Unibet - the dark side of the Bet24 takeover

When Unibet purchased Bet24 many of us was wondering what would happen to the action and the fun as per their catchy brand statement. After MTG selling the company at what many thought was a low price of €12.5M most were not expecting much to come from this Big Danish brand. While purchasers in the market such as Betsson have gone for a multi-brand platform, Unibet has merged the sports action into their own platform, under their own brand, controlled by their own personnel.

Ooops they did it again

Yes, Unibet went ahead and closed down the Bet24 brand. Last week it became known that Unibet is not only moving the players onto their platform, they will also close down the brand. The Bet24 brand was most probably at par if not stronger than Unibet in Denmark. It was a brand that had been built by the sweat of Holger Kristiansen’s and his closest team, and a heck of a lot of money invested by MTG in stock purchases and marketing.

One can definitely question closing down a brand like Bet24. Excel models are not everything, and one can in general question the strategy of one platform – one brand in gaming. Looking at the stock price and momentum, I think I agree with what Betsson is doing J

What about partners and Workers?

Well, the affiliates who give risk free marketing space to the operators in exchange for future potential revenue share received an email this week basically shutting them out from receiving further revenue shares come May 24th. The only way for them to get paid is if they had already referred the newly acquired Bet24 player to Unibet at an earlier point in time. That is the bread and butter of a lot of people down the drain. It is also not the first time Unibet has upset the affiliates, so it will be very interesting to see if Unibet still has the trust of some of the larger ones come May 24^th.

For many of the excellent people working in the Bet24 organization, 10 years+ of contributing to profit is now coming to an end. Those employed in Malta are protected by a very labor friendly law, but those who were hired outside of Malta are all more or less gone already. For the ones hired in Malta it remains to be seen if they are offered terms and conditions they can  accept to continue in Unibet.

Why did it go wrong?

What we really wonder about is why Bet24 was bought by MTG in the first place. Having watched this company since 2003 very closely I can’t really find an answer. They came in all guns blazing, but very quickly slowed down. Perhaps they were afraid of their bigger brands, and gaming was grey at best? Was it a protective measurement? If yes, why did they just not sell it when the growth was still good and every one was smiling?

Perhaps they simply saw that the existing gaming brands were pulling triggers left, right and center? Maybe they thought gambling is a simple volume game business (a lot of people still think it is) and that it would fit very well in their plan of  investing in this kind of business as it in theory would fit their media house model very well?

If the above hold true it may in fact explain why there seemed to be very little investment in the product. Bet24 used to be proud of competent sports focus, but the betting platform pretty much look the same today as back in the day.  Other operators have excelled. Just compare the live betting interface of Bet24 with Bet365 and you get what we are hinting at.

It must be said that Bet24 was out early with products such as poker and live betting. The problem seems they never built on the baby steps taken. The result of this; the product guys and girls had to work with less optimal tools while the opposition could hit the gas pedal.

The highly capable tech people that passed through the company also had to pull themselves by the hair more than once when facing cost reduction rather than investment. Keeping investment in the product down may keep expenses down, but did MTG have any idea what this may do to revenues? Or have MTG perhaps not heard of customer retention? In our opinion; this is an epic fail. It should be fairly simple to understand that no matter how much of a volume/marketing game the business is; if your competitors have a far superior product and market equally hard you lose.

There never seemed to be a grand plan in place for expansion outside the core market of Denmark and good markets such as the other Nordic countries (Where MTG is strong). In particular we found it interesting that a once started project involving setting up a few new markets; hiring staff for them and preparing the product was terminated without ever getting a chance to build up more than a few months. Did MTG think they would earn all the money in day one? Guys, success isn’t built in a day no matter how many TV channels you own.

Rounding it off

I am absolutely not trying to give Unibet a bad rep or throw any stones over at MTG. Unibet got a good deal, congratulations, well played! MTG, didn’t really know what they got into, and instead of exiting early they just let the problem compound. We have all been down that road, it happens. They still are a massive firm with an excellent core. Better luck next time!