Elliot Moss
Welcome to the Jazz Shapers podcast from Mishcon de Reya. What you are about to hear was originally broadcast on Jazz FM however music has been cut or shortened due to rights issues.
Good morning it is Jazz Shapers with me, Elliot Moss, it is where the Shapers of Business join the Shapers of Jazz, Soul and Blues. My guest today I am very pleased to say is Nigel Birrell; Group CEO at Lottoland, the fastest growing online lottery company. That’s something you probably didn’t know. He is a former lawyer and investment banker, Nigel is said to have been instrumental in the largest online gaming pay out in history, that’s the merging of companies, party gaming and Bwin. In 2014 he became CEO of the Lottoland Group which today employs over 350 people and has 9 million customers and is active across four continents – it’s quite a big business. Nigel believes players shouldn’t be restricted to one or two lotteries in the country where they live or be forced to wait for a big jackpot to be on offer and in September 2018 Lottoland was awarded with a Guinness World Record for the largest online gambling pay out ever of 90 million Euros. Not bad. We will be talking to Nigel in a few minutes about revolutionising a market, Lottoland’s unique insurance based model and his hope to attract younger audiences. We’ve also got brilliant music from amongst others, Lou Donaldson, Dinah Washington and Ray Charles. That is today’s Jazz Shapers, here’s Kurt Elling and Golden Lady.
That was Kurt Elling with Golden Lady. As I said earlier, my Business Shaper I am very pleased to say is Nigel Birrell. Hello and welcome, thank you for coming.
Nigel Birrell
Elliot thank you for having me.
Elliot Moss
Now you, you sometimes say I keep this quiet, you were a lawyer, you are a lawyer, I mean a qualified lawyer and here you are now as a CEO of a major company having done incredibly big jobs and big mergers on other companies too. At what point did you know you didn’t want to follow the traditional private practice lawyer route? When did you suddenly go there’s more to life than this?
Nigel Birrell
You are right you said lawyers didn’t always have the best reputation and I think that fortunately they were superseded by bankers which I became one of those as well but no I trained as a lawyer, I did a Law Degree and did Law School and all the rest of it and did my articles in the City which is now traineeship I think. I was half way through that I think I realised that actually, it was during a deal we were actually doing with a company called St Ive’s Group buying Riverside Press and the bankers seemed to go off to the wine bar with the client afterwards and we were sent back to the office to draft the contract overnight and have it on the banker’s desk by 9.00 o’clock in the morning next morning so I thought well I’ll give banking a go that seems a bit more fun than drafting documents all night so that’s kind of where it went from and actually now I was qualified I thought well if it doesn’t work out I can go back and become a lawyer so I moved off into investment banking pretty much two days after I qualified actually so.
Elliot Moss
And did you find that you knew enough to make it work because again people, I mean being a lawyer is one thing, being an investment banker I would have thought quite a different proposition? I mean was it just quick, you are a quick learner and you got it or you just found actually this was much more you than being a lawyer?
Nigel Birrell
Well it was difficult. You had some advantages of being a lawyer on the documentation side and the rest of it but clearly I think accountants made more natural bankers when they first came in because they are much more numerative. Not saying we weren’t numerative, I wasn’t numerative but it was knowing how balance sheets work and profit/loss accounts work and the rest of it so that was a bit of a learning curve to be honest but then I had great people around me, great mentors above me so it kind of worked from there really.
Elliot Moss
And then in terms of now I am going to jump forward to right now, you are now running a big business.
Nigel Birrell
Yep.
Elliot Moss
Being a CEO of a business and being a Director of that business is a very different set of responsibilities, a very different skill set. At what point again did you think I fancy that?
Nigel Birrell
Well doing just over a decade in the City, investment banking I got a little bit weary of it to be honest with you, in fact my last two years I was doing more marketing than deals and I quite liked the buzz of the deals to be honest and I was doing 160 odd flights a year up to glorious places like Helsinki and Stockholm for the day so you know a few hours’ sleep, back off you go again and I thought there has got to be more to life than that. It was pure chance that I ended up in a PLC because a friend of mine was a head hunter and I had mentioned my sort of desire perhaps to move out at some point in the future and he said ‘go and talk to this little company’ – near here actually in the Soho area – ‘it is quite small but they are looking for a banker or a lawyer and you seem to be both’ so I said, well being a bit arrogant at the time you know, ‘it’s a bit small for me, I don’t think I could do that’ but anyway I went to have lunch with a chap called Peter Orton who was the Founder of this business called Hit Entertainment and I subsequently discovered years later that he is the world’s greatest salesman so had I know now what I knew then, it might be slightly different but he sold me the job on the spot pretty much and I jumped out of banking and went into industry as they say.
