Breakfast with NEXT 🥐☕️ LeoVegas CFO Stefan Nelson talks competition on the public markets and the padel court
The iGaming NEXT editorial team sits down with a leading industry executive over the most important meal of the day in our new feature, Breakfast with NEXT.
Malta-based iGaming NEXT journalist Sonja Lindenberg heads to the LeoVegas boardroom in Sliema for edition one to chat with CFO Stefan Nelson.
Competitive. Determined. Ambitious. Each of those words describes LeoVegas’ CFO Stefan Nelson. Nelson, who also heads the company’s Malta office, is a passionate padel player.
Like many long-time tennis enthusiasts, Nelson has now been consumed by padel, although he claims to have played it long before it became popular, like some kind of racquet sports hipster. He trains three to four times a week on the court in Sliema.
Speaking to iGaming NEXT, Nelson admits: “I really enjoy winning, in sports and in business.” It’s a sentence that stirs the imagination and gives you an idea of his competitive drive.
Sport and business have a lot in common in terms of motivation, vision and values. A winner’s mentality has nothing to do with arrogance, but is about endurance and confidence, according to Nelson, who “always wants to give his best.”
Nelson’s path into the iGaming industry was not straightforward. He joined LeoVegas in August 2018 after nearly 12 years with Swedish bank SEB, where he held various positions throughout this tenure.
As director of corporate finance at SEB, he advised and prepared various iGaming companies across the ecosystem on their IPOs, including LeoVegas, Evolution, Raketech, Better Collective and Mr Green.
While at SEB, he met and worked closely with LeoVegas co-founders Gustaf Hagman and Robin Ramm-Ericson. “I helped them with their funding rounds and later with their IPO on the Nasdaq,” says Nelson.
“There are advantages of getting away from short-term performance pressure, quarterly results and the need to constantly navigate different investor opinions.”
“When Gustaf called me – that was two years after the IPO – to offer me the CFO position, I had a pretty good idea of what to expect, because I knew the company quite well.”
However, he adds: “When you are working with a company from the outside, you see the public people and you have a feeling of how they are, but you can’t really see ‘under the hood’.
“What I didn’t understand before I joined was what a strong culture this company had. I was really surprised that there was so much engagement on all levels.”
After one year with the company, he was asked to relocate from Stockholm to Malta to direct Leo’s activities on the island – home to some 600 staff.
“When the idea of the move came up, my wife thought it was exciting. So, we moved here with our two children. We had initially planned to stay one or two years. But we are now into our fourth year, and we are still enjoying it.”
When asked about the greatest challenge he has faced as LeoVegas CFO, Nelson stressed that for him, it’s “how to take the company to the next level. In various aspects. To me this industry is still very immature, and there is a lot that we and the industry can do better.
“It’s also quite a complex industry with a lot of complexities, and as a CFO, I am always thoughtful of how we can advance in a scalable way. We need to do more; we need to run faster, but at the same time we need to do it with control,” he adds.
A pride of lions
Nothing gets the business world buzzing like a good takeover. Nelson is well aware of that, and he has played a key role in realising the successful sale of LeoVegas to MGM Resorts.
That deal involved the delisting of LeoVegas from the Nasdaq Stockholm. Was that an emotional moment?
“I actually have mixed feelings about that,” says Nelson. “I’ve spent most of my professional life with public companies. There are a lot of positive things about being on the stock exchange. It’s about access to capital and to investors who are putting pressure on us to improve.
“On the other hand, there are advantages of getting away from this short-term performance pressure, quarterly results and the need to constantly navigate different investor opinions. Some shareholders want us to grow fast, others want us to maximise profitability and pay dividends.”
Nelson continues and sounds somewhat relieved: “It does benefit us to be out of the market in a way, especially given the current market volatility. A company’s share price might go down because the market is down, and people get stressed out about it, although it has nothing to do with the health of the business.
“While we are still public, we are such a small part of the overall MGM family, that it feels close to being private.
“It’s not that we won’t have pressure from our new owners. I think to some extent there will be even more pressure, because they have really high expectations, but we have the luxury of making more long-term, strategic decisions.”
Transformative acquisitions can create organisational anxiety about the future; what C-suite executives and consultants call “post-merger integration” is typically a period of frantic change and uncertainty.
However, Nelson insists the day-to-day operations of LeoVegas won’t change dramatically, although he admits: “At the beginning, it will be mostly about finding synergies.
“We will also be more active on the M&A side than we have been in the past, which is natural because we now have a strong balance sheet.
“I think we are in a very good position to acquire operators, integrate them into our technology and give them the ability to grow faster,” he adds.
The personal touch
The next big project for LeoVegas is personalisation. “The new generation has grown up with Netflix, Spotify, Instagram and the likes. They want a more personalised experience, and we are not quite there in gaming.”
Nelson is a prime example of how data might not always correlate with personal preference. Despite being a numbers man professionally, he does not work out the odds when betting and would rather follow his heart while betting on his favourite teams.
He roots for Stockholm-based soccer team Djurgarden that, he admits, is not that well-known outside of Sweden.
In addition, he is a Liverpool supporter, but has been forced to develop a soft spot for their Premier League rivals Manchester City. In September, LeoVegas signed a partnership agreement to become the club’s official betting partner in Europe and Canada.
Nelson says that despite his regular betting patterns, he is yet to receive an offer that matches his preferences and past betting behaviour.
Where casino is concerned, he usually chooses the big jackpot games. “I know that over time the bank usually wins, so I aim for the big wins.”
An emergency economy
When asked about his expectations for the business over the coming months, Nelson said the worsening economic situation would likely have an impact on the financial performance of iGaming companies.
“I think what has tricked people in the industry to believe that the iGaming industry is recession-proof, is that the industry was still so immature in the 2008/2009 recession,” he says.
“Back then, the structural growth that resulted from players moving from land-based to online was still so strong that we didn’t really see a recession impact in the numbers.”
Nelson concludes: “Like in all recessions, you will have weak companies falling off, while strong companies will reinforce their positions, so at this time, we need to increase our market share.”
Steady progress serves as the main motivation for Nelson. “I always like to build something new, and I do like to benchmark how we are doing against our competitors.”
Competition is key for the CFO, whether on Nasdaq Stockholm or on the padel court in Sliema.
“I think I am the best padel player in LeoVegas,” he jokes. Which colleague will be brave enough to take on the challenge?