Pontus Lindwall on Why iGaming Still Excites Him After Decades

[00:00]  1. Welcome to the Power Seat

Host:  Welcome to the first episode of EGR’s podcast Power Seat, where we talk to the leaders behind the biggest operators in iGaming. In this edition I caught up with Betsson CEO Pontus Lindwall for an illuminating chat on his long and storied career; look out for a great anecdote about betting around his kitchen table. The Power Seat is brought to you in association with Pragmatic Play. Now, on to the episode.

Host:  Our first guest is Pontus Lindwall, CEO of Betsson Group. Welcome, Pontus.

Pontus:  Thank you very much. Good to be here.

[01:14]  2. The defining moment: 1996

Host:  You’ve had a really long career. Looking back, what were the defining moments that shaped where you are today?

Pontus:  One very obvious moment was when I decided to found a company that was going to aim for internet gaming, because I had been working in land-based gaming before, and I saw the potential and decided to go for it. That was a big moment.

Host:  How long ago are we talking, without giving away your age?

Pontus:  That was 1996. So it’s a few years ago.

[01:53]  3. Getting past the politicians

Host:  You were ahead of the game. What was the driving factor behind that decision?

Pontus:  I had been in land-based gaming and saw the industry under big pressure from politicians and regulation. In 1996 I thought, here comes the internet, it’s borderless, now we can get rid of the politicians and do gaming without them. That was the first view of it.

Host:  Unfortunately the politicians are still in the game.

Pontus:  It took quite some time before they came into internet gaming. First they just wanted to kill it and shut it down.

[02:25]  4. Early milestones and building trust

Host:  What were the key milestones in the early days where you knew you’d made the right call?

Pontus:  I wasn’t convinced myself for the first year or two, and we had to build it all up first, so it took a good six or seven years before I realised this was good stuff. The tough part was gaining people’s trust, especially customers, because at that time the internet was something black and strange that people didn’t rely on, particularly for commercial business. You didn’t really know what should come, so I wasn’t convinced until years later when customers started to blow in and it actually worked.

[03:30]  5. Mentors and the stamina to lose money

Host:  Did you have a mentor or people supporting you along the way?

Pontus:  I had one or two older mentors. One was very fond of technological breakthroughs, so he said, this could be a technical breakthrough, the internet, just keep on doing what you’re doing. He was very supportive, and he had the stamina to see us lose some money getting there, which was really important. It’s a bumpy ride, not a smooth progression, and although we’ve been profitable for many years now, the gaming industry is always bumpy.

[04:43]  6. Advice to an AI-era founder

Host:  If someone with a startup came to you now, wanting to launch an AI gaming venture, what advice would you give?

Pontus:  It’s funny you ask, because last week two guys came to my office wanting to build an operator with AI doing this and that, with very new ideas in there. I said, just go for it, it’s brilliant, and maybe we’ll invest from Betsson and be a part of it, we’ll see.

Host:  There you go, first scoop for the podcast.

[05:52]  7. Staying curious after decades

Host:  Having been in the game so long, how do you stay curious in your role?

Pontus:  iGaming is a bumpy ride, things happen all the time, it’s never boring, so I’m still curious. There are new things to come, new technology breakthroughs, new markets to open up. We sometimes discuss that once you go into iGaming, very few go out again to a telecom company or a bank, because they’ve seen the action and get stuck with it, because it’s fun.

[06:56]  8. Why iGaming is misunderstood, and a cheap tax target

Host:  iGaming tends to be misunderstood. Can more be done to expose the benefits of working in it and the good it can do?

Pontus:  I think we are a bit misunderstood. To simplify, people in general, and politicians even more so, don’t like gaming companies. When politicians look at their budgets and see a black hole, beating up the gaming companies with a tax rise costs them few political points, whereas other savings might do political damage. So we’re not in a very good position there.

[07:43]  9. Channelization, the black market and educating politicians

Host:  How can the industry come together to make that message to government clearer?

