The iGaming industry is rapidly evolving from all angles, with changes such as new laws, EU directives, emerging jurisdictions, technological developments and consolidation shaking up the industry as a whole and as a result, changing the rules of the game.
Increased barriers to entry
For starters, barriers to entry are growing higher as margins are being squeezed – so much so that if you are planning on entering or perhaps even remaining competitive within the industry, it is imperative to remain ahead of the game, knowing your market inside-out, thinking innovatively and using new trends to your advantage, in order to enable you to stand out and differentiate yourself.
New laws and regulations
With more jurisdictions jumping on the bandwagon and determined to regulate and raise revenue, compliant operators inevitably will feel the pinch to their bottom lines which is likely to be reflected in lower odds, less attractive bonuses and higher rakes – all of which non-compliant operators pick up on, and, in theory, offer a more profitable return to its players. It is fundamental that new rules are policed and that authorities remain vigilant. The new regime in the UK whereby the existing remote gaming, betting and pool betting duty rates of 15% are now applied on a point of consumption basis begs the question as to whether an underground market will expand, wherein unlicensed entities will be in a better position to offer a more appealing opportunity to its players.
Player Retention over Acquisition
Concurrently, speculation is rife as to whether sign up bonuses' may be reeled in as a means of cutting marketing costs, which is a further instance illustrating how the industry has been and will continue shifting focus from player acquisition to player retention. Free bets will begin to change from big hand outs to cleverly capped sure bets in order to draw in customers. As a result, affiliates will also feel the pinch, unless they too roll with the times and adapt to suit their partners' market strategies. Yet, the trouble with generalising lies in 'game theory': Sign up bonuses are one of the major differentiators between land-based and online operators, and between competing remote gaming entities which are becoming ever more homogeneous in a market that lacks loyalty. Should all operators reduce their sign up bonuses, it would be a matter of time until an operator digs into its pockets and attempts to capture the market with a more attractive offering.
With increasing consolidation in the industry, one cannot help but wonder what the playing field will look like in the coming years. Competition has been cut-throat across the globe, with the big fish taking advantage of their liquidity to acquire competitors to further secure their position and strengthen barriers to entry. Similarly, many B2B game suppliers may well expand into the B2C market through major acquisitions.
Gaming up for Millennial generation
As more fragmented companies conglomerate and merge, are we to expect less focus on innovation? While the industry is synonymous with innovation, I would like to see the manner in which games are going to evolve. Doubtlessly the human mind is hard-coded to feel drawn to playing classic games such as Roulette and Black Jack. But will such games entice the millennial generation? Such highly optimistic individuals who have grown up playing games and expect more of an immersive, rewarding experience in return for their time are easily distracted. To my mind skill games coupled with social gaming and elements of gamification, such as loyalty programs, and intricate game designs combined with behavioural economics through the use of Big Data – will prove to be the predominant force in gaming for the future generation and dare I say, for all industries in the years to come.
Naturally, the new "gamified" generation will not only constitute your client base, but will also form part of your workforce. Management will need to adapt their skill set to attract millennials in order to maximise their extraordinary ability at problem-solving, organising matters out of chaos, multitasking and being self-directed leaders thriving on a diet of continuous positive reinforcement. Corporations that meet the needs of the highly fluid generation will be able to crush their competition, as the effect will be reaped from both an inside-out and an outside-in perspectives.
Mix and Match
Last, but not least, due to increasing regulation in television marketing, social platforms have become one of the TV media's go-to marketing channels. On that note though, the industry has come to realise that social gaming is not synonymous with hard-core money gambling despite the initial appeal back in 2012. When a bet is placed, a return on investment is anticipated, but when a deposit is made on a game that is not perceived to be gambling-oriented, players tend to be satisfied with sheer entertainment in return. The trick will be for the industry to combine the gold-rush with the fun-seeking aspects and that is what I reckon will prove to be another key to customer retention. It will not be a matter of simply marrying the two, but customising them to amalgamate the offering and tap into the right target market.
As the rules of the game transform into nuances of every colour, one thing is clear: Successful industry operators are tying up their shoe laces to go with their best suits. May the best man win.
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