Heffer family’s incredible journey of KZN betting company that went to Hollywood

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I’ve been eagerly awaiting this interview for some time, having watched the Heffer family develop the small horseracing form guide Winning Form into the 6,000-plus staffed giant HollywoodBets. A formidable brand, the company has naming rights on four major racecourses in South Africa; and many of its top races, including the most famous of all, the Durban July. Also, HollywoodBets sponsors its hometown Sharks Rugby and Dolphins Cricket and the Durban stadiums where they play, plus Dundalk Racecourse in Ireland and, the highest profile of all, English Premier League team Brentford FC. Its Hollywood Syndicates reinvest heavily in SA’s racing industry, keeping over a hundred horses in training. This interview with Devin Heffer brings together this inspirational story’s threads that go back to a small entrepreneur, his father Owen, whose disruptive endeavours delivered the dream result. – Alec Hogg

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Timestamps Below

00:06 – Introductions

01:02 – Devin Heffer on if the Rugby World Cup has created a boom for sports betting

02:02 – On what ‘Biggest Hold Ever’ means

02:40 – On if they’re primarily a South African business

03:57 – On operating in KZN

06:23 – The relationship with the informal sector

07:58 – On his father Owen Heffer and converting from being a small form guide into this giant business that Hollywood Bits is today

12:09 – On growing up in the business

15:15 – Being involved in the sports industry 

21:22 – If the getting into the sports betting industry was difficult morally after coming from a catholic school

23:50 – His stance on the foreign interest in the company

25:39 – Conclusions

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Edited transcription of the interview with Devin Heffer of Hollywood Bets.

Alec Hogg: Let’s dive straight into business matters, Devin. How lucrative is betting on the Rugby World Cup for you?

Devin Heffer: All the buzz is about the Rugby World Cup. Checkers have been outstanding with their marketing, and the Springboks are performing exceptionally well. For us, it’s been a great start. There was a surge in betting on South Africa after their win against New Zealand in the warm-up games. We had a significant hold in the first game between New Zealand and France, making it our biggest ever for a rugby game. However, results haven’t consistently gone our way, but things will surely get more interesting as the tournament progresses.

Alec Hogg: Could you clarify what you mean by “your biggest hold ever”?

Devin Heffer: Certainly. By ‘hold,’ I mean the total amount wagered on a match. Since we started, this has been our largest hold on a rugby game, which is remarkable considering we’ve been involved in Rugby World Cup finals and various international games.

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Alec Hogg: Is HollywoodBets mainly a South African enterprise? You’ve recently expanded to sponsor international ventures as well.

Devin Heffer: We are primarily a South African business, originally hailing from Durban. Hollywood Betts has been around since the late ’90s, evolving from Winning Form, a racecard that dates back to the mid-’80s. Although we’ve branched out to Mozambique and have online operations in the UK and Ireland, most of our business is still in South Africa.

Alec Hogg: Betway, another major global brand in online betting, also has South African roots. Unlike them, you continue to operate largely in KZN. What sets the South African online betting scene apart?

Devin Heffer: The gambling industry has grown significantly in South Africa. The mid-2000s marked a surge in football betting, further amplified by the rise of mobile betting, which offered unparalleled accessibility. Around 2015-2016, integrating e-wallets and cardless banking opened the industry to even more people. We’ve been at the forefront regarding value-added services like top-up vouchers. Customers don’t need a bank or card; they can go to their local shop and purchase HollywoodBets vouchers from terminals like Flash or Kazang. This has been transformative.

The popularity of football betting has overshadowed horse racing. However, the onset of COVID-19 led to an increase in casino games, slots, and scratch cards, broadening the scope of our industry. The focus of marketing is now geared more towards casino betting, a booming sector. As data becomes cheaper, we expect to see even more engagement with various products, increasing Gross Gaming Revenue (GGR) and stakes.

Alec Hogg: Could you elaborate on the relationship with Kazang and how it integrates into the informal sector? For instance, if I place a bet through HollywoodBets, can I cash it out at a Kazang terminal?

Devin Heffer: Kazang and Flash terminals currently allow customers to top up their betting accounts, similar to buying mobile airtime. Once you’ve placed bets with Hollywood Bets and wish to withdraw your winnings, you have several options, including bank transfers, e-wallets, or visiting our retail branches. However, you can’t withdraw funds through these terminals at the moment, but it could be an avenue we explore in the future.

