Power Seat: Vlad Kaltenieks on why it is “very difficult to compete” in the UK as a challenger

Lightly edited for clarity; opening sponsor message condensed.

[00:03]  Introduction and career milestones

Host:  Hello, welcome to EGR’s Power Seat podcast. My name is Joe Levy, news editor at EGR, and I’ll be your host for today’s episode, where I am delighted to say I am joined by BoyleSports CEO Vlad Kaltenieks. Vlad, how are we doing?

Vlad:  Hello. Great to be here. Really well. How are you?

Host:  I’m great. Thanks for taking the time out to join us from the rainy island. How is it over there?

Vlad:  Absolutely. Yes. They promise 28 later today, so we’re looking forward to a really nice summer evening.

Host:  Yeah, we can dream. Maybe when pigs fly. Who knows? Right, then we’ll crack on, Vlad, with some leadership questions to begin with, a reflection on your career and how you’ve got to this point as leading the omni-channel Irish bookmaker. But to kick off, what are the key moments in your career, and how have they changed and shaped the way that you are as a leader?

Vlad:  I think there are a few real milestones. I started as an entrepreneur running my own business, so I had to do pretty much everything: learning about what running a business means, how to engage with the customers, looking after all of the operations. And then after a while I decided that I wanted to live in London and change the entire surrounding, because I was in Latvia before. So I moved to London, started to work for somebody else, and basically got into the whole data space. At the time it wasn’t exciting at all. It was something that people had just started to think about in terms of how to use the data to make better decisions. And in a few years after, the data suddenly became this blood of the business, the new oil that can be commercialised, that can be used really to understand the customers, and I found myself in the middle of it. And then, fast forward a number of years, I was invited to join Betsson in Malta to lead on their big data programme, to really figure out how the data can support the business in providing a much better service and product to the customers, as well as to aid internal decision-making. And that was my first foray into the gambling realm, and I haven’t looked back from there, because once you get into this industry I think you’re here to stay, because I doubt there’s anything as exciting, fast-paced and fast-moving as our industry today.

[02:36]  Transformation lessons from William Hill

Host:  So, in that journey, when you joined Betsson and then since then, obviously you were at Hills and now BoyleSports, is there anything that stands out, Vlad, where you reflect and think, wow, I achieved that, that is a crowning moment in my career?

Vlad:  I think there are always steps that you go through. At William Hill we were working on a big transformation. When I joined, the brand was incredibly well recognised, known in the industry, known in the customers’ minds, but also falling behind in terms of the new developments around digital and online. So the challenge there was how to preserve that legacy, that heritage that the brand enjoyed for many, many good years, and also move it into the new reality, and actually define what that new reality is. Opening up for new customers, making sure that the product resonates well in the digital space, but also not losing that retail environment. And seeing how to think more widely and broadly: how to keep what we have that’s working super well, that we need to continue doing, but also infuse it with new things, and to do that in a way that actually takes people on the journey. And that’s something that is not very easy to do, because the business is running, your competitors are doing things, and you need to be able to react in the best manner possible. So this is when the data comes in. This is where the insight and analytics come in, to really start helping shape the thinking. And at the end of the day, then you need to think in terms of, okay, what are the decisions that we need to make as a business in order to move forward? And a lot of that actually helped me then to transition into my current role with BoyleSports, to really make sure that the heritage that the business has enjoyed over the 40 years, we’re keeping that, we’re maintaining that, we’re improving it, but at the same time we’re also injecting new energy, we’re exploring new areas, and we’re doing that in a very focused and responsible way as well.

[05:10]  The hardest decision was the rebrand

Host:  So you’ve been at BoyleSports for a few years now, Vlad, leading that company. What’s the hardest decision that you’ve had to make so far?

