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THE ONLINE GAMINGNo 12 MAGAZINE MOBILE IS HERE BETSSON LIVE SCORE APPLICATION WITH OVER 100,000 DOWNLOADS 6,889 SEK MILLION IN CUSTOMER DEPOSITS 2012, AN INCREASE OF 32 PERCENT AWARDED SPORTSBOOK AND CASINO OPERATOR OF THE YEAR ANNIVERSARY ISSUE WELcoME to CONTENTS OUR 50 YEAR ANNIVERSARY MAGAZINE! Betsson is turning 50. If you’re wondering how it can be possible for an Internet company that started its online operations in the late nineties to turn 50, I can explain. Betsson was previously called Cherry and worked with land-based gam- ing. Later, the company chose to focus fully on online gaming and divested the old land-based part, which is still called Cherry. Despite this refocus, the heritage is strong and very much present everyday through our main owners, who founded the company back in 1963. This heritage has given us a unique understanding of the business we are in, and we use the experi- ence and knowledge in everything we do. In this edition of Betsson Magazine, we will give you some insights both in how we operate today, as well as how we have done it for the past 50 years, through a historical review of the Group. So put on your best retro glasses and enjoy! Magnus Silfverberg, President and CEO, Betsson 2012 IN NUMBERS 3 READY TO FREE UP THE GAME 34 THE YEAR IN BRIEF 4 Gustaf Hoffstedt gives his view 50 years of success INVESTING IN STABILITY 36 WORD FROM THE CEO 6 Pays off through an improved Building on 50 years of customer experience embracing change A RESPONSIBLE, 50 YEARS IN BUSINESS 8 SUSTAINABLE COMPANY 38 THE MARKET 21 BUILDING THE DREAM TEAM 42 THE BETSSON MODEL 24 BETS B 46 The wealth builder MANAGING GROWTH 26 BETSSON AND MALTA 52 MOBILE HAS FINALLY SCORED 30 BOARD OF DIRECTORS 54 2012 was really the year SENIOR MANAGEMENT 56 LEGAL TRENDS IN ONLINE GAMING 32 ADDRESSES 60 On the cover: Friendly International. Lisbon. April 21, 1963. Portugal 1—0 Brazil. Brazil's Pele leaps above Portugal's goalkeeper in a mid-air duel. CONTENTS 2012 IN NUMBERS Betsson AB’s core business consists of investing and administering shareholding in companies which – through partners or by themselves – offer games to the end users via Internet. Betsson AB owns Betsson Malta and other companies which operate games through partnerships and own websites. Betsson Malta offers Poker, Casino, Sports betting, Scratch Cards, Bingo and Games. Betsson's own customers mainly originate from the Scandina- vian countries and other parts of Europe. Betsson AB is listed on NASDAQ OMX Nordic Mid Cap List, (BETS B). % NUMBER OF BRANDS WITHIN 30Gross PROFIT INCREASE NU31MBER OF NATIONALITIes 26 COMPARED TO PREVIOUS YEAR OF OUR EMPLOYees BETSSON OF WHICH ELEVEN ARE B2C BRANDS . B6ILLION SEK IN C9USTOMER 74peopLE worKING 8 ON M23OBILE SOLUTIONS GENERATED DEPOSITS, AN INCREASE OF 32 THREE contINENTS 7 PERCENT OF REVenues IN PERCENT COMPARED TO 2011 THE fourth QUArter GROSS PROFIT PER PRODUCT 3% 6% Betsson’s active customers increased by 29 percent last year and the amount of customer deposits has 30% increased by 32 percent. The contribution from Casino Casino, which is Betsson’s largest product, increased Sportsbook 61% by 39 percent. Poker } Other – 03 – – THE ONLINE GAMING MAGAZINE – THE YEAR IN BRIEF BETSSON IS A faST-GRowING GROUP OF compaNIES WITH CLOSE to 50 YEARS EXPERIENCE IN THE GAMING INDUSTRY. THE compaNIES OFFER A WIDE RANGE OF FIRST-CLASS ONLINE GAMBLING PRODUCTS AND GAMES IN A SAFE AND USER-FRIENDLY GAMING ENVIRONMENT. JANUARY APRIL Betsson MALTA Betsson MALTA SELLS LAunches four Its FIrst MOBILE portAL 2012BRAnds on the to PArtner REALM, WHO newLY reGULATED LAunches IT UNDER THE DANIsh MARKet under BRAND Bets10. A DANIsh LIcense. The portal contains an in-house This is the first re-regulated developed mobile Sportsbook, market that Betsson has start- scratch cards, poker and games ed to operate in. Betsson Malta from different suppliers. also acquires an Italian license. BETSSON IS Betsson was awarded “Online TURNING 50 Sportsbook Operator of the year” by IGA. This is an acknowledgement that the long term efforts broadening the Sportsbook offering pays off. – THE ONLINE GAMING MAGAZINE – THE YEAR IN BRIEF MAY In addition, Betsson’s brand portfolio is strengthened THE technICAL significantly within the MIGRATION OF BetsAFE betting segment, as NGG +100% IS concLUDED AND THE receives approximately During the fourth quarter, end users ACQUIRED coMPANY IS now FULLY INTEGRATED 50 percent of its revenues bet SEK 308.5 million via mobile Into THE Betsson from Sportsbook,” said Sportsbook, comprising 8 percent GROUP. Magnus Silfverberg, CEO and of the total gross turnover in Sports- The brand Starcasino.it is soft President of Betsson AB. book across all gaming solutions. launched in Italy under the newly acquired Italian license. JULY Revenues from mobile gaming solu- Betsson co-founds the indus- tions comprise 7 percent of total The subsidiary Angler try organisation BOS (Bransch- Gaming is divested to