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GAMINGmalta 2019 EDITION
Mark Blandford, Partner at Burlywood Capital
All Eyes on New York
The Investor
Mark Blandford was one of the first offline bookmakers to recognise the potential for sportsbetting on the internet. He has seen the rise of London as the industry’s power base and witnessed the success of Malta in attracting iGaming companies, but he believes that the sector’s next epicentre will be New York. Can you tell us how you got involved in the gaming industry?
I am a farmer’s son, but both my parents were interested in horseracing and they knew some of the leading trainers and jockeys of the day. I naturally inherited their interest and loved studying the odds. When I finished school, I studied business with a focus on marketing. Then I had a couple of jobs in B2B marketing but I found these jobs very frustrating as I realised that it will take me a long time to progress. I was always very entrepreneurial in nature, and at the age of 27 when my wife began talking about starting a family, I realised that if I want to start my own business it was now or never. The industries I had worked in were difficult to start up in, and the only other industry I knew something about was bookmaking. At the time, I had a friend who owned a betting shop and was kind enough to train me how to be a bookmaker. I then bought my first betting shop, and in the years that followed I built a small chain of betting shops. In the 1990s, one of my neighbours introduced me to the internet. I looked up sportsbetting and bookmakers – not much came up, and I suddenly realised that the internet could provide an additional distribution channel for betting products.
Where did you go from there?
I was quite taken by the internet’s potential. It was the absolute beginning of this industry, and only a few bookmakers had an online presence. I sold the betting shop chain at the end of 1997. I went all in on online gambling and founded Sportingbet. In 1998 I got a licence from the Isle of Alderney, which gave us a competitive advantage. While UK-based companies were required by law to add a 9% tax to all bets, Alderney was betting-tax free. The first years were quite exciting but also challenging as there wasn’t any suitable sports betting software available compared to today. At the time, mentioning online gambling and credit card processing together was also a very easy way to get thrown out of a bank, but we battled through.
How would you describe the current sportsbetting landscape – online and offline?
When I sold my betting shops to set up Sportingbet, I was convinced that the future of sportsbetting was online because it allowed for greater operational efficiency. But I still thought that there was a market for betting shops. However, today I believe the outlook for offline is pretty poor, and betting shop owners have to accept that they are running a mature business. We are seeing significant changes in customer behaviour – today’s customers prefer to bet online. In addition, high street is under pressure with footfall, and you’ve got a regulatory regime that amplifies costs. We have gone from too light-handed regulation to heavy-handed regulation. I am absolutely in favour of protecting vulnerable players, but I think we have gone too far and this is not healthy for business. By the way, the same applies to the online world, and I do believe that the high regulatory costs could actually drive businesses offshore again.
The iGaming industry appears to be facing an increasingly restrictive and hostile regulatory environment in many countries. What are the reasons for this?
For a long time, the industry has not invested sufficiently in PR and lobbying. That’s why we now have a large number of politicians who would rather look the other way instead of standing up in favour of the gambling industry. It is ironic that this is occurring at a time when the industry is larger than ever.
Let’s talk about your third life in gambling. As a venture capital investor with Burlywood Capital, where do you see the industry right now?
As the online industry has matured, funding streams have grown in tandem. The industry is huge today. It is entrepreneurial in nature, which attracts angel and seed investors in greater