Vlad:  I think there are a few. One that jumps straight to the front of my mind is when we were thinking about doing the rebrand. I think it’s a big endeavour. I’ve seen in the industry, and also in other industries, that people sometimes just change the logo, or maybe tune a little bit of the colours, and that’s it. For us, we really wanted to make sure that we’re doing it in the right way. So we spent probably just close to a year talking to our customers, doing research, really understanding what BoyleSports stands for today and what we want it to stand for in the future. All of that synthesised together brought us to the point where we had a really good understanding of what we needed to do. But even having that information, having that data at your fingertips, it also requires the decision-making. So somebody, and in this situation it is actually me, had to decide whether we’re going to go for it or actually we’re fine. And I didn’t want it to be just a rebrand, changing the logo, changing the colours. I also wanted to make sure that we are communicating, that we’re showing up in a new way, that we’re resonating well with our customers that have trusted us for many, many years, but that we’re also opening ourselves up and giving other customers an opportunity to consider us, to choose BoyleSports, and to see how we’re evolving and also to be part of that journey. So at that moment it’s probably been one of the toughest decisions. And when I look back, it’s just over a year now since we’ve done the rebrand, and I am so glad that we actually decided to do that, because from that moment we had such a new injection of energy. We’ve pursued many new exciting opportunities in the partnership and sponsorship space, and also pushed the limits of our products and marketing. So I think it really paid off, but it’s the one that is on the edge. Yes, it can turn in any direction.

[07:19]  Working with founder John Boyle

Host:  A couple more points on leadership, Vlad, before we look into some BoyleSports specifics. I wanted to look at two sides of the coin here. Firstly, what’s it like working with someone like John Boyle, right? Who’s born into this business, he’s created it from the ground up, and you’re now the CEO. I appreciate John’s the chair. What’s that dynamic like? Have you had challenges in being able to take a business over from someone who’s so entwined in it?

Vlad:  It’s really, for me, that respectful manner in the way that we engage with each other. So when I joined, John’s position was that I’m the CEO and John is there to support, and that has been the case throughout all of these years. There are things that we agree on and there are things that we agree to disagree on as well, but it’s the conversation. It’s basically bringing all of these sides to the table and being able to look at them from different sides. I bring that digital data dynamism, and John brings over 40 years of experience of growing the business, getting it to the point where it’s very successful, well known in Ireland, and also making great headway in the UK. So John is able to offer and shine light, maybe, on the points that I might not have considered previously or not considered enough, which is great, because at the end of the day we then are able to build a full picture. And when we’re looking at making the decision, we are able to make these decisions in a way that’s supporting ourselves in a better manner, because we have that information and we have thought about what’s the upside, but also really looked into the downside. And if the downside should happen, for example, how would we think about it, how would we react to it, and what would be the steps for us that we need to take in order to mitigate that. So I think that dynamic has really helped me to learn more about the business, to step up into my first CEO role.

[09:27]  What he looks for in future leaders

Host:  And I appreciate, Vlad, that you’re at the start of your journey as a CEO, right, so it’s only a handful of years. But when you’re looking to that next generation of leaders who you can put under your wing and train up and really recognise as having potential, what are you looking for in those leaders of tomorrow, to coin a phrase?

Vlad:  I think for me it’s really in terms of energy. We at BoyleSports are very energetic. We like to move forward. We would like to overachieve as well, and we like to think in terms of what the future might hold in a positive way, and really then turning those challenges into opportunities. So for me, one of the key traits that I’m looking for is that energy, that mindset where people can apply their intellect, their experience, and see what’s the way forward. We are comparably small and independent when we look at the overall gambling and iGaming reality. Yet we have been able to find a really nice way forward for ourselves, to win hearts and minds of customers, for them to consider us, and when they do, they like the experience that they are having, whether that’s in our digital realm or in the retail space. So, as I said, that energy, that mindset helps, and obviously experience as well. People that have been on the journey previously, they’ve seen what’s working well, they can get into the shoes of the customers, they can get into the customer mindset and wear that hat and look from the customer’s perspective, and take decisions when thinking about what’s next for the business. If it’s right for the customer, then it’s probably right for the business as well from that perspective.

[11:36]  Challenger mindset and private ownership

Host:  Looking at BoyleSports then, BoyleSports specifically, Vlad, you mentioned there that you’re smaller than the rest of the guys, which is fair enough, but some people might not realise this is a business that’s been around for 40 plus years, right? It was founded in 1982. So is it a case of BoyleSports still having that nimbleness of a company half its age, even less? So what is it that gives BoyleSports that edge at the minute, you’d say?

