Paul Leyland, Founding Partner at industry advisors Regulus Partners, will open the ‘Betting on Sports’ Conference (15-16 September, Grange Tower Bridge Hotel London) detailing the potential impacts of BREXIT on betting stakeholders and the sector’s value chain.
With the betting industry likely to face internal and external conflicts, Leyland details the demands governance, and leadership will likely face in testing and uncertain times…
SBC: Paul great to catch, as founding partner of industry consultancy Regulus Partners what were your initial thoughts following the UK’s BREXIT result?
Paul Leyland: The key issue facing all stakeholders in the short-term is uncertainty at present lots of people, are making lots of predictions, but the nature of this unprecedented circumstance is that nearly all of them will be wrong.
From a day-to-day operational perspective nothing, much is likely to change soon, but access to capital is likely to be affected and operators licensed in Crown Dependencies should be thinking about regulatory contingency planning now.
SBC: All UK sectors are entering a period of fiscal and legal uncertainty, from an industry perspective what should betting and gambling operators are prepared for at this early stage of developments?
PL: I think the biggest danger is falling into a paralysis by analysis: there are a lot of interesting things going on, and it is tempting for corporate leadership to want to understand and plan around them all.
However, few are likely to have a material business impact, or an impact that can be mitigated effectively at an operational level. The key in this period is to identify business points of failure that could be affected and plan mitigation, put simply look to control the controllable and don’t worry about the noise.
SBC: How will BREXIT impact the international ambitions of UK operators, who have actively targeted growth in new markets?
I don’t think it needs to affect them much. Regulated markets are always covered by various shades of bureaucratic policy and not being in the EEA will merely add to that. Marginally we should expect higher costs, making it’s a busier period for industry compliance nevertheless that is a key sector trend anyhow.
SBC: We have seen new online betting firms enter the UK betting market in 2016, in-terms of their continued growth what core competencies do these operators have to develop in order to survive in a changing UK landscape?
PL: I think this is a question for all operators, not just the entrants: for example, William Hill was once the market leader, it not longer is due to M&A and also a pretty spectacular operational stall.
There is obviously a lot of focus on in-play, user experience, mobile first, product cross-sell and retention, but I think the key issue is broader than that. In its current format, online gambling is more complex than ever: very high-quality operations management, a culture of empowering bright people and effective supply-chain management is now far more important than old-fashioned ‘operating’.
SBC: At an investment level, what new and future corporate values and competencies do you feel will be valued by investors?
PL: This is a broad question to answer! Owning technology goes in and out of fashion, regulated revenue vs. .com similarly. However there is one constant, though; the market will always back a management team it trusts and allows a few mistakes on the way, but severely punish a stock where that trust is lost. A big issue for the sector is that many industry ‘veterans’ have seen the scale and nature of business change unrecognisably around them, but they still want to lead in the same old way – First World War generals as farce rather than tragedy.
SBC: Nearly all city analysts predict a UK recession, as an industry is gambling still recession proof?
PL: The simple reality is that It has never been, this is a complete myth! Some aspects of the industry are resilient to a supply-side recession (when the ‘cash economy’ does well), but the industry is more plugged into the ‘ordinary’ economy than ever before, while demand-side recessions hit cash hard: look at 2009. Overall, I think the sector is less resilient now than its ever been.
SBC: You will be speaking at BOS on the industry’s outlook and future impacts, what do you want delegates to take away from your session?
PL: That where there is uncertainty there is an opportunity, this is a time for big change for all sector stakeholders and while that is scary for most it will be the making of some.
Paul Leyland – MD – Regulus Partners
Industry governance and leadership agendas will be discussed and debated at the upcoming Betting on Sports Conference (15-16 September – London Grange Tower Bridge Hotel)