Elliot Moss
And we’ll come back to lots more from you in a minute but just for those of you who don’t know, Hit Entertainment had the following different brands underneath them; Thomas the Tank Engine, Guinness World Records, Art Attack, Sooty – we all love a bit of Sooty – Fireman Sam – one of my first child’s favourites – and Pingu – I still want to talk like Pingu. How did you morph from that role into the next role because how many years did you spend with Hit?
Nigel Birrell
Hit was about 6 or 7 years but we got to a stage, unfortunately Peter developed cancer and basically wanted to sell the business so we were talking to all the usual suspects like Disney and Warner and these sort of people and we eventually sold it funnily enough to a private equity group called Apax for about 1.1 billion in the summer of 2005 and I was actually at the cricket at Lourdes with a former colleague of mine who had just floated Party Gaming on the London Stock Exchange in June of ’05 for 4 billion pounds which I think was the largest float for 4 or 5 years and get a market cap greater than BA and all the rest of it and I was just joking about wouldn’t it be great to go and work for a company like that down in the sunshine of Gibraltar and the rest of it. It was literally just a bit of a joke and he went down to visit Gibraltar the following week actually to sort of post-IPA wrap up of things you could improve with a chap called Chris Treneman and the CEO and CFO of Party Gaming who I subsequently found out both knew me quite well, said they were looking for a deal guy, someone to use that new listing and go and actually acquire lots of other companies, you know, the William Hills, the Ladbrokes or whatever and the CFO at that time, a guy Martin Weigold had been CFO of Fox Kids Europe who are known through the industry and he said ‘do you think he might be available’ and so then both summoned me down to come down for a quick interview and that was an interesting experience because I had to leave at 4.00 in the morning and in a pitch black bedroom picked out my thickest wool suit without realising it and I of course arrive in Gibraltar and it is about 32° centigrade with double cuffs and cufflinks and the rest of it. So that was slightly unpleasant but yeah it was great fun.
Elliot Moss
And thinking about the world of children’s entertainment, then moving into gambling, at some point does it not really matter what the sector is or was there a sense of, what I mean by that is the skills that you have to develop as a deal guy, someone going into acquiring businesses…
Nigel Birrell
Yeah.
Elliot Moss
…is it much more about just pure economics?
Nigel Birrell
The deal guy you are doing a deal and it is a question of what does 2 and 2 make 5 I think but in terms of a business guy, you are selling a product and whether it is a you know, DVD for Bob the Builder or whether it’s a ticket to the Powerball Lottery in the US, it’s the same sort of principal really, just different market, different audience of course but it was quite interesting because you know just going from sort of entertaining and educating children to online gaming was a bit of a stretch and maybe not one the wife used to talk about so often to the friends and stuff like that.
Elliot Moss
And in terms of those early days when you started to acquiring companies, was that… it sounded like that buzz that you mentioned, did that buzz come back?
Nigel Birrell
Yeah absolutely and going back to Hit and Peter Ormes Sure Vision we had one fantastic product called Bob the Builder which was knocking, you know knocking the ball out the park and he was worried it might be a fad therefore he wanted to use our high P rating at the time to use our shares to go and acquire other properties to create a broad portfolio which in hindsight was a great decision because Bob did slightly come off the boil.
Elliot Moss
As everything does.
Nigel Birrell
As everything does, it has its moment but we acquired some other properties and you mentioned a few earlier but Thomas the Tank Engine is a great example of something that has been around for you know, 80 odd years and still is going from strength to strength so we needed properties like that for this portfolio so you had to have a logic behind what you were doing but dealing with the rights of some of these properties you know the Awdry Family, the Reverend William Awdry who created Thomas, they had an interest in the business so you had to go and deal with them as well as dealing with the corporate guys in the suits who actually own the business behind the main rights so it was… yeah very interesting in theory and in gaming, moving on to gaming. Exactly the same thing you know, you are dealing with, it is the buzz of the deal I think I really enjoy yeah.
Elliot Moss
And in terms of those first few deals that you did once you were in place, I mean obviously the interview went well and it was easy because they said… was it I mean when they found you did they say why they wanted you?
Nigel Birrell
Well subsequently potentially but I think what was the big shock for me was rather than being an advisor being actually the principal you are left holding the deal at the end of the deal so whereas an advisor rides in and gets his cheque and walks off and perhaps looks at the next deal for you, you’ve actually got to then integrate that business and make it work and the buck stops at you but it doesn’t so that’s what I found attractive about the job actually. You are not just being… doing the deal, you are actually then going to make it work within the company, integrating the people you know, making the savings if you have to do that.
