F E AT U R E
PADDY POWER BETFAIR
CV Peter Jackson Jan 2018 Paddy Power Betfair: CEO Mar 2017 – Jan 2018 Worldpay: UK CEO Apr 2013 – Jan 2018 Paddy Power/Paddy Power Betfair: non-executive director Feb 2016 – Feb 2017 Banco Santander: head of innovation Mar 2010 – Mar 2015 Travelex: CEO Jan 2009 – Mar 2010 Lloyds Banking Group: MD of consumer products Oct 2006 – Dec 2008 HBOS: head of products Jan 2003 – May 2004 HBOS: head of personal loans products Mar 2002 – Dec 2002 HBOS: head of business development 1999 – 2002 McKinsey & Company: consultant
Sportsbet brand was the company’s outstanding success story during 2017. Revenue was up 21 per cent to £404m and gross profit rose 18 per cent to £292m. The US business is also performing well, with revenue rising above £100m for the first time. Sports revenue was up 13 per cent, while Betfair Casino in New Jersey now has a 12 per cent market share after growing 29 per cent during the year. Jackson continued to make positive noises about good positioning in the US market if the Supreme Court does repeal the sports betting prohibition across most of the country, while acknowledging that the process might still be slow. While the Supreme Court remains a big ‘if’, most stakeholders are gearing up to make it happen quickly if the judges deliver positive results. And Betfair is well positioned in the US. It has licences in over 30 states, from California to New Jersey, and its brand should play well in a country obsessed by integrity. While many land-based casinos will want to use their own brand, Betfair has an inherent brand advantage (it’s about betting fairly, geddit?) over a UK-based name such as William Hill or even Paddy Power, which would mean little to the average American. GIQ Q1 REVIEW
But, once again, Jackson urged caution. This can only be sensible. While most stakeholders are getting excited about a post-PASPA environment, we have been waiting a very long time for US regulation. Paddy Power stationed Eamonn Toland in the US in 2011 and only New Jersey had opened for business by the time he left in 2016. But if the US has potential, Australia is the model that the Paddy Power brand needs to follow to get back on track. Sportsbet has continually rolled out new products, while Paddy Power in the UK has suffered two years of stagnation as developers focussed on moving to Betfair’s platform. Jackson spent a long time during his presentation on highlighting and analysing Paddy Power’s weaknesses. He highlighted a low share of wallet and issues with ease of use that have meant Paddy Power has fallen further behind with the recreational bettors that form its core business. He noted that Sportsbet, Betfair and Paddy Power are all challenger brands. “It is really important for challenger brands to have something that you can deliver to your customers,” said Jackson. Gersh also made the point that “we are coming from behind”, and
that Paddy Power needs to roll out products to match the likes of William Hill’s Bet Boost and Bet365’s Bet Builder. To do so, Jackson said, the operator would have 1,000 developers, from Portugal to Romania, focused on getting products ready for the World Cup. All this talk of falling behind seems to be pointing the finger at the previous management’s failings, but it might also be an attempt to reinforce Paddy Power’s position as a challenger brand. It is not an easy position to maintain when the company is now a £6bn market cap giant, but it plays to Paddy Power’s strengths. Paddy Power rose to prominence as the lad’s brand in a culture where laddism was seen as trendy. However, trends change and there’s some doubt whether a lad’s brand can thrive in the current climate. That said, Betfair is being promoted as the international antidote to Paddy Power’s Anglo-centric (or maybe Celtic-centric) brand. It is also a non-lad’s brand, specifically aimed at the serious sports bettor. The combination of the two should have most bases covered, although neither has much of a gaming brand, of course. Jackson refused to rule out the launch or acquisition of a more gaming-focused brand. 888, perhaps? n 87