How will Entain’s deal with STS affect the Polish market?
Entain’s interest in STS will have a huge impact on the Polish market, not only in bookmaking, but also in other gambling sectors overall. The editors of iGaming Express, basing on their own knowledge and experience, decided to predict and point out trends that will be noticeable in the near future, as well as after the definite finalization of the whole deal.
STS will begin another phase of cost optimization
Poland’s leading bookmaker has for some time taken a very strong policy on strong cost optimization. This was evident both, in media statements by CEO Mateusz Juroszek, the regular industry observations, and official company documents.
On such a large scale on which STS operated, the numerous processes can be improved. One may wonder what is the point of renewing at least some sports sponsorships when STS has such a strong brand built up anyway.
In terms of sponsorships, several important contracts expired last year and were not renewed – Lechia Gdańsk (taken for a few hundred thousand due to a lack of other interested parties), Pogoń Szczecin (Betcris replaced STS) or, most importantly, Lech Poznań, whose place will soon be taken by one of the fastest-growing bookmakers in Poland.
STS retained only the sponsorship of the Polish national football team, considering it strategic, although no other operator took part in the bidding.
A key issue in cost optimization is the new agreement with Ekstraklasa and PZPN (Polish Football Association), which will significantly reduce costs for all betting operators in Poland.
The average annual remuneration of STS S.A. employees (excluding members of the management board and supervisory board) in 2022, despite high inflation in Poland, has increased y/y the least, counting the last 5 years back.
STS’s communications policy will be less aggressive
Until now, Mateusz Juroszek, as the company’s majority shareholder, has had enormous freedom in creating media messages. Once the deal is completed, he will get rid of this privilege and his freedom of opinion will be significantly limited. This is due to a number of reasons, but the main one is the fact of what kind of organization Entain is.
The company, whose stock market value on June 12, 2023, is valued at $9.58 billion, cannot afford to allow the CEOs of the various group entities to communicate freely.
It is probable that the CEO of STS will reduce his media statements and critical voices at least in terms of the Polish monopoly – Totalizator Sportowy. Entain, if it attempts to lobby for a change in the Polish law, it will do so in a more sophisticated manner, which should also have a positive impact on the culture of industry dialogue in Poland.
Superbet and Betclic will want to take advantage of STS’s transition phase
The process of finalizing Entain’s share purchase will be a long-term process. While STS continues to optimize its processes and many decision-makers are wondering what to do next, the most active competitors will try to increase their market share and presence in terms of building their brand.
Few people probably knew about the conversations between Entain and STS, so the public information that has reached many STS employees will surely cause them a lot of doubt. This will make entities in a dynamic phase of development, such as Betclic and Superbet, particularly motivated to take advantage of the moment of doubt and lethargy of the company as a whole.
Mateusz Juroszek will take on the role of an industry investor, leaving his position as CEO of STS
According to the announcement, Mateusz Juroszek is expected to remain the position of CEO of the company after the deal is finalized, but perhaps few doubt the inevitable. A certain era in STS’s corporate history is simply coming to an end, and Mateusz Juroszek’s place will be taken by a new person after about a year. Mateusz Juroszek will take over a supervisory role in Entain’s structures, but he will no longer brand the bookmaker itself with his name. Entain will certainly want to choose a completely new person for this position.
Mateusz Juroszek, as an investor, will certainly increase his financial involvement in such listed companies as Better Collective and GiG.
Foreign companies will be encouraged to enter the Polish market
For a long time, STS and its owner have claimed that on the Polish market there are only two companies with the potential to earn money. However, recent periods have shown that Superbet is growing dynamically (although due to its dynamic investment it is simply impossible to make money) and, above all, Betclic whose profits cannot be found directly in the Polish National Court Register due to the nature of international corporate structures. However, it can certainly be said that, in Poland, Betclic is profitable, but releasing such communication to the European industry was not to the liking of both STS and Betclic.
Entain’s entry into the Polish market, through the acquisition of Poland’s largest bookmaker, will draw the attention of all of Europe, and consequently, the curtain of the legend about the lack of earning potential on the Polish market will simply fall.