BetConstruct has doubled the size of its client base in a year and is opening its first office in Asia. In his interview to Gaming Intelligence, Chief executive Vahe Baloulian explains how it is growing at such a remarkable rate.
At the beginning of 2015, BetConstruct had 70 partners. It now has 140. Its Hong Kong office is set to open in January. Its 10 offices give it coverage in every continent bar Australia and it will soon house more than 1,000 employees.
BetConstruct has crept up on the competition, building a global business from its roots in Armenia, a small former Soviet republic of just 3m people nestled in the mountainous Caucasus region.
If its Eastern European roots go some way towards explaining its under-the-radar rise, its status as a non-reporting private company is another. However, it is the story of the birth of the company that best explains the company’s business strategy, its attitude towards its partners and ultimately, its success thus far.
“BetConstruct was kind of forced into existence some 10 years ago by large technology suppliers refusing to provide tools to small betting operations,” says chief executive Vahe Baloulian.
Back then, BetConstruct did not exist but a chain of around 200 betting shops in Armenia did. The entrepreneurial brothers Vahe and Vigen Badalyan owned VivaroBet. They remain the company’s sole shareholders. Vahe Badalyan looks after the pair’s banking and hospitality business while Vigen Badalyan oversees the gaming company. If you are a client of BetConstruct, you will likely have met Vigen. His hospitable attitude is a key to BetConstruct’s strategy and its customer service.
Going against the grain
When the large operators refused to supply VivaroBet with online gaming technology, Badalyan founded BetConstruct. Since that day, the company vowed not to turn away a single client.
“Many at that time were saying that it was probably foolish to think that we could take on these juggernauts and succeed, but we were hungry and we have succeeded by not losing sight of our priorities and values,” says Baloulian.
This is a theme that Baloulian will return to again and again during our conversation. He believes BetConstruct’s attitude is unique and he might be right. In this era of huge consolidation, Baloulian and Badalyan remain committed to supporting a diversified gaming market.
“We don’t want a marketplace dominated by a few oversized operators,” says Baloulian. “We want all operators to have equal access to the tools and the support they need to achieve the growth and success they desire. We offer the most advanced products on the market without overpricing them beyond the reach of the new entrants. We also don’t require our partners to pay minimum monthly revenue share.”
“We treat all potential partners with the same attentiveness and respect, regardless of their size, standing in the industry or market reach. Every partner – regardless of their tier – is of value to us. They may not be the biggest revenue generators but that does not mean we should not work with them and deny them a chance to succeed on their own terms.”
Black, white or grey?
This means that BetConstruct might focus on smaller markets that are shunned by other suppliers. Having a large base in Armenia means the Commonwealth of Independent States was an obvious target market when the company made its first steps. BetConstruct’s first clients were based in central Asia, where the company provides land-based gaming technology as well. Its strength in the CIS continues to this day.
The company’s roots help explain a refreshingly honest attitude to grey markets. At a conference earlier this year Baloulian spoke about the “opportunity in grey markets because in the future they will be black or white.” He said it was best not to dive into any market – particularly one that looks like turning black – but avoiding grey markets is not smart.
Baloulian is keen to expand on this, pointing out that grey markets are grey precisely because the legal situation is unclear. But he also points out that one man’s grey market is another’s white one.
The BetConstruct chief says that one of his company's partners is licensed in Armenia while other well-known operators have not paid for a licence because the government does not block operations. He says enforcement is often the key factor in operators’ decisions about which markets are suitable.
“It is like politics, they speak from both sides of their mouths,” says Baloulian, referring to online operators, who talk about only operating in regulated markets, when they mean also operating in markets where the government does not ensure they pay for a licence.
Land-based operators have less leeway in this regard and BetConstruct can point to a long list of land-based clients such as Estonia’s largest casino Olympic and Belgium’s Circus Groupe. While BetConstruct actively targets smaller markets and has a “realistic” attitude to its operators playing in grey markets, the company is vigilant. For example, despite its CIS strength, BetConstruct accepts that online gaming is forbidden in Russia. The company will tell its clients where they cannot dabble.
This, of course, is all part of the service for this most service-driven of organisations. While technology is vital, one suspects that it is customer service that Baloulian prizes above all else. He is particularly proud of the company’s 0.30.24 concept. He explains that each customer query receives an immediate acknowledgment. Then the company will reply within 30 minutes with a solution or with an explanation of when a solution will be forthcoming. BetConstruct will solve 99 per cent of these problems within 24 hours or explain exactly what it is doing to solve the issue.
Management and shareholders alike take these issues very seriously indeed. Clients can expect a very personal service from Baloulian and owner Badalyan, who likes to know all the company’s clients personally. In Armenia or elsewhere, he will always make himself available.This is indicative of the company’s culture and indeed of Armenia’s hospitable culture.
“In Armenian culture, every guest who knocks on your door is considered an angel sent from god,” says Baloulian. “So we treat every customer as a guest who knocks on our door.”
This remarkably humble attitude is not heard often in business circles and it extends to every part of the business.
“Everything provides an opportunity to learn,” says Baloulian. “This is the most important part of our operation – it is a learning process. We had to do everything from scratch so we had to learn from day one. We don’t mind being taught – it is an ever-evolving industry.”
Baloulian hopes this means BetConstruct listens to its clients more intently, trying to understand their markets, speak their languages, learn their requirements and their goals.
It’s all part of the culture. And as BetConstruct expands into Asia, following developments in Japan, Cambodia and elsewhere, it will be learning there too. It might be reaching parts of the globe and parts of the industry that other established operators shun. In doing so, it is growing at some pace.