Mattias Wedar on the Balcony, the Dancefloor and Rebuilding LeoVegas

[00:00]  1. Welcome to the Power Seat

Host:  Welcome to the second episode of EGR’s podcast Power Seat, where we talk to the leaders behind the Power 50. I caught up with LeoVegas CEO Mattias Wedar for a fascinating conversation about his career and his recent step up to the top job, including a great analogy about dancing in the nightclub. This episode is brought to you by Pragmatic Play. Now, on to the episode.

Host:  Today we are delighted to be joined by Mattias Wedar, CEO of LeoVegas Group. Welcome, Mattias.

Mattias:  Thank you, great to see you. Thanks for having me.

[01:00]  2. The career that shaped how he leads

Host:  You have recently become CEO. Looking at your journey so far, what experiences most influenced how you lead today?

Mattias:  I started in the industry at Mr Green, where I spent three years before the company was sold to William Hill, then six years as Chief Product and Technology Officer, and now CEO for about eight months. First and foremost I have worked with some brilliant leaders at both Mr Green and LeoVegas. A couple of things stand out. One is the importance of technology; you cannot underestimate controlling your own destiny and having the ability to drive the company where you want to go, so controlling your ecosystem matters. The other is talent. It is tricky to recruit in iGaming, partly high competition and partly a stigma, especially in Scandinavia, where a lot of talent think the industry is dodgy or shady. The most fun experience is when people come in expecting a cowboy industry and find something like a bank, or management consulting, hyper-professional, data-driven, governed and regulated by both the financial world and the local regulator.

[03:00]  3. The talent stigma and safer gambling

Host:  On that messaging challenge for the talent pool, is there a wider industry job to do together?

Mattias:  Yes. The answer is to stand behind safer gambling and to not flood the market with marketing. If you watch a Champions League game and see betting company A, B and C, it wears out the audience. In Sweden a few years back it was casino advertising 24/7 and people get fed up; I get fed up too. We can be more moderate in our messaging, and promote things beyond masculine sports to reach other demographics. There is more we can do for sure.

[03:59]  4. From Accenture and yellow pages to iGaming

Host:  Before the industry, talk to me about your experience in other sectors and how you brought it through.

Mattias:  My first job out of university was with Accenture, then Andersen Consulting, where I spent about eight years. That gave me a generic toolbox for solving complex problems and understanding industries. Then I spent ten or eleven years in the yellow pages industry, which went from a monopoly to hyper-competitive; it was a fight every day, almost impossible, and we did not make it. That taught me grit, and the importance of priorities. I try to focus on what really matters and build an organisation that can handle the rest. In the past LeoVegas maybe did too many things just because we could; now we need to do things because we should. With 11 or 12 markets and nine jurisdictions we simply cannot do everything, so we prioritise product development and marketing spend where there is a path to sustainable profitability. That requires tough decisions, because if we spread ourselves too thin we will not come out on the winning side.

[06:05]  5. Owning the decisions

Host:  Now those decisions are down to you, how does that feel?

Mattias:  I am still humble and still learning, only eight months in, stepping into the shoes of a predecessor who is a legend in the industry. I am building a strong management team and we talk a lot about priorities: always do what the customer wants. If you filter decisions through that funnel, is it good for the customer, is it good for our owners, it does not get easy, but it gets easier. We cannot do everything, so we focus on where the best return is.

Host:  Do you face internal resistance to that?

Mattias:  I would not call it resistance, but a country manager in a big market needs a good case for why I would invest in a smaller one, and if I put nothing into that smaller market it will not grow. Every day it comes back to priorities, and it is the trickiest thing we do.

[07:30]  6. Rebuilding the operating model: one P&L to five

Host:  Across so many jurisdictions, how do you drive local independence while keeping brand consistency?

Mattias:  Part of my onboarding was rebuilding LeoVegas’s operating model. We had always been quite central: central products, compliance and operations, one P&L. We decentralised into five market regions we call clusters, each with a managing director and local management team, moving from one P&L to five. I want to give that MD as much mandate and accountability as possible to drive their own P&L, because it is hard to sit in Stockholm and know what is cooking in Spain, or sit in Malta and understand the UK. Darts is popular in the UK and no one cares about it in Sweden; horse racing is big in the UK and barely understood in Italy. At the same time we capture synergies, so technology and central product development stay central. Getting closer to the customer and the competition is part of our recipe for future growth.