revenues, representing an increase föreningen för OnlineSpel) in Betsson’s shareholders and of over 100 percent compared with Sweden together with Unibet, listed on the stock exchange the previous quarter. Paf, Betfair and Bonnier Aktietorget in Stockholm. Gaming. Magnus Silfverberg is elected Chairman of BOS. AUGUST Betsson Malta appoints a new CEO, Ulrik Bengtsson, whose previous positions include CEO of Viasat Sweden among others. The casino brand Maxino is launched by the NGG subsidiary. NOVEMBER JUNE Betsson MALTA IS NAMed CASIno Betsson AQUIRES OperAtor of the YeAR AT the NORDIC GAMING GROUP 2012 EGR AWArds IN London. The acquisition of Nordic The judges felt that Betsson was the out- Gaming Group (NGG), with standing winner due to continued growth its main brand Nordicbet in its casino business across Europe as well is closed. NGG adds 185 as its hugely impressive mobile offering 2012 employees to Betsson. that shows no signs of slowing down. “Through this transac- Betsson adds this award to its previous tion, Betsson continues achievements as Socially Responsible to strengthen its Nordic Operator of the Year (2009) and the Sports- operations and its leading book Online Operator of the Year (2011). position amongst the private gaming company alterna- SEPTEMBER DECEMBER tives in the Nordic region. MOBILE LIVestreAM- THE ITALIAN BRAND STARCASINO.IT ING IS ADDED to THE IS FULLY LAUNCHED IN connectION MOBILE OFFERING. WITH THE APPROVAL OF ONLINE Betsson subsIDI- SLots BY THE ITALIAN GAMING ARIes HAVE now AUTHORITY, AAMS. INTEGRATED MOBILE SOLUTIONS Into 21 + E185MPLOYEES TO BETSSON OF THEIR BRAnds. – 05 – – THE ONLINE GAMING MAGAZINE – BOARD OF DIRECTORS/SENIOR management BUILDING ON 50 YEARS OF EMBRACING CHANGE FOR 50 YEARS, BETSSON HAS BEEN MANagING AND adaptING to CHANGE. DURING ITS LONG HIStoRY, THE compaNY HAS REPEatEDLY facED SIGNIFIcaNT REGUlatoRY AND TECHNOLOGIcal CHALLENGES. –06 – – THE ONLINE GAMING MAGAZINE – WORD FROM THE CEO “The acquisition of NGG gives Betsson a stronger brand portfolio, a product mix more geared towards Sportsbook, and a stronger presence in the market-place.” IN THE 1970S, slot machines were tion of NGG. This acquisition gives as enabling Betsson to cover more banned in Sweden, forcing the com- Betsson a stronger brand portfolio, segments of the market with its broad pany to change its entire business a product mix more geared towards range of brands. model. In the 1990s, the Internet Sportsbook, and a stronger presence Today, Betsson is the largest non came about and the company decided in the market-place. During the year, state-owned publicly traded online to explore that opportunity, resulting the integration of Betsafe was also gaming operator in the Nordic coun- in the fantastically successful Internet completely finalised. Now the Bet- tries. With that said, we believe that gaming practice that is Betsson (and safe brand runs on the same technol- there is still plenty of room for growth Net Entertainment) today. ogy platform as the majority of the in this market. Just some 20 percent Since starting our Internet opera- other brands in the Group. This will of all gaming occurs online and that tions some 14 years ago, Betsson give many advantages going forward, figure will continue to grow. How- has been working in a fast-growing such as less duplication of technology ever, Betsson is also keen on adding market environment. The market is development, a broader product offer- another major market to our strong- growing due to some fundamental ing for the brand, and synergies in the hold in the Nordic region. There are macroeconomic, technological and Sportsbook operations. currently two major initiatives within demographic factors that are working Betsson has also been active the Group taking that direction. First, to our advantage. First, the Internet is on the mobile development side. Betsson is exploring opportunities for becoming more and more accepted With 22 brands having a mobile site, participating in online gaming in Asia. as a channel for consumption. Sec- Betsson now has 80 percent of all Secondly, in 2012, Betsson launched ondly, Internet payments are becom- the brands covered from a mobile a casino-focused site in Italy under the ing safer and more sophisticated, and perspective. Having built our own new Italian license. With this initiative, third, as the younger generation gets mobile Sportsbook gives us an edge the Group is trying to take advantage older, gaming on the Internet, instead against the competition since it adds a of the recently allowed range of on- of in land-based venues, is becoming lot of flexibility and improves the user line games, such as online slots. The an obvious and preferred choice. experience. Our belief is that mobile site launch was accompanied by a big The speed of change in this envi- solutions will be increasingly more im- marketing campaign, with the aim of ronment, coupled with the growing portant for the e-gaming business and leaving a footprint in the Italian market.