Elliot Moss
And you like? That first time to integrate…
Nigel Birrell
Yeah, yeah.
Elliot Moss
…and what was it that appealed?
Nigel Birrell
It was just seeing the job through to the end really and creating something, making 2 and 2 make 5 literally. So you bring in Thomas the Tank Engine the business, we closed down the head office of that company which was based down in Southampton, we brought those people who were prepared to move and we wanted to move up to London, made a lot of savings through that but running the Thomas infrastructure through the infrastructure we already had and then creating that and making that even strong in America where we had a good footprint as well. So yeah, taking it from day one where you are trying to convince someone to sell you the thing to actually putting it into operation and seeing you know, the benefits at the end of it.
Elliot Moss
Stay with me for more from my guest Nigel Birrell, he’s coming back in a couple of minutes but first we are going to hear some words of advice for your business from our programme partners at Mishcon de Reya.
There are many ways for you to enjoy all our former Jazz Shapers and indeed to hear this programme again. You can ask Alexa to play Jazz Shapers and there you can hear many of the recent shows or if you pop Jazz and Shapers into iTunes or your preferred podcast platform, you can enjoy the full archive there to but back to today’s guest it’s Nigel Birrell, he is the Group CEO at Lottoland, the fastest growing online lottery provider – I keep saying that. Tell me about the business you are in now and tell me about the role, I mean you have come through it almost feels like Nigel, that you’ve had three or four really fantastic slabs of experience which keep building up to this inevitable position where you are running every part of the business, whether its acquisitions, whether its systems, whatever it might be and obviously marketing and so on and so forth. What’s it like being the top, top, top guy?
Nigel Birrell
Well it’s great, I mean we have a fantastic company it has only been going about 5 years and it is going from strength to strength, lots of young, vibrant, enthusiastic employees around the world who are you know, taking the business to the next level so the job is very easy really, just sort of helping to marshal those guys to you know, to keep the growth going.
Elliot Moss
Is it really though? I mean this is a big business?
Nigel Birrell
It is a big business.
Elliot Moss
You are making it sound pretty straight forward.
Nigel Birrell
It was established before I, in a small way, before I joined it. It was founded in Germany and then moved to the UK and then moved to Gibraltar and then it really started cracking on. I actually met the, one of the founders in the middle of 2013 and he was looking for some advice and he said could I come and join him and sort of help him you know, take it to the next level and I became a Non-executive Director for a few months and then I think I assume he appreciated the advice because he started to ask me to take a bigger role in the business and then that kind of morphed into the CEO role but yeah we were pretty small then and you know we’ve taken it to a much higher level now but it is basically about the product, the product sells itself, it’s allowing you to play the lottery round the world without actually being in the country where that lottery is so I think it very much as lottery tourism. In fact one of the Founders, his idea of it was because he used to have nephews and nieces he used to buy lottery tickets for Christmas for them, he lived in Munich in Bavaria and didn’t have a very big high jackpots in that lottery, he used to drive over the border into Austria to buy tickets for the Euro Jackpot which had much bigger jackpots and I think he thought well why don’t we set this up and allow people to buy tickets elsewhere so right now we offer around about 30 of the biggest lotteries in the in the world and basically you as a British guy who wants to play the Powerball in the US normally you would have to go to the US to buy that ticket. What we do is offer you that ticket through us. You are actually betting against us so if your numbers come up and you get exact same numbers that win the actual jackpot that week, we pay you, not the lottery and we insure that through a number of insurance products including an ILS which is an Insurance Linked Security or cap bond which we have 120 million Euro cap bond. So basically you can, any day or time, day or night you can buy a ticket with us for the forthcoming jackpot and win with us.
Elliot Moss
So you are hoping nobody wins?
Nigel Birrell
Well we like winners actually to be honest because that sort of validates the model because we have our detractors in the market clearly some you know, State monopolies aren’t very keen with us because we are competition, we are a disrupter. One of their great criticisms is these guys are making it all up and they haven’t got any winners and if they did have a winner they wouldn’t be able to pay them.
Elliot Moss
But you can.