Host:  Has anything surprised you, and is it more expensive to run?

Mattias:  It is more expensive, but we are certain it will pay off in better growth. After 14 years of doing things a certain way, turning 180 degrees takes a huge number of sessions and workshops just to nail who is accountable and responsible. Changing the direction of a 2,000-person company takes time; some people are still in the tunnel, and hopefully they see the light.

[10:18]  7. Balancing agility and scale

Host:  You sit between agility and scale. How do you drive that?

Mattias:  One of LeoVegas’s DNAs is that we have always been fast, and that is getting harder as we grow to 2,000 people across nine jurisdictions, because you have to build local things: affordability limits in the UK, new products in Sweden, and so on. Technology, innovation and AI could actually help us do things faster. The decentralised model, with product, technology, legal, HR and ops inside each local team, increases speed because they do not need to vet everything through central teams; if it makes sense and they can justify it, they do it. We still keep a strong central team around third-party technology, integrations, payments, responsible gaming and compliance. We formally launched the new organisation late last August, so it is early, we are not done, and it will always be tweaking, but I am starting to see the contours of what can come out of it.

[12:17]  8. Where LeoVegas differentiates

Host:  Where do you think you can truly differentiate? One aspect, or a mixture?

Mattias:  We have eight brands, but two hero brands, led by LeoVegas, that get most of the investment; the others support that journey. We are trying to tap into two things. One is that we are now owned by MGM, and if anything symbolises them it is customer centricity and entertainment, so we ask what entertainment really means for our product. The other, close to my heart, is customer journeys. As an industry we have been quite bad at guiding customers through the interaction points, KYC, AML and payments, compared with a Revolut or a Spotify, who embraced it in a more customer-centric way. Entertainment in the brand and product, coupled with the far-from-sexy grind of fixing customer journeys and document uploads, those are my two big priorities for standing out.

[13:49]  9. What iGaming can learn from fintech

Host:  What can the industry learn from a Revolut or a Spotify?

Mattias:  The way they communicate, the tonality and the UX. I did an annual KYC with Revolut recently: fifteen days before, they nudge me, they give a little reward, and when I upload my document it is a built-in scanner, I scan my driver’s license and it is done in two seconds. We still have clunky document uploads, which is old school. In some countries you have to do it that way, but there is a lot we can learn from fintech, Revolut and Klarna in Sweden, on how they onboard customers.

[14:39]  10. Gaming, media and sport converging

Host:  As gaming, media and sport converge into one ecosystem, what role do you see LeoVegas playing?

Mattias:  We are a casino company; 80 percent of revenue is casino, 20 percent sports, and we will always be casino first. We are trying to take intellectual property and assets from our owners and embed the Vegas atmosphere into the product, whether that is game titles or reward schemes. In sports we have north stars like “always show value,” so wherever you are in the sportsbook there is progression to a mission or a reward to unlock. We build those in whether it is casino or sports.

[15:41]  11. Nordic identity, King of the North, King of Casino

Host:  A strong element of LeoVegas is a Nordic identity. How do you balance that with global ambition?

Mattias:  We want to see ourselves as king of the north. We are the biggest private operator in Sweden, and we have the ambition to be so in Denmark and in Finland once it regulates. We try to export that: in Spain our advertising calls us King of Casino. You always need a special touch per market, but almost 50 percent of our revenue is Nordic, so we will always be a Nordic-priority company. A Nordic identity, to me, is focused more on value in the product than on bonusing; in Sweden you can only give one welcome bonus by regulation. We are moving away from bonus frenzy toward people coming back because they like the brand. LeoVegas should be fun, friendly and a bit cheeky, with friction-free journeys, and it stands for the power and the lion, with Vegas as an identity carrier.

Host:  How do you prove you are the King of Casino?

