Bet365: A UK powerhouse - will this be the same in the US?
It was 2000 and in the midst of what can only be described as a gray, slapdash car park, stood an almost nondescript Portakabin, like any other that you would expect to see in an area that for many years had played home to the UK’s leading pottery industry.
Stoke-on-Trent, a city almost down but not out, was once synonymous with the family name of Wedgewood, though now there is a new sheriff-in-town who has effectively laid the foundations for regeneration.
Step forward the Coates family; Peter - the owner of Stoke City football club and his daughter Denise, whose highly perceptive acorn of an idea changed the landscape of online gambling as we know it.
It was in this Portakabin where Bet365 - now arguably, the UK’s leading online gambling operator - was born. In just over 20 years, it has turned into a nearly 5,000 strong company with offices in its home city, the British-owned colony of Gibraltar, Malta, Bulgaria and Australia.
Armed with a £15 million loan from RBS (Royal Bank of Scotland), leveraged against her father Peter’s betting shop business, Denise got to work and the company has won numerous accolades and pioneered the live betting scene which has completely revolutionized the industry.
Pathway to success
Now the number one employer in Stoke-on-Trent, it is clear that the city relies on the company in the same way it did for the pottery industry, though it has been a telling journey for the operator.
Having laid the foundations during the first year, Denise Coates, in her position as CEO and Managing Director, from the car park put together a team of developers and analysts to build out a website, to make sure that it was an ‘industry first’ and very quickly it moved through the gears.
At the age of just 33, Coates was ahead of her time, transitioning a small, regional bookmaker into a global online operator takes a great deal of differing characteristics; but most of all an unwavering self-belief and vision.
It is reported that the Bet365 domain was purchased from eBay for $25,000 which laid the platform for Coates to apply her mathematical mastery (being a first-class honors graduate in econometrics) in addition to the knowledge of the industry she had gained from her father.
Together with younger brother John and under the tutelage of Peter Coates, the executive committee devised a focused strategy, designed to help them truly stand out among numerous other start-up, online betting brands that were also fighting for attention in what was effectively an arms race.
Very rarely heard in the media, Denise was once quoted in local newspaper, the Stoke Sentinel as saying: “I was convinced early on that gambling would work on the internet.”
“At the time, the dot-com bubble had burst and a loss-making internet company wasn’t looking the best investment.”
It was this conviction for how the company could work that paved the way for a tactical business plan, centered around an unrivalled product, customer experience and astute marketing.
Standalone industry brand
Compared to the likes of Flutter Entertainment, Kindred Group and even the super conglomerate Entain, who have very much gone down the merger and acquisition route, Bet365 has stayed as a single-brand business and are even leaders in a number of markets.
Where Bet365 has an edge on other companies without a doubt stems from the leadership team. Coates cut her teeth on the front line in her father’s betting shops, as a cashier, where she learned first-hand about what customers want and how they behave.
Added to her prestigious academic background, it was an ideal synergy. Coates’ industry knowledge, vision and intelligence have helped to drive the company forward - a relentless work ethic that perhaps explains why Bet365 have kept everything in-house.
The last two years have prompted one of the biggest and perhaps most important industry changes in terms of growth. With the US beginning to legislate in force as many states have passed both online gambling and sports betting bills over the last two years and the betting public response has been staggering.
Bet365 initially launched in New Jersey in 2019 and witnessed a modest response, while its license to operate in Colorado is still currently pending. Where problems may arise for Bet365 is in customer confidence with a brand that the majority of the US market are not aware of. Currently, Flutter Entertainment-owned FanDuel and DraftKings make up over 75% of the US market, while the Entain and MGM Resorts International-owned brand, BetMGM is also rapidly acquiring significant interest.
While they are undoubtedly a leader in the UK, without a key US-based partner the general opinion is that Bet365 may struggle with US market penetration. However, this could be an opportunity that the firm may not want to miss out on, with early estimates indicating that the US market could be worth $19 billion as early as 2023.
They will also be aware that they would not be the only UK brand competing for a market edge. Should the US market be a serious part of their growth strategy, it is with brand impact where Bet365 may struggle particularly without a well-known partner that is based there.
Keeping as much control as possible though appears to be high on the list of priorities where Coates is concerned. In the early years, even the smallest of decisions went through herself and brother John which provides some clue as to why they have veered away from the industry merger and acquisition frenzy.
Key to the continued growth and success of Bet365 is keeping loyal to its roots. Two decades of hard work has helped to position it as one of the most popular online sportsbooks in the UK market and expanding aggressively into the US, with its current operation could well be a distraction.
Undoubtedly, this will be a tough business decision and with the American market moving forward rapidly, the company knows that its competitors are forging ahead, gaining a tactical advantage.
Can Bet365 afford to keep the current status quo?
Applying for a Colorado license appears to suggest that the brand does have US plans, however it is perhaps surprising that they are not aggressively pursuing any major expansion.
Aligning itself with a well-known partner in the US certainly is a logical course of action and this model appears to be working well for other non-US online gambling firms; Australian brand PointsBet being a prime example of a sportsbook that has done a great job of positioning itself in legal states over the last year.
Certainly partnering with a leading US media company could give Bet365 the requisite pulling power for potential customers as well as applying for licenses in further key states. Being denied a license for New York, was a bitter blow for the brand; NY having surpassed the $1 billion mark for mobile sports betting wagering in its first month - an industry record.
With a recognised US name on board, this would definitely help it to gain not only credibility but also influence with legislators and smooth the transition if they are serious about establishing itself as a major contender in the country.
From a dull, uninspiring car park to multi-storey dizzying heights in just over two decades, Bet365 it appears is shooting for the stars.