Nigel Birrell
So we can and we proved that particularly in June last year, you mentioned in the introduction you know we had a 90 million Euro winner which was lovely and she was an early 30s lady on benefits, a cleaner from Berlin you know, so these are the stuff dreams are made of really and even then some of our competitors in Germany were saying this was all a bit of a, bit of a you know, show, they don’t really exist so we did lots of affidavits and things like that and the Guinness World Record sort of seal of approval if you like, they had to do an awful lot of due diligence on this so we were very keen to get that to prove that we actually not only this was a winner, we’d paid her and all the rest of it so yeah.
Elliot Moss
It sounds like you don’t really mind the detractors though, you… it looks like there is a bit of relish in your eyes…
Nigel Birrell
Yeah.
Elliot Moss
…in the sense that you know what, bring it on. You’ve got this really strong product. It sounds like technology is critical in this?
Nigel Birrell
Yeah. Well no publicity is bad publicity as they say so yeah, the more people talk about it, the more people say oh what is this Lottoland thing, let’s get on and have a go at that but technology is key so we, we try to innovate. That’s our great mantre really, it’s taking the sort of fairly old fashioned State lotteries and bringing new products. So we have got products where you can double your jackpot, you can protect your numbers if someone else wins. I could think of nothing worse than seeing your numbers come up on the TV for a 100 million jackpot and find out there were 10,000 winners. So we can do that and protect that so you get the whole jackpot. You know we tell you when you win so you don’t have to worry about losing your ticket or something like that or you’ve read about the stories of people washing them in the washing machine and things. So it’s about innovation. We use our insurance product now as well to deliver our own products so say Euro Millions jackpot hits 185 million, it resets at 15 the following week and everyone is quite bored of that. People want 100 million, that’s what really gets people to, to play on the site so we will then bring up our jackpot of 100 million that week matching the Euro Millions numbers, whereas the Euro Millions is only 15 million. So we can bring our own products in and give people what they want which is the ability to win life changing amounts of money albeit at very long odds but they, you know, it’s all about dreaming and as one of my colleagues said you know, he often didn’t really want to know the results because it was all about dreaming that he might win rather than actually finding out that he hadn’t won. So it is all about that.
Elliot Moss
I want to ask you, we talked about it briefly, the whole reputational thing. Again when you went to Law School they didn’t talk to you about that, when you went through all the various roles you went through in investment banking, obviously you see other people dealing with stuff in the media. That’s now on your desk. Do you find that you have had to reconfigure the way you look at things because you are now looking through the lens, the optics of how people might view (a) the world of gambling (b) this Gibraltar based business (c) just making stuff up – I mean you must see the whole gamete of things and if so how have you learnt how to deal with that bit?
Nigel Birrell
Yeah well reputation is key as you know and you’ve got to sometimes sacrifice profit to make sure the reputation is there and one of the jobs of the CEO I think is making sure the rest of the people below you know that. It’s not about necessarily maximising the profit if you are going to do it at the expense of someone. So gambling is particularly in the news a lot lately for responsible gambling which is kind of the mantra we have signed up to but the last thing we want is any of our customers having a problem. The good news in lottery it’s kind of a, I don’t even think it’s gambling, it is more sort of a gaming type thing. People don’t necessarily expect to win, it’s more an aspirational thing as I mentioned earlier but you’ve still got to be careful that no one gets addicted to it and a lot of the big companies in the UK, Fake It, Face 17.00 unclear in particular have been in the news a lot lately so it is all about that reputation. One thing we don’t want is a headline of someone who has stolen money from their boss and started using that money to buy lottery tickets with us so it’s a lot about verification of your customers, knowing who they are, making sure they don’t have a problem, knowing your VIPs. So any small error there might lead to a black mark against the company and that will be terrible for us and take it from another angle, when we talked about the big pay out that we did in Germany for 90 million, paying and paying fast is key as well. So we don’t want any bad reputation that we don’t do that. So that’s why we brought in this Insurance Linked Security which is a fully collateralised product which basically means that we can call on the cash immediately providing…
Elliot Moss
Your liquid basically.
Nigel Birrell
…correct. So the institutions have put money in there have given the collateral letter of credit or something so that we can actually call as soon as an accountancy firm, in our case, PWC verify the numbers are correct and they are properly…
Elliot Moss
They send the money
Nigel Birrell
…the money is there it’s gone. So we pay probably quicker than the State lotteries actually.
Elliot Moss
And to make all this, and people listening will be going oh collateralised thing over here and it sounds already too complicated, obviously it’s your world. In terms of people, it must be critical that you hire fantastic people because this is a big and slick operation. From that perspective, (a) I am assuming they are very good but (b) from a management point of view how would they describe you? What kind of characteristics do you bring to that leadership role?
