Hervé Schlosser: Sportnco – French experience will power growth in Spain with LATAM to follow

It is widely acknowledged that France is a tough market to operate in, but as Sportnco CEO and founder Hervé Schlosser explains, it is possible to be successful there with the right approach. He explains how his company has become the leading sports betting solutions provider in the country and how this experience is helping his group grow in Spain, with Latin America firmly on the radar.  

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France’s igaming market is a key driver of Sportnco’s activity and the expertise we have acquired there since the market regulated in 2010 is driving many of our activities in other European markets such as Spain, with our eyes firmly set on Latin America.     

The reference to France is not accidental. Sportnco is a French company and its head office is in the south-west of the country in Toulouse. But it is also no secret that the regulated French market is difficult and harder to operate in than other comparable European territories.

And even though the tax framework is likely to change within the next 12 months, there are a number of key areas that make being an igaming operator or supplier in France particularly difficult.

  • The technical constraints and requirements placed on suppliers and operators are demanding, notably the recording of all transactions between players and operators that must be transmitted to ARJEL. We have addressed these by developing our own proprietary solution and offer it as part of our global package. This enables us to control a complex and sensitive piece of technology that is essential to operating in the market.

  • The list of authorised events and types of bets we can offer for specific sports means, for example, that French operators are not able to offer bets on friendly football matches for teams that are not in the Fifa Top50 standings or where there is no competitive result to play for. We handle this through our trading teams and our back office tools manage our offers according to the regulations they are subjected to in different markets.

  • France’s tax on turnover is one of the toughest components to deal with for the sector. We have dealt with this key issue by setting up a system that guarantees operators can optimise their GGR to generate margins of between 16% and 19% according to their financial targets. In practice, this means offering only accumulator bets when the odds are below a certain level or ‘ACCA insurance’ promotions.

  • French operators’ payout ratio is limited to 85% (as opposed to around 95% or more in most markets). This means modelling our odds and focusing our trading teams to ensure we generate a minimum of GGR margins of 16% on the market.  

Working and being able to generate profits within such parameters is highly demanding for all stakeholders and requires hard graft. The fact that we have achieved this is a testament to the work we have put in as a group and in partnership with our clients, which in France include NetBet, ZEbet and Genybet.

In practical terms, it means paying the closest attention to all the details that affect both ours and our operators’ revenues, ensuring the strategies we agree with them are achievable and integrating clients efficiently and to the highest standard.             

Expanding further

The result is that since launching as a start-up B2B supplier in 2010, Sportnco is now the leading sports betting platform provider in the country, with close to 15% market share.

This experience and success, which presented serious challenges that bigger and better-known suppliers were not able to overcome, has brought great discipline, a realistic vision of the market and, just as important, the confidence in our ability to apply this knowledge further afield.         

We have already seen the benefits of this approach in Spain, where we have launched brands such as Suertia, Gran Casino Madrid, Casino Barcelona and very soon Golden Park; and most recently we announced the signing of Italian giants Sisal, for whom we will be launching a fully-customised dot es site in the summer.    

These contract wins have also been facilitated by having part of our marketing, IT and trading teams based in Barcelona, where proximity and language have enabled us to build strong relationships with Spanish groups.

Armed with this skillset we are already growing strongly in Spain and in a much shorter timeframe than we did in France, in a market that is dynamic and growing strongly.

Spain’s growth levels are not at the same levels as this in France, but it is more varied as operators can work offline and we will be launching our own self-service betting terminals (SSBT) solution for Casino Barcelona later this year.    

By comparison, the technical constraints, restrictions on offers or payout ratios also pose no specific problems to speak of in Spain; while the taxation at 20% of GGR, or 10% if a company is based in the Spanish-controlled territory of Ceuta or Melilla in northern Morocco, is hugely attractive when compared to France.

New markets & new products

With new SSBTs being made available for our customers this autumn we will offer the full omni-channel product range that combines online and land-based betting and that we know Spanish and Latin American punters enjoy. We anticipate the first releases to take place in September in Spain.

And speaking of Latin America, we are in advanced discussions with a number of potential partners looking to launch betting sites in the region.

Our presence at ICE 2019 has enabled us to follow up on and initiate discussions with operators acting or interested in Brazil, Argentina, Colombia and Peru.

Our experience shows that true customisation, the ability to deliver strong GGR margins in a tough market and existing customer satisfaction have enabled us to grow in France and are powering our strong growth outside our home market.

Our hard work paying off in France and Spain and we believe we will replicate this success in Latin America. 

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Hervé Schlosser – CEO & Founder – Sportnco

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