Foreign Exchange | Case Studies
How to create a Foreign Exchange and Risk Management strategy with Betcris, a Global Gaming Company
TV Global Enterprises Limited (TVGE), through its Betcris brand of Sportsbook, is a company that provides a safe and legal online platform for sports betting, via traditional and innovative channels. Betcris has been serving the Latin American sports gambling industry since 2006, making it one of the founding operators in the region. As it continues to grow and explore new areas that it can serve, the company constantly reviews its operations to ensure they are maximized to the fullest.
Operating a global business with a multitude of currencies and market risks.
A reduced payment receipt service and risk management strategy.
Reduced financial costs and better visibility on investments.
The Challenge: Operating a global business
Marketing and managing a business across multiple territories brings with it a host of challenges. There are language barriers and cultural differences for a start, but the need to move money around the world can often seem just as daunting. BetCris is an online sports betting company, which was founded in 2006. Domiciled in Malta, its main market currently is Latin America, but it is expanding globally. This entails a huge marketing push, with significant marketing budget allocated to advertising.
BetCris had no hedging strategy in place and were doing everything on the spot market. This meant they were vulnerable to the volatility of the currency markets with every transaction that took place. With the business expanding rapidly, this meant that the potential for losses against budgeted figures was increasing. It was a risky approach. Further to this, the incoming funds from revenues were handled by PSPs (Payment Service Providers), and as a result the banks handling the payments were charging high fees on incoming funds. This represented a significant ongoing cost to the business and one which was visibly increasing as the business grew.
What BetCris needed was a reduction in fixed costs and a way of being able to budget for their overseas marketing and operational expenditure, mitigating the risks of currency movements.
“Western Union was instrumental in taking out the guesswork of our marketing and business payments in different jurisdictions and currencies. Our financial costs have been significantly reduced and BetCris is less exposed to foreign exchange risk.”
-- Carla Capo, Head of Treasury Department
The Solution: Hedging provides control and certainty
The biggest immediate benefit that the Western Union Business Solutions team was able to provide was to introduce a reduced payment receipt service. With the reduction of fees on every incoming transaction, BetCris saw a dramatic improvement in revenues.
In order to address the company´s major concerns regarding currency volatility, the Western Union team worked closely with them to develop a risk management strategy. This would mean that the final cost for each marketing initiative would be fixed in advance and wasn’t subject to change, no matter what happened in the markets.
The Results: Cost savings and mitigated risks
BetCris have been delighted with the immediate cost savings on their incoming funds, and are already reaping the benefits of having an effective hedging strategy in place. Being able to budget accurately for the costs of marketing campaigns as well as operational expenditure, has meant a better ability to forecast and track return on investment. It takes a lot of the stress out of international payments, and saves time too, as there is no need to monitor exchange rates each day, trying to choose the best time to make a transaction. This leaves much more time to concentrate on the real work of growing the business.
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