SBC News Voice of the Sports Betting Industry
Take a quick glance at your screen time—what’s the verdict? Are you clocking in 8 hours? Or have you joined the 9-hour club?
Our lives are firmly intertwined with our mobile screens, a modern reality that’s hard to ignore. But let’s rewind to 2011.
Yes, mobile phones were already asserting their presence in our daily routines, yet did we truly inhabit a ‘mobile-first’ universe back then? When it came to the gambling industry, that shift had yet to find its momentum.
That’s when this year’s SBC Summit Barcelona Hall of Fame inductee and LeoVegas CEO Gustaf Hagman first envisioned a mobile-first casino— a genius idea hatched at a chill BBQ with an ex-business buddy.
The idea was born with a playful spin of the brand-new iPhone 3s, flaunting its rounded edges and (back then) modern charm. This idea would reshape the landscape of mobile gaming.
Prehistory
Hagman’s introduction to the gaming industry happened back in 1999, but his journey was far from conventional.
An economics graduate, Hagman co-founded VSMarkets.com, in what was a pioneering approach to stock trading, offering a unique platform for individuals to bet on the fluctuating fortunes of NASDAQ-listed shares of gaming companies.
Hagman’s betting engine allowed users to wager on the short-term performance of stocks accepting high-frequency transactions that proved to be a saviour when the business was hit by the challenges in the global financial market after the 9-11 events in 2001.
“I remember in August we were touching 500k dollars in turnover. And then in October, it was down to 50. But we had our engine and we managed to start selling that.”
Next stop—Eurobet. Hagman obtained a licence to operate in the Nordics for Eurobet, an Italian-owned company that was merging with Coral. However, when a UK bingo operator acquired Coral, they wanted control in all markets. So, they bought the licence from Hagman, ending his involvement with the brand.
Soon the entrepreneur founded a company called Net Gaming and even listed it on a smaller stock exchange in Stockholm (today Spotlight Stock Market). He explains: “We were doing consolidation, so I bought smaller poker sites. I think during a two-year period, we acquired 27 sites roughly in the Nordics.”
The Life-changing Barbeque
Fast forward to 2011. Hagman invited Robin Ramm-Ericson, VSmarkets.com co-founder over for a barbeque at his house.
“I recall having one of those new iPhone 3s, slightly rounded on the back, allowing it to spin on a table. I would often play with it, spinning it around, and at a certain moment, it struck me that it resembled a roulette game. I understand it might sound a bit cheesy, but that’s precisely how LeoVegas was born.”
“Yes,” he repeats.
“LeoVegas was born out of a spinning iPhone.”
Hagman realised something that others in the industry failed to grasp – the power of mobile held potential for gambling brands. Instead of designing a brand primarily for desktop users and retrofitting it for mobile, Hagman and his partner daringly envisioned a brand with a mobile-first approach from the outset.
That day, Hagman and Ramm-Ericson shook hands and made the decision to quit their jobs.
When it came to the brand name, they landed on ‘Leo,’ channelling the fierce spirit of a Latin lion, and mixed it up with ‘Vegas,’ a nod to the dream-filled city.
Interestingly, they consciously excluded the term ‘casino’ from the name, opting to emphasise the association with entertainment instead (which is very much in line with the current wave of rebrands attempting to add that entertainment flair).
From that May night till mid-June, after just two weeks of grinding on a business plan, the dynamic duo had already snagged their initial funding for LeoVegas.
The concept was refreshingly simple: enlisting the finest developers available to construct a future-ready platform rooted in a “mobile-first DNA.”
A Launch with a BANG!
On January 12, 2012, precisely at noon, LeoVegas went live. The website kicked off with a modest lineup of around six or seven games. “There were not that many suppliers that could make mobile games at the time,” Hagman recalls.
“It was not a soft launch. We went with a big bang.”
The founders struck deals with major publishers across the Nordics, as well as online newspapers, radio, and TV stations, witnessing firsthand the influx of numbers.
“All of a sudden, we realised that we needed to expand our team and establish new offices. It was incredible.”
Hagman attributes their success to the synergy between the marketing and product teams. Rather than having product experts dictate what the marketing team should promote, or the marketing team instructing product development based on market demands, Hagman and his partner managed to bring these two forces together to outline a shared agenda for creating exceptional products and marketing.
“Innovation is only possible when the product teams inform the marketing side about groundbreaking possibilities—things that are unheard-of and that customers might not yet be aware they need.”
“It was a combination of things and being willing to take risks,” he adds. “The shy guy never gets to kiss the girl.”