Vlad:  I think it’s that mindset, that energy, that agility that we have. It’s the can-do attitude. It’s finding our own path. We know what good looks like. We can see that in terms of the product, we can see that in terms of the experience, but we’re also very clear about what we stand for, where we want to play and in what way, and also what’s the opportunity for us. Because when you look around, there is so much news coming our way, whether that’s regulation, or maybe that’s in terms of the taxation, or maybe in terms of the competitiveness, and it can be very daunting in the moment, where it’s like, oh my god, it’s just so difficult to move forward. But because we have that approach that is stemming from the mindset that we can turn everything around, from a problem into an opportunity, this is why the way that I think about the business is that it’s a challenger brand. And the challenger aspect of it is in terms of looking and finding our own way forward and turning everything into an opportunity. And that is not in a dreamy aspect of it, saying everything is wonderful, everything is going to turn out in the best manner, but it’s an opportunity to ground ourselves in realism. This is the situation. This is where we stand. This is what we are good at, like for example the people and technology, and our focus on the operations, looking after our customers. And this is the future that we’re shaping for ourselves, where we want to get to, where we want to resonate more with the next generation of customers, where we want to provide a more seamless digital experience throughout retail, connecting to the online space. And then we look in terms of how can we close the gap if there is a gap. How can we move forward? How can we rally our troops and orchestrate that momentum to move forward? And this is really the people and the mindset that exists in the business that allows us to do that. And the structure, in terms of being a privately owned business, also facilitates and helps that agility, because we can then look and say we want to win in football, we want to win in iGaming, we want to continue and we truly believe in our racing proposition that customers truly love, and these are our big bets. We can stand behind them and then we can really move at pace, with agility and with impact, forward. So I think those parts around having that team, having the people, knowing our strengths, and then having that clarity around where we want to move forward and how to get there, that really moves us.

Host:  So you’re saying it’s better to be privately owned than publicly listed for that.

Vlad:  I don’t know. I think you can make it work pretty much everywhere. I’m going to go back to the mindset. For us, being privately owned has really unlocked the opportunity, because the owner and chairman John Boyle is super supportive and very much into the business himself. He knows what the journey is. He knows what the ups and downs are, because he has been part of that. So he’s super sympathetic, he’s supportive, and he also understands what the decisions and the accountability look like. So it becomes a bit easier. And we have, for example, a very long tenure in our organisation, where people have been around for many years, and it’s great to see how they still learn, how they still have a lot of energy to move forward. And a lot of the public companies, they have a similar situation, where if their direction is clear then the business is moving at pace and it’s moving with conviction. But when that direction maybe is not coming as clearly as needed, maybe trouble starts in that situation.

[16:18]  The UK, 100 million pounds and rising duty

Host:  Looking at the UK, Vlad, last year you guys announced a 100 million pound investment into that market, a real revamp, and that’s across retail and online. It included the front of shirt sponsorship of West Ham, which is being retained this season. But obviously that’s all come before the budget in November, and Rachel Reeves, then Chancellor, announcing remote gaming duty going up to 40%, which it did on the 1st of April, and then general betting duty, excluding British domestic horse racing, will go from 15% to 25% next April. How tough is the UK, and can anyone, let alone BoyleSports, win in that market?

Vlad:  I recall my time at Betsson, and somebody said that the UK is probably one of the markets where brands come to die. It has just been so characteristic of the challenges in the market, with the big brands present capturing the majority of the market, very difficult to compete. And I think recent developments are just making it more and more difficult for brands to operate and to compete in the market, and I think that’s the reality of things. When we were making our announcement just over a year ago, we thought long and hard about that. We thought that the taxation was going to increase, that the regulation was going to increase as well, maybe not in the numbers that were really announced, and we also don’t know what the future holds. But we have considered that, and we still thought that what BoyleSports brings from that energy proposition, that dynamism, is still relevant to the customers. And we’ve just announced that we’ve opened 400 stores across the UK and Ireland, which means that we have 80 stores in the UK, and we’re well on the move to continue on that journey. We’re continuing to improve our digital proposition, and you have seen us strike a number of really exciting partnerships, most recently I think with the Northern Irish Football League, and then we’re the official betting partner of the League of Ireland as well. So I think all of that is just us continuing on that journey and really believing that the UK still holds a great opportunity for a brand like BoyleSports to win.

