Leadstar has been in the affiliate space since 2009 but the last six years has seen a rapid expansion from 3 to nearly 70 people and into 34 geos. Dan Kleiner caught up with CEO and co-founder Eskil Kvarnström to uncover the philosophy and strategy behind his fast-growing business and hear about its biggest challenges as it continues to scale
Leadstar will be a familiar name to those in the affiliate space. From its European sports betting comparison and content sites to newly launched US brands, it’s a company that’s certainly garnering recognition and raising its corporate profile and earlier this year was shortlisted for Best Sports Betting Affiliate in the iGB Affiliate Awards 2023.
The Swedish-based company has undergone a rapid transition from an established affiliate to a full-scale international affiliate business, and with that comes both challenges and opportunities. Leadstar actually started life back in 2009 with the launch of the first two sites, oddsbonusar.se and bookiesbonuses.com, in Sweden and the UK respectively.
“I was a professional poker player for a couple of years and that’s how I came into the industry,” says Eskil Kvarnström, CEO and co-founder. “My brother and his friend was also playing poker and we started a poker affiliate business in 2006. As full time poker players, we paid a lot in rake and we realised that there was a need of serious actors that could provide the service of paying back parts of this rake to players to specific poker sites.
"A couple of years later online poker was declining, and in 2009 me and a friend launched affiliate websites within sports betting instead. Which later became Leadstar Media.”
The two of them then found their third co-founder, a web developer who joined in 2012, and "it was just the three of us until 2017 when we brought in our first employee and then we started to build up the business.”
Expansion
The Leadstar team then expanded its range of brands as well as the size of the team. In those six years, the company has grown its number of brands considerably and is currently operating in 34 geographical gaming and gambling markets.
“Of course some of those markets and brands have more focus than others,” explains Kvarnström. “We have 62 domains and so some are not receiving as much love as others. Our goal is to give love to every portal, but that needs a bigger team so we can apply that extra focus.”
The biggest challenge that Leadstar faces is team expansion to match the growth of the business. Yet, when it comes to recruitment the Swedish-based affiliate does things a little differently – you won’t find them cherry-picking senior personnel from competitors. Instead, Leadstar prefers to bring in less experienced hires that it can educate into the company’s culture.
“We are 65 to 70 people right now,” says Kvarnström. “It’s come to a stage where we internally concentrate in how we build up as an organisation whilst maintaining our culture, which is very special with our company. We have only recruited new people for the product and account teams, which makes up 95% of our workers.”
This is something that the Leadstar co-founder and CEO believes makes the company unique among others in the affiliate space. “We are a company that has not recruited any senior people, so everyone is joining this industry fresh. They join with us teaching them everything we know, so we’re a kind of learning organisation because new recruits are dependent on us teaching them how to build up successful products.”
Kvarnström reveals that Leadstar also has to explain to new starters the ‘why’ behind the company. “They need to understand why we are building these products and the reasoning behind the services we offer,” he says.
One issue with only hiring fresh faces could be a lack of leaders in the company, but Kvarnström explains that Leadstar has a policy for this too. “Once they’ve settled into their role we also develop those with leadership qualities to become good leaders in their teams. It has to be done right though because everyone is new, even I’m new in the position I’m in relative to others in the industry. We just want to develop our team and keep this special humble atmosphere we’re very proud at Leadstar to have.”
Questioning the regulators
With so much internal focus on the team, another challenge is keeping up with all the regulation changes in the 34 geographical markets the company operates in. One such important market for Leadstar is Ontario, Canada, where the launch of regulated sports betting in April last year led to affiliates being banned from using inducements on their websites.
This meant that affiliate brands can no longer use words such as bonus, promotion and offer in content to convert players for operators.
“Canada is a really interesting market now,” explains Kvarnström. “For us the most important thing is to have a good relationship with operators because they are the ones giving us the most information on the situation and how we can adapt to being compliant.”
Kvarnström believes that certain regulations, like that applied by the Alcohol and Gaming Commission of Ontario (AGCO), should be questioned by affiliates and looked at in more detail.
“The negative from following the regulation in Ontario means that others who don’t follow the rules and choose not to be compliant will gain traffic and send their players onto non-licensed operators,” he explains.
“I think that sometimes regulators think too much about the short term and I really hope they’ll take on board considerations from affiliates when developing and changing regulatory frameworks.”
Leadstar secured its sports betting and internet gaming supplier licences in the state of Michigan in January 2023, which meant it now had all necessary licences in the US for its strategy. The affiliate launched two brands for the US markets, Sportsbooksonline.com and Unitedgamblers.com, which Kvarnström says gave the company an opportunity for greater research.
“Of course, entering the US markets takes a lot of time and money but it also requires a greater investment compared to entering new markets in European countries,” he explains. “We’re very focused right now in understanding the search behaviour of US citizens and the differences between different states.”
Platform innovation
Platform innovation can be a game changer for affiliates hoping to attract high-value players for operators especially in competitive markets. Leadstar is certainly an advocate for this, when conducted on the appropriate brand.
In October 2022, Leadstar incorporated a function on its brand Bettingstugan.se whereby players can test out football pool games directly on the site before deciding to go onto Svenska Spel, the state-owned gambling company that held a monopoly in Sweden until 2019, to place a real bet.
“In Sweden, football pool games are a very big part of the betting culture,” explains Kvarnström. “Svenska Spel have something called stryktipset where you place bets on 13 games being played, either a win or a draw.
“I think it’s important to have these kinds of new features on our sites that are more media and content-based as they massively help to bring in traffic. These are things that people want to try and play around with before actually going onto the betting sites. Those just looking for the best betting site or the best welcome offer will go to one of our comparison sites and quickly onto a provider so we don’t bring these features to those brands as there’s no need to complicate them.”
Brazilian competitors
One market Leadstar has been active in for some time is Brazil. Sitedeapostas.com offers Brazilian players a comparison of providers as well as tips on payments and Bonusdeapostas.com offers comparisons of the best legal bookmakers in the country.
“I think we were quite early entering into the Brazilian market,” says Kvarnström. “But in the last one or two years the market has grown massively and competition is fiercer. It puts more emphasis on us to have even better products and ensure we’re satisfying visitors to our sites.”
The online gaming market looked as if it was going to be legalised before outgoing president Jair Bolsonaro failed to sign the country’s sports betting regulations before the deadline at the end of 2022.
“I think the Brazil market will soon be regulated. We’re keen on operating in regulated and soon-to-be regulated markets where we can work within legal regulations as a company,” adds the Leadstar CEO.
Kvarnström also admits that Leadstar’s immediate focus isn’t on entering any new markets, but adds that it may be hard to resist some opportunities which could arise in 2023. Could an entry into Greece, for example, be on the cards for the Swedish-based affiliate? The CEO declines to answer, but if it fits within Leadstar’s strategy and model, you wouldn’t bet against the Swedish-based affiliate climbing the rankings there in the near future.