Mattias:  First, grow faster than the market financially, and second, brand association. If you ask people who is the king of casino, I hope many would say LeoVegas, though there are bigger operators than us, the big UK operators are far bigger.

[18:10]  12. Regulation, tax and the black market

Host:  We cannot talk without regulation. What are the most challenging headwinds right now?

Mattias:  It is easy to get dragged into tax hikes, but I tell the company to focus on what we can impact and innovate there; we can join trade lobbies, but there is only so much we can do about tax. The movement in the UK is far from good and counterproductive, because it drives the black market. A tax increase from 20 to 40 percent is tough, and it benefits the big operators who can absorb it. In the Netherlands the net tax inflow actually fell when they raised it, which is directly counterproductive. Players go to the black operator because the product is, to a large extent, better and more fun, and the black market can hand bonuses to exactly the players at risk of harm. If the regulated product were as good as it can be, there would be no need. So rather than focusing on taxes, regulators should give us the ability to compete on a level playing field, and I do not see that in any regulated landscape.

Host:  There is a view the UK pushed ahead knowing the tax gain would be limited, almost to damage the industry. Your take?

Mattias:  Honestly I do not know; it becomes speculation, and they are probably smart people. I think it is a shame, and somewhat our own fault going back ten years, when we flooded the market on marketing and did not protect players. It was less serious than today, and to some extent we are paying the price. But a government body wanting to maximise tax revenue and getting the adverse effect, as in the Netherlands, is beyond me. The best way to block the black market is to block the flow of money into it, which takes you down to payments, though these operators move into crypto and it gets much tougher. I have deep respect for how hard that task is.

[21:41]  13. Keeping players out of the black market

Host:  What can you do as a company, from a product perspective, to keep players out of the black market?

Mattias:  Loyalty and brand promise, and back to that boring customer-journey example, taking care of the customer at every touch point with no dead ends and no friction. At LeoVegas we are now measuring drop-off points in a much more sophisticated way: of 100 customers who went one way, how many completed, 90, 62, 35, and where there is a high drop-off, we fix it. Always measuring where customers leave us is an important thing.

[22:34]  14. Data versus instinct: the balcony and the dancefloor

Host:  Now you are in the top role, what part does instinct play versus data modelling?

Mattias:  One of our values is data-driven decisions, which is great, but there are things you cannot see in the data: what do I fundamentally believe will swing the needle in two or three years. In my annual 360 review my team said I was too data and fact based, and wanted me to lean back and say what I really believe in. So I probably need to back away from data a bit, which hurts to say. A leadership coach gave me a mantra I love: be on the balcony and on the dancefloor, and move between them. You dance in the detail with the folks, then go up to the balcony to see where people are heading and whether they are dancing to that music or something else. I am quite an operational person and get dragged into the nitty-gritty, so I have to force myself up to the balcony from time to time.

[24:31]  15. Where success lies: dig where we stand

Host:  Where is success for LeoVegas in the next couple of years?

Mattias:  Right now it is “dig where we stand,” taking share in the markets we are already in with the best possible product, while embracing efficiency and AI to drive profitable growth. We are not looking to do big M&A or expand into five new markets. Finland, once it regulates, is very close to us and where we will try to truly become king of the north. There is market potential where we already are, in the UK, Netherlands, Spain, Italy, Germany and Canada, so there is more to do here than in some crazy M&A journey that would be hard to justify.

[25:45]  16. The best advice he ever got

Host:  Final question: what is the best piece of advice you have ever been given?

Mattias:  One I got early on: follow good leaders. In my career I have never picked an employer, I have picked the boss. You learn so much from being around a good leader, especially about priorities. All the managers I have had, and the people who have reported to me, taught me different things, and I try to take the best of that into my own world. Follow good leaders, and good things will happen.

Host:  A brilliant way to end. Mattias, thanks so much for joining us on this edition of Power Seat.

Mattias:  Thanks for having me. Thank you.

[26:45]  17. Wrap up

Host:  We hope you enjoyed the episode. Thanks again to Mattias for his time, and to our sponsors at Pragmatic Play. EGR subscribers get early access to each episode of Power Seat; head to the website for full details. We will see you next time.