SBTech is generating significant interest in the government-to-business sector with a series of lottery successes. iGB
SBTech has inked three sports wagering deals with members of the Global Lottery Association between June and September, establishing the company as a significant new player in the state-run gambling market. Chief Development Officer Andrew Cochrane examines the difficulties of adapting traditional products for the 2020s.
Home > Lottery > SBTech is generating significant interest in the government-to-business sector with a series of lottery successes
SBTech is generating significant interest in the government-to-business sector with a series of lottery successes
From June to September, SBTech signed three sports wagering agreements with members of the Global Lottery Association, establishing the company as a significant new player in the state-run gambling market. Chief Development Officer Andrew Cochrane examines the difficulties of adapting traditional products for the 2020s.
One might be a coincidence, two might be a coincidence, but SBTech has become accustomed to striking sports wagering supply deals with state lottery operators after signing three agreements with Global Lottery Association (GLA) members since June.
First was the Oregon Lottery in June, where SBTech won a competitive bid to power the operator’s retail and mobile sports betting, arguably the largest vertical contract in the US lottery industry to date.
Then came Finland’s gambling monopoly Veikkaus, a month later. This time, SBTech was tasked with completely overhauling the existing pre-match and live sports betting products, as well as building a new user interface.
As demands for an end to Vikas’ exclusive control become more intense, the provider is undergoing a digital transformation to combat competition from international providers. Enter SBTech.
SBTech recently collaborated with Svenska Spel, the Swedish national lottery company, to assist the lottery provider in adapting to Sweden’s newly regulated market, which has taken many newly licensed private operators by surprise. This action occurred earlier this month.
SBTech’s Chief Development Officer, Andrew Cochrane, stated that the supplier’s achievement is a declaration to the industry.
“The word is progress,” Cochrane remarked. “Ambitious, expanding, forward-thinking organizations prefer to partner with similar entities, and now in the industry, SBTech is recognized for its excellent innovation, forward-thinking, product-focused business, which has been successful and chosen by top-tier operators.
“Companies can recognize that we have momentum.”
Strong brand, weak offering?
For Cochrane, ensuring more lottery activity starts with a straightforward observation: the operators involved can perform better.
In 2018, live betting accounted for only 16.4% of Vikas’ sports betting income and 2.4% of the monopoly’s total income. SBTech believes this figure can be enhanced. However, Cochrane stated that Vikas and other partners are hindered by inadequate real-time products and conventional technology.
“We perceive it as an opportunity because the industry is offering very low-quality products to end users,” Cochrane explained.
A majority of lottery providers utilize antiquated, single-technology solutions, their offerings lack adaptability, and their sports broadcasting is not robust.
“These providers all possess intricate, custom-built systems that are sluggish, inflexible, and not constructed with modern technology,” he stated.
Although this may impede them, he mentioned that they possess strong brand benefits. For instance, Veikkaus is the sole legal gaming brand for Finnish players. Sweden’s Svenska Spel held a monopoly until January of this year. However, both organizations, along with the Oregon Lottery, are primarily land-based operations.
“These are very powerful brands,” Cochran stated. “[We] observe tremendous potential to bring these extensive retail presences online through a robust omnichannel journey, engaging players online and driving online revenue.
“For us, it’s about the omnichannel product, which we believe is particularly well-suited to this sector, and we’re enthusiastic that in the past few months, three lottery operators have indicated their agreement.”
Nevertheless, while these actions are all aligning within a brief timeframe, they have been in progress for an extended period.
Cochran alluded to his experience cultivating relationships with Veikkaus and Svenska Spel during his tenure at a sports solutions firm. This work persisted after he joined SBTech in 2017, and the procurement process for each Scandinavian enterprise extended beyond a year.
Nevertheless, perhaps the most significant were the arrangements SBTech made with the Sazka Group in 2016 and Danske Spil in 2017.
“For us, SBTech has achieved a number of significant achievements over the past three years,” Cochran stated. “The first was Sazka signing an agreement with SBTech to launch online sports gambling in the Czech Republic.”
“Then, that gave Danske Spil the confidence to say, ‘These individuals have WLA member clients, we are confident in selecting them.’ I believe Danske Spil was a truly important customer for SBTech, and helped us secure deals with Veikkaus and Svenka, if not all three.”
Concentrate on Adaptability
Cochran continued, stating the key to securing these agreements was being able to provide adaptable solutions. They desired new technology, yes, but they also desired to retain their in-house trading teams and handle risk management internally.
“I believe they were seeking adaptability,” he said. “If you examine these lottery operators, they typically have their own in-house trading teams. They do not want to disband those teams, lay off employees, and hand over the keys to risk management immediately.
“Therefore, SBTech offered a combined solution: If they desired to retain their staff, if they desired to retain their trading teams, if they desired granular control over risk management, we have empowered them to do that, which was absolutely essential.”
Although there might be resemblances among the lottery operators, all three are in significantly different circumstances. The Swedish gaming enterprise was once a sole provider but has recently embraced competition. The Finnish gaming enterprise remains a sole provider but may encounter similar difficulties to its Swedish counterparts in the future. The Oregon Lottery is a newcomer to the sports wagering market, which only permitted regulated betting a year ago. However, Cochran asserts that he believes the company can aid its associates in achieving success in each instance.
Cochran stated, “We are confident in our ability to assist numerous operators in safeguarding their market share.” “When you examine the figures in Europe, many lottery operators are witnessing their market share come under pressure, or in some cases decline. Therefore, I believe SBTech’s offerings are well-suited to assist operators in regaining momentum and preserving their market share.”
“We collaborate with our partners; it’s not a customer-supplier relationship. Consequently, we consistently analyze the markets where our partners operate and ensure that we possess products that are competitive within that specific market. We embrace open market competition because we have robust products that can contend with any online sports wagering company.”
For SBTech, the current emphasis is on the introduction of each product. Cochran indicated that the Oregon Lottery product was initially scheduled to be launched at the commencement of the NFL season on September 5th, and now the launch is on the verge of occurring.
In the meantime, Veikkaus and Svenska Spel are preparing to introduce fresh sports wagering offerings in the first six months of 2020.
“We’re thrilled to have this kind of standing in the business, and now we must fulfill these contracts and bring them to fruition,” Cochran stated. “The proof is in the pudding when we go live; we must deliver on what we pledged in the agreements.
“Therefore, we’re eagerly anticipating Veikkaus’s launch early next year, Svenska’s launch in the second quarter of next year, and Oregon’s launch before both of those – Oregon should be going live very shortly.”
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