures show that industry-wide GGRs across sports, online and land-based casinos and gambling machines were €792m (DKK5.9bn) in 2017, a year-on-year increase of 6.9%, with betting contributing the highest GGR of all the verticals at €308m (DKK2.3bn).
These figures illustrate the scale of the group’s achievements since 2012 and as SBTech announces the launch of Danske Spil’s latest brand Youbet, CEO Niels Erik Folmann kindly agreed to answer our questions about the Danish market, how it will evolve, and why Danske chose SBTech as its sports and casino platform provider.
SBTech: Danske Spil has performed very strongly in the Danish online gaming and betting market since it was regulated in 2012: what is the rationale behind the launch of a completely new brand like Youbet and what are your targets for the brand?
Niels Erik Folmann: Danske Spil has executed a very strong strategy in terms of maintaining our market share since regulation in 2012, exceeding all market expectations. We are now taking the next step towards faster growth by adding a new brand to our portfolio, targeting players who demand a deep sports and casino offering.
SBTech: As a group, you must have had a number of proposals from suppliers for the Youbet project: what were the driving factors behind your choice of SBTech as sports and casino platform provider?
NEF: SBTech showed a profound understanding of our needs during the RFP process. The sportsbook and casino platform looks good, as does the roadmap for new features, meeting our need for a partner that will drive the success of our new brand through cooperation and co-creation.
SBTech: Scandinavia is often mentioned as a forward-looking region when it comes to igaming regulation and outlook: do you agree and how successful do you think Denmark has been in its management of the sector since 2012?
NEF: This is certainly true and I believe that other countries have been inspired by the “Danish model” when regulating their markets. Regulation here has been managed well and we have succeeded in cutting black and grey operators to a minimum.
The Danish Gambling Authority has now issued 18 sports betting licences and 41 casino licences targeting 4.4 million adult Danes. We have experienced fierce competition right from the start and have welcomed it, since it’s in the best interests of players and the industry as a whole.
The Danish taxation model is based on gross profits, casino is highly regulated and poker has international player liquidity, helping operators, both private and state-owned, generate margins and compete on a level playing field. This clearly shows that the right regulations can help stimulate growth in a regulated market.
SBTech: In your eyes, what will be the defining factors driving the online betting and gaming sector in Denmark in the next 12 months?
NEF: There is no doubt that responsible gambling and control of aggressive bonus schemes are hot topics on the legislative agenda. With so many players in the field, bonus and marketing spends are very substantial, and that inevitably attracts political attention.
On our side, we’re enhancing marketing efficiency through our data management platform, personalised UX and more intelligent loyalty programmes. With an even stronger portfolio and an open-minded approach to both regulation and innovation, we now cater to all market demands and look forward to gaining increased market share.