[18:53]  Retail investment and the aim to permit rule

Host:  And retail obviously, you know, that’s the roots of the business. You’re investing in retail still. We’ve had the announcement that Prime Minister Andy Burnham is opening up a consultation to end the so-called aim to permit rule, and also some bits and pieces around AGCs. But Vlad, I suppose on the aim to permit, how much of an impact could this have on BoyleSports and the retail sector at large in general?

Vlad:  Yeah, we’re really committed to retail, and we still need to see how all of this is going to play out. I think once we know more detail we are going to make adjustments to our plans as required. We’ve been on this journey for many years now, working with the local authorities to really make sure that we are opening in the right places, and that we’re able to provide that service to the communities that exist across the UK. I think personally, for me, it’s a great opportunity to continue to support retail and to provide these safe spaces, regulated and safe spaces around betting, which is very important in our industry, because there’s so much talk, and the data that we have seen, particularly around the big black market. Opening a retail store is not a trivial matter. It’s a lot of energy, time and money that goes into that. We have to get multiple different permits. All of that takes time and resources, multiple engagements, both with local authorities and with planning, and so on and so forth. So we have a process around that. And given the recent announcement, we just want to see how that is going to change and what it means for us as a business as well.

[21:02]  Tech transformation and the iGaming opportunity

Host:  On the digital side, Vlad, there are some pretty significant tech transformations happening at BoyleSports, both front end and back end. I know you guys have got a tech hub out in Europe as well to support those ambitions. When you first came in the door at the business, what did you see that was like an open goal, a tap in, from the digital side? What was just like a quick fix that, there we go?

Vlad:  First of all, I was so impressed with how far the business went and achieved, given the scale and the number of people working just in the tech department around the product and proposition. Using maybe the supermarket analogy, we probably have most of the things on the supermarket shelves as compared to some of the tier ones, and I think that’s a great achievement from both a sportsbook and an iGaming perspective. When I joined, I felt immediately that there’s definitely more that we can do in iGaming for BoyleSports, and I think it’s also in the name. Yes, BoyleSports have been so passionate and part of the fabric for racing in Ireland for many, many, many years, and that’s continuing today as well. Yet I felt that there’s definitely a dynamism or a trend that we’re seeing in Ireland with people more embracing the iGaming side, and in the UK we know that it’s well developed. So I felt that investing more and looking after our iGaming vertical would yield some significant returns to us, which it did, and we are continuing to invest in that. We’re creating proprietary games. We completely rebuilt our front end for that iGaming proposition, and we have quite a number of exciting plans coming in the next six to 12 months. So that’s going to continue, at the same time looking after the sports. The other thing is really to continue on some of the good work that has been happening within the business, particularly around our omni-channel proposition. I think one of the biggest strengths that the business has is the ability to engage customers across digital and retail and really to deliver that omni-channel proposition. I probably would say that we’re one of the best operators out there that is doing retail and digital together really well. So I just wanted for it to continue and to give our customers options to choose how they engage, where they engage, and at what time and in which manner.

[23:37]  What really good omni-channel looks like

Host:  When you say really well on the omni-channel, Vlad, I think a lot of operators have spoken to this opportunity, but it’s hard to know what really good looks like, I suppose. I mean, in reality you’d want complete seamlessness, where you can access your account on the retail kiosk as you can on your mobile, no hiccups along the way. So what does really good look like in omni-channel for BoyleSports, and what is better than really good?

Vlad:  I think better is that never-ending goal of that seamless experience.

Host:  Mhm.