Pontus:  It’s been discussed here at the conference, and it’s very important that we get together and educate the politicians. In many countries the channelization level of players in the regulated industry is trending downwards, while the black, unregulated part is trending upwards. If that continues, there won’t be any regulated business, more or less. Politicians aren’t really doing their job, because their job should be to protect players more than to get money in the tax box, and the players who go to the black market are exactly the ones who most need the regulated industry.

Host:  In some countries regulation has gone so high that players are pushed to the black market and tax take actually goes down. Do some governments just want to obliterate the industry?

Pontus:  I think it’s a timing thing, and I’m optimistic it will have to swing back. We’ll have to educate politicians, administrations and regulators so they understand how to deal with this industry and make it sustainable.

[09:28]  10. Carrying a legacy brand, and sponsoring Inter and Boca

Host:  Betsson is a longstanding brand. How do you carry the weight of a legacy brand while still driving modern transformation?

Pontus:  It is an old brand with good history, but it has changed over time. Being a big company, we have the resources to try things, invest in new experiments, fail with some and succeed with others, which helps us move ahead as the industry develops. And now, which we could not do when we were smaller, we sponsor big soccer teams like Inter and Boca Juniors in Latin America, which shapes our brand and shifts how the general public views us.

[11:10]  11. Measuring sponsorship, and jerseys in the street

Host:  How do you measure the benefit of those sponsorship deals?

Pontus:  We measure it a lot. I was positively surprised by how we analyse a sponsorship opportunity before going in; it’s not a guess with money on the table, it’s high-level calculations, and then we measure whether we reach the goals, and the calculations turn out very sharp. Then I do my own totally non-scientific version: walking the street in Malaga I met a person in a Betsson jersey and thought, that’s us, we’re here, and in Buenos Aires I met a guy in an Inter shirt that said Betsson and thought, this is good.

[12:25]  12. Why those clubs, and a global brand with a local product

Host:  You’ve chosen big historic clubs. Was that always the opportunity?

Pontus:  We couldn’t have done that even five years ago. In Inter’s case they have a strong legacy with Latin America and many players, and we have a big market and fan base there, so it makes sense globally.

Host:  You’re strong in Europe and Latin America. How do you balance regional independence with central brand consistency?

Pontus:  Thanks to those big sponsorships, the brand personality is similar wherever you go: a trustworthy company, listed on the stock market, so you can see we really exist, which matters in gaming. All business is local, so we adapt the product to every market, but the brand and its personality should be the same across all markets.

[13:22]  13. Betting quirks: everyone loves to gamble

Host:  Any interesting quirks about how different markets bet?

Pontus:  Wherever you go, in Spain they say here everybody loves to gamble, in Norway everybody’s crazy about gambling, in the UK everybody loves to gamble. So the takeaway is that everyone likes to gamble.

Host:  Which is great for you.

[14:24]  14. Long-term vision: the best customer experience

Host:  You’ve stressed long-term vision over short-term gains. How do you keep that mindset consistent?

Pontus:  Our vision at Betsson is to have the best customer experience in the industry. It’s a good vision because we’ll never reach it; we’re on so many markets and can’t be best everywhere, and we’re not, by far, so it gives us a lot to work on. You could ask almost any of our 3,000-plus people and they’d tell you that’s our vision.

Host:  How is that message delivered, through town halls, managers?

Pontus:  We don’t measure every manager on the vision itself; they’re measured more on financial KPIs. But we’d never reach those KPIs if we didn’t strive for the vision, so it’s very important.

[15:52]  15. In-house tech and owning the sportsbook

Host:  Your tech platform is often seen as a key differentiator. How does in-house tech drive a commercial edge versus outsourced?

Pontus:  There are different schools, almost different religions, on that. I’ve not been convinced all my life that everything should be in-house, and I’m still not, because you should do what you’re good at. But we have our own platform and our own sportsbook, which has become really competitive in the past few years. Betsson is a sports brand, and the sportsbook is the entrance door to our offering; many then play casino too, but sport is what we communicate, so it’s our main product. We believe it’s important to control the main product so we can diversify and innovate for ourselves rather than for someone else.

[16:56]  16. Using AI, and why a bet is still a bet

Host:  We can’t avoid AI. How are you using it?