Alec Hogg: Accessibility is a compelling aspect. I’ve been following HollywoodBets closely, which followed naturally because my first publishing venture was in a similar field, Racing Digest, in the late 1980s. Your father, Owen, was a pioneer with Winning Form back then. So, how did you transition from a small form guide to the expansive business HollywoodBets is today?

Devin Heffer: It’s fascinating how the business has evolved. Initially, our focus was horse racing, which still holds a special place. My father, Owen, always identified more as a punter than a bookmaker, which set the tone for our customer-centric approach. The inspiration for the name “Hollywood” actually came from a trip to the Breeders’ Cup in 1997 at Hollywood Park, Los Angeles. The subsequent visit to Las Vegas shaped our ethos: to treat customers like royalty.

Our business ethos includes early opening hours to accommodate soccer betting enthusiasts and an extensive range of betting options. We’ve grown by focusing on the customer experience, setting us apart in the industry.

We wanted to revolutionise the South African bookmaking industry by creating a welcoming atmosphere starkly contrasting to the previously grim tote shops. This led to sweeping changes in retail betting; we now operate 98 branches across South Africa. While mobile and online betting dominate, our retail branches still play a critical role in customer trust.

Alec Hogg: Your father didn’t come from a privileged background, so there was no silver spoon in your mouth. Were you involved in the business from a young age?

Devin Heffer: I grew up with the business early, frequenting Greyville racecourse and following jockeys like Jeffrey Lloyd and Piere Strydom. However, I truly delved into it after finishing university. I studied sports science but realized it wasn’t my path. Instead, I started from the ground up, checking soccer sheets and ensuring teams’ names were spelt correctly, gradually learning about odds and betting. I worked my way up through our horse racing operations. Despite being a Heffer, I faced tougher scrutiny than others. That said, it’s been an excellent learning experience. I’m particularly impressed by how Owen grew the business, starting with just four rands in his pocket, selling tipping sheets outside Greyville Racecourse. His perseverance and tenacity have shaped our team of over 6,000 members and instilled in us the importance of hard work.

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Alec Hogg: Warren Buffett, a renowned investor, also started selling tip sheets at his local racecourse, Ak-Sar-Ben, in Omaha. It seems you’re following a proven path. So what’s your strategy, considering your marketing stretches from dominance in your home of KZN and through to an Irish racecourse?

Devin Heffer: Interestingly, we didn’t have a formal marketing team in the early days. Our approach began at the grassroots level. We focused on community engagement and charitable causes, which led to the establishment of the Hollywood Foundation. We then transitioned into sports sponsorships, starting with Dolphins Cricket in 2015. This incremental approach led us to Brentford Football Club. Its owner, Matthew Benham, shares similar values, particularly his data-driven approach to building a football team. Our partnership has been mutually beneficial, with both of us enjoying success and growth. It may appear as luck, but it results from seizing the right opportunities.

Alec Hogg: It’s an incredible story; you’ve played an active role in shaping it. You’ve also brought significant innovations to the industry.

Devin Heffer: Absolutely. Innovation and disruption have been part of our journey and remain central to our ongoing strategy.

Alec Hogg: Devin, I have a challenging final question for you. You attended Marist Brothers, specifically St. Henry’s Marist Brothers. Considering it’s a Catholic school, how would the Brothers who taught you feel about your family’s prominence in the betting industry? Do you see this as a complex moral question?

Devin Heffer: It’s a complex issue that often comes up. My brothers and I attended Marist Brothers for 12 years each, from start to finish. It’s a fantastic school that has since become co-educational and dropped ‘brothers’ from its name. Regarding the moral question, I think asking them for their thoughts is best. However, I believe that the charitable work HollywoodBets does might overshadow other considerations. We’re a regulated, legal entity that significantly contributes to our communities. That’s our focus.

Alec Hogg: Considering HollywoodBets’ success, have you received any acquisition offers from larger international companies?

Devin Heffer: We frequently get asked about going public or selling, but it’s not part of our game plan. Unlike companies that rely on shareholders ‘ investments, we’ve built our business on our terms, using our resources. Our business’s cultural and traditional aspects are crucial to us and our 6,227 team members. It’s not just about money; it’s about the communities and families that depend on us. We’re doing well and continuing to grow and are content to maintain control over our destiny.

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