Vlad:  You want exactly the same experience as you’re getting in digital in your retail environment, all the same products, and you can seamlessly continue your engagement. If you’re in retail, for example, then you can pick up and get that journey continued in digital. And there is some way for us as well to go in that space, and I think it’s great to have that north star, that orientation that there’s going to be always an improvement. The other piece of it is really what does the good look like, and it’s in terms of doing your basics well. It’s making sure that the customers have a stable, consistent experience. So when they are depositing, let’s say, online, their funds are immediately available and they can use them in retail, for example, no matter where they are in the country. So if you get these basics right, then I think that’s already half of the story. And then also engaging the customers in the way that matters for them, whether that’s through specials or rewards, just to say a little bit of thank you for their commitment and for being a customer of ours.

[25:45]  Squad Builder and owning a product

Host:  On the product side, Vlad, one thing I wanted to pick your brain on was this Squad Builder proposition that BoyleSports launched earlier this year. It picked up a little bit of traction on LinkedIn and looks like a really interesting product, right? An expansion or development of maybe a bet builder. And quite often people lament the lack of innovation in the industry and in sports betting. I’m aware that a competitor launched a similar product maybe last year, I think, but can you just talk us through the genesis of that product and what your hopes are for the upcoming season for BoyleSports?

Vlad:  I’m really glad you mentioned it, because myself and the team had a great debate around the table, and these are strategic conversations around where are we heading, what are we here to do, and are we going to always play catch-up and be middle of the road, or is there something that we can truly call our own and be innovative? So for example, when you go onto our digital products, you will see that we’re the home of early payout. This is something that we’re really promoting, in terms of that you’re always a winner with BoyleSports. That’s in terms of the value. But when we look at our product, we were thinking, okay, bet builders are great, there are a lot of different developments that are going on across the industry and that continues, and we keep on improving our products and making sure that it’s easy to use, and we also have the features that all of the other competitors have. But is there anything that we can truly call our own? Something that is going to set us apart, and where we don’t need to play catch-up, where we can actually lead and other people can start looking and saying, oh, this is something that BoyleSports did, this is something that they pioneered, and this is something that maybe the other competitors need to start thinking about in terms of closing that gap. And this is exactly our conversation that was around the Squad Builder. We looked at it probably towards the end of last year, beginning of this year, more seriously, and we said this looks interesting. We always wanted to do something different and innovative. We’ve done tons of research on it. It feels that it’s going to resonate with the customers, and we wanted to launch it for the World Cup, which we did. Now, you asked me about one of the most difficult decisions there. The other difficult decision was that we had an opportunity to promote it heavily or to choose to soft launch it, and we decided that we’re going to soft launch it, because we weren’t sure what was going to be the traction with the customers. And since then we’ve seen a phenomenal engagement from customers just finding it on the site, on the product, on the mobile app, and we also launched a version of it in retail. And we’re just going to continue to grow it for the start of the season. We’re going to do quite a big promotion where we’re going to offer it to our existing customer base that hasn’t engaged with it yet, but also to go outside and to talk about it as a true innovation that BoyleSports have delivered. I think for me personally, again, it’s one of these things that is important, to make sure that brands like ours have something that we can call our own and we can lead with that going forward.

[29:36]  Ireland’s new regulator and the black market

Host:  I’d be remiss not to mention Ireland, Vlad, bearing in mind that’s where the company’s headquartered. The GRAI came into effect recently. We’ve got a new regulator in Ireland, we’ve got a new framework in Ireland. What are your views on that process? Do you think the new licensed market is going to be a positive one? Is there going to be enough protection against black market leakage? Just wanted to get your thoughts.

Vlad:  We have welcomed the development, and we’ve been open for the new regulation to come into the country for a long while now, adopting a voluntary code of conduct across a number of members of the industry. So for me personally, I think again it’s a great development, having a regulated space where the rules are clear, where the companies can operate and compete on a level playing field. I think it creates more opportunity for ourselves. The threat of the black market is real. We have seen that across multiple different jurisdictions in Europe. The great thing about the Irish regulator is that they have engaged with many other regulators across Europe to take their lessons learned and to really understand how certain decisions shaped the market there, in order to bring hopefully the best into the Irish reality. We are well engaged with the regulator in terms of our conversation, what we’re seeing from our customers, what we’re seeing across the market as well. I certainly would advocate for the regulator to take proactive steps in addressing the black market threats. The most recent news looks positive, with the regulator announcing that they’re looking at this space, and then really warning that it’s a criminal offence to operate without a licence. I think this is all good news, because at the end of the day we all want to make sure that it’s an environment where people are feeling looked after and protected, and with the black market you have none of these protections available to the customers.