Speaking from my own observation, I’d venture to say that Hagman’s hands-on approach and dedication were like rocket fuel for success. The CEO’s eyes practically sparkle when he talks about his trusty old Excel sheet from the early days. “I would sort it every day and measure the conversions—conversion 1, conversion 2, conversion 3. My Excel sheet would just keep growing.”
In 2013, Hagman and his family set sail for Malta with the intention of planting the LeoVegas office flag. They arrived with only 10 people, but when they left two years later, that number had grown to 150. Today, the Group employs 1500 people.
The New Era
In the subsequent years, LeoVegas experienced growth, and expansion, and acquired new licences. In 2018, the company was listed on NASDAQ Stockholm.
The pivotal shift occurred when LeoVegas initiated the application process in New Jersey.
“Several people came knocking on the door. Larger US-based land-based guys that were somewhat lagging behind in the realm of online gaming, specifically.”
MGM was among the companies that saw LeoVegas as the missing piece of the puzzle for their international expansion plans.
“I remember my first meeting with Bill (William Hornbuckle), the CEO of MGM and told him that this would be two lions coming together.”
The acquisition concluded in September 2022.
On August 17, 2023, MGM Resorts International unveiled the launch of its BetMGM igaming and online sports betting brand in the United Kingdom—an international expansion of the BetMGM brand made possible through a strategic partnership with LeoVegas, leveraging their proprietary technology and platform.
Hagman elaborates on the decision to partner with MGM, even though there were a few contenders. “They shared our vision of establishing LeoVegas as the most prominent online casino brand. This was very important for us.”
Acquisition Targets
Expanding on acquisitions, he mentions that with MGM, they are looking at both operators and suppliers. This is why Push Gaming was their first acquisition.
The criteria?
Number 1—a company that aligns with their vision to ‘conquer the world together.’
“This is why I value founder-to-founder discussions.” For Hagman, it’s all about culture, getting to know the founders, and understanding if they are committed to staying on.
“You can perform numerous calculations – we have experts at Goldman Sachs and Morgan Stanley, to do that for us. But ultimately, it comes down to people. They might choose to take a large sum of money and purchase a house in the Caribbean. That’s not our goal. We want people who are motivated to stay with us until we understand the business ourselves.”
Number 2—finding local champions.
“This approach allows us to assert our presence in that country, attain a significant market share, and establish a strong position.”
On Regulation
Hagman is pro-regulation and believes that the gaming industry needs to be regulated in some way because we’re dealing with people. However, he emphasises that regulators must understand that when they regulate a market, their focus should be on nurturing it rather than inadvertently giving rise to a black market.
“Until today, I haven’t seen any regulator that has successfully managed to achieve that balance.”
Hagman is curious to see how the situation in Germany will unfold but notes that in Sweden roughly 70% of the industry is regulated, while the remaining 30% is still grey and allows playing at crypto casinos with no limits and uncapped bonuses.
“You shouldn’t have a big net with a bunch of holes in it. The industry needs help from regulators to establish a healthy and robust environment.”
A positive step was taken in Sweden, according to Hagman, with the introduction of B2B licences. “As a result, you cannot supply operators who lack a licence. However, the question of ‘how do you supervise that?’ remains unanswered.”
When asked about regulating affiliates, Hagman says that he believes that eventual regulation is likely. “Essentially, they are suppliers, just like payment processors or gaming suppliers. It will take time, but it will happen.”
The CEO adds that the consolidation trend, where a few larger companies acquire smaller ones, might yield positive results. “If larger corporations choose to reject suppliers supporting the grey market, the environment will be more favourable for the players.”
“Without trust, you can’t run fast”
The Hall of Fame inductee describes his leadership style as coaching-oriented as opposed to hierarchical. The idea is to “lift up all the staff internally and coach them.”
“Especially in the beginning, I felt like I was a dad to a hundred people—you have to handle everything from discussing their personal lives and how that impacts their job, guiding them in what they’re doing right and wrong.”
Hagman believes that if you have to wait for all decisions to come from the top, you will never reach your full potential.
“Without trust, you can’t run fast.”
For someone who was so hands-on, a question arises: Was it difficult to let go of certain responsibilities? Hagman doesn’t hesitate with the answer.
“The secret here is to realise early on that you have to hire people who are smarter than yourself.”
He believes that this approach is what ultimately drives innovation.
“When people genuinely love their work, they are more likely to innovate. If they are simply there to perform tasks, there’s no innovation.”
“Because there’s no heart in this.”
