Using Guyana as test case
SVL sets timeline for regional roll-out
Published:Friday | January 25, 2019 | 2:30 AM
Gaming and betting company Supreme Ventures Limited, SVL, has pumped close to $200 million into its foothold in the market of English-speaking, and soon-to-be oil-rich Guyana, a Caribbean-aligned country that is really based in South America.
With all the positive attributes of that market, SVL President and CEO Ann-Dawn Young Sang says Guyana is a test case and learning curve of sorts for firm plans by the company to spread its wings to other countries of the Caribbean and Latin America.
“Our being in Guyana shows our plans. We plan to take Supreme regionally,” Young Sang told the Financial Gleaner in an interview. Guyana, she said, “is the first footstep out. We have plans to do others”.
That build-out is expected to unfold over the next three to five years, but the gaming boss declined to reveal her hand on which markets would be tackled and in what order.
“I have a lot of regional experience, so do other members of our team. Our plan is to make Supreme a force to be reckoned with wherever we go,” said Young Sang, who, before taking up the top job at the Jamaican gaming company in October 2017, was Caribbean and Latin America regional vice-president for International Game Technology, IGT, the world’s largest lottery operator and technology partner for SVL since the local company’s inception in 2001.
The SVL Guyana operations kicked off two weeks ago with the broadcast of horse racing from Caymanas Park and video gaming terminals or slot machines, for which SVL had already obtained licences.
Over time, the company will be seeking licences for its other business activities, including its number games and sport betting. The timeline for ramping up operations in Guyana is to be determined by the lessons learned from the performance of the first two business segments being tested there.
“We are focusing on those two segments first to make sure that we fine-tune and understand the market. Guyana is a big sports betting market,” she added, noting that the mining of more customer information will help to inform the roll-out of additional segments.
The early feedback from Guyana is “very good”, although showing “a need for some tweaking,” she said. The SVL leadership is also not perturbed by political developments in Guyana since December last year with the government’s loss of its one-seat majority in Parliament, the possibility of early elections, and several issues related to these developments being contested in court.
“Every country in the world has political issues,” said Young Sang, while noting that the company remains focused on growing the business in the South American country, perfecting the overseas model to fit its regional expansion timeline, and making social investments in Guyana as a good corporate citizen.
The planned overseas expansion comes alongside what Young Sang describes as generally good financial results for the company. Absent a dramatic derailment of the company’s performance in the fourth quarter, SVL will report record profits for 2018 – the only question being just how much its net earnings have grown across the full year.
Those results are still pending. But, at the nine-month mark ending September 2018, SVL profits had already climbed above $1.5 billion, up 14.5 per cent to that point; but more significantly, those results were well ahead of the annual profit made by the company in the previous three years, each producing net earnings that were just shy of $1.2 billion.
Revenue inflows, which topped $46 billion at the nine-month mark, are also poised to climb above $60 billion for the year, which would also be a new record for the company.
“Supreme is one of few companies in the world that is in all gaming sectors and this shows our level of experience and understanding of the business. We are operating in several complex segments and doing it well,” said Young Sang.
“All segments are said to be driving growth but, importantly, sports betting is said to be seeing a more than 50 per cent growth, with lottery operating being the predominant contributor,” she said.
The company’s escape from three years of flat profits, recorded from 2015 to 2017, coincides with Young Sang’s first year on the job.
She views that year as one of changes and solidifying the company’s foundations.
At a practical level, it meant increasing investments in Caymanas Park, the horse racing business acquired in March 2017 from the Government of Jamaica, which is now being run under subsidiary Supreme Ventures Racing and Entertainment Limited, SVREL.
The SVL CEO also oversaw the pilot roll-out of the long-planned mobile betting application, that was confined in the testing to sports betting.
Identifying Caymanas as an important driver of revenue – the racing outfit currently accounts for one-tenth of group sales – Young Sang said the investments made through SVREL are expected to be recouped in the short term, although the entity was not yet turning a profit.
“We have a good set of strategic plans,” said the gaming boss. “We are making sure the foundation is set and identifying various revenues streams.”
SVL’s impact, she contends, is not only measured by its growing profitability, but also the income-earning implications for its Caymanas Park stakeholders, network of agents, staff and the company’s social contributions to good causes.
SVL employs 500 permanent staff but is also said to have created about 3,000 indirect jobs. Prizes paid out last year topped $40 billion.
“As a corporation, we have to balance the obligation of profit to shareholders, but when you grow your business all other areas grow,” she said.
Looking ahead, Young Sang says SVL will be more strategic and surgical in its business approach, which means it will be relying more heavily on market data analysis, innovation and technology to inform decision-making. In that regard, the company announced a new hire – Assistant Vice-President for Business Intelligence & Analytics, Emmanuel Salako – who took up the position on January 3.