[31:44]  Dealing with pressure as a CEO

Host:  Have you figured out yet, Vlad, how to deal with pressure?

Vlad:  That’s work in progress. I think every day is a new day. I think when I wake up I remind myself to prioritise, to think positive, and also that things are going to pass. It might feel in the moment that there’s quite a lot, and as I said at the beginning of our conversation, one of the things that I love about this industry is that it’s so dynamic, which means that there could be so many things happening not just in a week but actually in a day. There are times that I sit at my desk or my computer and I see messages coming through across both jurisdictions, from multiple teams, in terms of the development, and you sometimes think, okay, wow, what do I do with that. But you find a way. Again, back to the mindset, in terms of, okay, pragmatically, is this within my control or not? If it’s not, okay, what does it mean for the business? Do I need to start thinking in terms of a plan or a strategy or an approach that would mitigate or ensure, let’s say for example taxation is changing, then we need to make sure that we have a good set of initiatives to be able to mitigate that impact. If there’s anything else that is within my control, then it’s how do I show up as a leader? What is that messaging? What is that direction? What is that support and decision-making that I provide as a leader in order to support the organisation, support the teams and make it much easier for them to operate and to move forward? So I think all of that combined really gives that new depth of resilience and ability to move forward.

[33:52]  The next 12 months and sign-off

Host:  One last one for you, Vlad, and then I’ll let you get back to the day job. What do the next 12 months look like for BoyleSports, right? We’ve spoken about it throughout this conversation: tax, black market, product development, dealing with a retail legacy, trying to push forward on omni-channel. What else does the future hold around M&A, around local regulations, things like this? So how do you foresee the next year for the business, and maybe looking at the industry as well?

Vlad:  I think for us it’s onwards and forwards. It’s to continue on the great trajectory that the business is operating in, in a responsible way. So it’s really improving our products across digital and retail, really engaging our customers in the right way, showing up in the right places through our sponsorships, partnerships, maybe ambassadors, really continuing to innovate in the product space. Squad Builder I think is just the first step. We have a number of other ideas that we want to move forward. And at the same time, being responsible, looking at the fundamentals of the business, making sure that the energy and the investment and the resources are going in the right places, that our foundations are solid, that we’re utilising all of the latest developments around automation, maybe the AI space and so on, to really help the organisation to be successful, and continuing to look for opportunities. For some, the new regulation and taxation and the changes in the environment mean doom and gloom, but for others it could be an opportunity to really show up in front of new potential customers in the right way and win share of market or share of wallet. And I certainly orientate the organisation towards that, to make sure that we make informed decisions and we go after opportunities that are real, that are going to deliver the maximum opportunity for ourselves and for the business. I think when you keep those things in mind, that’s universally applicable for all organisations, no matter what your size, big or large. It’s continuing to figure out what is next, what is that vision, that north star, how to get there in the best way possible, what are your strengths that you can utilise, but then also looking at what needs to be protected in order to assure that, and where are the weaknesses that really need to be faced into and addressed. And I think that’s half of the job already done, within our control, what we can do. And then we can hope to engage with the wider space in terms of maybe politicians, regulators, in order to ensure that we’re creating a sustainable environment where companies like BoyleSports can continue to develop and provide an excellent service to the customers.

Host:  Fantastic. Well, I appreciate your time today, Vlad. Is there anything else that we should have spoken about that we didn’t?

Vlad:  I think we’ve covered quite a lot. Great to connect. I think the next 6, 12, 18, 24 months are going to be quite exciting, and we’re going to see quite a number of developments. It would be great to check in after a period of time to see where we are.

Host:  Absolutely. Well, thanks again for coming on, Vlad. Much appreciated. Fantastic to hear about your journey and the BoyleSports journey. This has been EGR’s Power Seat podcast. I’ve been Joe Levy and we’ll catch you all next time. Thanks for listening.