Pontus:  We use it a lot, especially in software development and testing, and in customer support. Sometimes I’m asked if AI is the end for sports betting, and I say no, because sometimes Mallorca will beat Real Madrid or Barcelona. It doesn’t happen often, but it will happen again, and no AI in the world can predict when. Maybe I’ll have to reverse that one day, but not so far.

Host:  Where do you see the best ROI from AI right now?

Pontus:  Content production. Commercials, photos, movies, all of it can be done a lot faster and cheaper. It’s a revolution of technology.

Host:  You were there at the start of the internet. What lessons carry over to this transformation?

Pontus:  Don’t underestimate the impact. When the internet came, plenty of people said it was something weird for technology guys to play with, and we even had a minister in Sweden who famously said the internet was just a short-lived thing that would disappear; you can still find it online. We’re in a similar position with AI: it’s happening, and we can’t really see how much it will impact, but it will be a lot.

[19:52]  17. Guardrails and risks

Host:  Has there been internal resistance to AI, and how have you navigated it?

Pontus:  We’re embracing it, but step by step, and we always have to think about security for the end user, which is very important, so there are restrictions on what you can do and which tools to use.

Host:  What are the biggest risks as it stands?

Pontus:  I can’t define them exactly, but there are risks when you start doing things with AI, and we don’t want to make those mistakes. The engineering team can do more or less what they want, but they have to use the tools we’ve approved.

[20:40]  18. Gambling and entertainment blurring

Host:  The worlds of gambling and entertainment are blurring. How do you see that balance evolving?

Pontus:  Entertainment is evolving a lot, but internally we say people just want to play a slot machine or blackjack, or put on a bet, and that has been the same for 100 years. That basic demand will sustain and continue. The competition from other entertainment is tougher now, but a bet is a bet, and there’s always a place for that.

[22:07]  19. Principles for the next decade: regulation and tax

Host:  Looking ahead, what principles will matter more, not less, across the next decade?

Pontus:  For the industry, regulation and taxes are on everyone’s agenda: how we, more or less, fight against regulators and tax rises. That’s what will need to change over the next decade.

Host:  Give me reasons to be optimistic.

Pontus:  Gaming has been here for more than 100 years and will remain forever. So it’s really a question to the politicians: do you want to be involved, control it and tax it, or not? Most governments have decided they want a piece of the pie and also want to act responsibly and regulate, and if that’s the case, then it has to swing back.

[23:23]  20. The message to the public, the black market, and his kids

Host:  As well as government, there’s misunderstanding among the wider public. Is there a message the industry needs to portray?

Pontus:  We could be better at explaining who we are, what we do and why. We’re the good guys, we serve you good bets and we pay out if you win, so we need to be around.

Host:  Do we need to come together as an industry to address the black market?

Pontus:  We need to get together and discuss, exchange ideas and share frustration, so we move in the same direction, even if we don’t all act together. Consumers go to black-market sites because the offering is very good, and some countries put in regulations so tight they almost take the fun out of gambling, which becomes problematic. My kids play a little bit regulated and a little bit unregulated; they don’t care, and I’m still the CEO of the regulated company, but they say, I get bonuses here, I don’t get bonuses if I play with you. I see it on a daily basis, and it’s tough.

Host:  So you’re lobbying in your own house as well as at government level.

Pontus:  Yes, that’s what I do at the dinner table.

[25:31]  21. What still surprises him, and the World Cup

Host:  After decades in the sector, what still surprises or challenges you day to day?

Pontus:  A lot of things. I get surprised when regulators jump back and forth, say they’ll raise the tax, then don’t, then raise it even more. There are challenges all the time, but it’s also, for example, the World Championship coming up, which raises the temperature across the industry. Things happen every day, and that’s why, after all these years, I still want to keep working in it. It’s tough some days, but it’s so fun.

[26:49]  22. Wrap up

Host:  A great place to wrap up. A huge thanks to Pontus for joining us on the EGR Power Seat.

Pontus:  Thank you very much.

Host:  We hope you enjoyed the episode. Thanks again to our sponsors Pragmatic Play. EGR subscribers get early access to each episode of the Power Seat via the website, before we publish on Apple, Spotify and other platforms. Until then, we’ll see you next time.