Nigel Birrell
Yeah well they are good and the great thing about being in Gibraltar actually was that we have 3,500 people in the gaming industry in Gibraltar, it is the biggest industry in the private sector so you’ve got… and companies have been around for many, many more years than us so we’ve got some very experienced people we can hire and it’s not just for Gibraltar, we’ll bring people in from outside there as well. The second part of the question, what do they think of me, I think they think I am a good collaborative person, I am very much a team player, I’ve always been interested in team sports rather than individual sports and it is trying to make the collective the strongest we can possibly be and trying to inspire and mentor people to come to the next level.
Elliot Moss
And if you have doubts, because Nigel like anyone else has doubts about what they are doing and whether it’s right, however smart they are and however much experience they’ve got – how do you manage that?
Nigel Birrell
Well I have doubts about people all the time because you sometimes…
Elliot Moss
But I mean about, about decisions you need to make? What happens then?
Nigel Birrell
Oh I’ve got some senior colleagues who fortunately I have been lucky to be in gaming now for 14 years and many of the senior colleagues around me have worked with me before and one of the great things when you have done that for a while, you know how good people are so you try and get the best people around you, Jack Welsh actually said the first thing he did was hire a top HR person and then put the best people around him. Some people are frightened of hiring people who are cleverer than them, certainly not me I think it is much better to have people who are good and that’s key to it. Have a great team.
Elliot Moss
Stay with me for my final chat with Nigel plus we will be playing a track from Ray Charles, that’s all coming up in just a moment, don’t go anywhere.
That was Ray Charles with Georgia On My Mind. I’ve got Nigel Birrell just for a few minutes. I mentioned the question around doubt and you said, and I think you very astutely, well I just surround myself with great people. What about stress? You strike me as a very relaxed person, I mean you are obviously focussed but it looks like you know how to also switch off. Has that been something you’ve learnt over the years or has that been something that you always had? Because people often look at CEOs of businesses and Directors and Shareholders, you know Senior Big Shareholders and they go how do they do it? How do they cope with that level of responsibility?
Nigel Birrell
Nobody really knows how people perceive you but I’ve always felt reasonably relaxed and laid back about things and I mean living and working in the Mediterranean probably helps that, you know, the sort of manana approach.
Elliot Moss
He looks very healthy. Horribly, annoyingly.
Nigel Birrell
But no, so I think you stress out it’s not going to help much you have just got to deal with the problem and move on I think that’s the key and don’t look back and I think that’s the key. Don’t let something you know, fester away. An old boss of mine named Jim Ryan used to say bad news doesn’t get better with age. So literally deal with it and move on and then if you get rid of these problems, however you deal with them, then you can’t… they can’t fester away and stress you out.
Elliot Moss
And where are things going to go for you Nigel in this business over the next few years because it is an ambitious business, it’s growing fast. What happens in the next chapter?
Nigel Birrell
Yeah. Well it’s privately owned and obviously our owners will want an exit at some point or partial exit so I think the next chapter will be an IPO probably or a sale of the company. Definitely not looking to sell particularly but people knock on your door from time to time but probably an IPO in London within the next couple of years I think is probably the most likely outcome.
Elliot Moss
And the one thing I always ask people about is the money bit because often I meet all sorts of people and people who are driven by different things and it is rarely just the money but it must be a big part of what you do is that there is going to be upside for you at some point?
Nigel Birrell
Yeah I am not a major owner of the business actually but I will get upside clearly if we do an IPO or some sort of liquidity event. That isn’t the great driver, I just enjoy doing what I do and have a lot of fun doing it and I think you know, with setting up a great business and building it very quickly so I think that’s more the fun really.
Elliot Moss
He’s got a smile on his face at this point by the way. He is telling the truth I can tell. I can do my lie detectors here. It is really good to hear and it is clear that obviously you are doing a really good job. Thank you for your time. Good luck with whatever happens next, sale, IPO or whatever or just more of the same.
Nigel Birrell
The whole things fine.
Elliot Moss
I am sure that’s fine as well. Just before I let you go, what’s your song choice and why have you chosen it?
Nigel Birrell
Well I have chosen Black White Rag by Winifred Atwell and I was thinking about why to choose this song and I happened to be at Glen Eagles Hotel last Monday night and I hadn’t been there for 40 years, the last time I had been there was with my late father and we had played snooker into the night and he used to always watch Pot Black in the 80s on BBC2. Something I could never quite work out because I always thought it rather boring actually and this was the theme tune for Pot Black so it is happy memories of time spent with my father. So I think that’s why I have chosen it.