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In the first of a three-part series, industry experts predict the opportunities, challenges, technological advances, new markets, crossovers, ICOs and consolidations that igaming can expect in 2018
Joe Saumarez Smith, chairman, Bede Gaming
In the UK the Gambling Commission (GC) will remove an operator’s licence in the first half of 2018. It may be that several licences are rescinded. The regulatory warnings have been getting tougher and tougher and it is only a matter of time before a company loses its licence.
Across Europe, governments and regulators will force operators to pay a percentage of their gross win towards responsible gambling policies. The days of voluntary contributions are numbered, which has partly been because some operators have been shirking their moral responsibility but also because governments have failed to fund treatment programmes from their substantial gambling tax receipts.
Unless there is a stock market crash (sparked when Bitcoin crashes from its peak of $35,000?), it is hard to believe that there won’t be a lot more M&A in online gambling. Money is cheap and the markets want to see scale. Organic growth seems to be slowing, so acquisition is the way that executives can keep their shareholders happy. I’d expect to see William Hill in play, and Betfair Paddy Power buying an online casino operator.
It’s been a long time since gaming executives have been prosecuted for operating in dark grey markets. Will Turkey, Japan, Malaysia or Japan go after the numerous companies operating in their countries?
This may well be the year that the federal law on sports betting in the US is changed. There have been so many false dawns over the years that all I will say is that even if it does get passed, the day you can place a sports bet online in the majority of states is still going to be a long way off.
Shimon Akad, COO, Playtech
As I predicted last year we have seen a flurry of new in-house content because it is faster and easier to create games than ever before. However, brands demand differentiation.
We have been working on various initiatives that will reinvent the way content is developed, discovered, configured and delivered seamlessly across all channels – rapidly, cost-effectively and without affecting existing performance. And, in fact, also significantly increasing revenue.
The use of data-driven machine learning and AI will become more prevalent across the industry, to drive retention rates and maximise ROI.
Continuing and reinforcing the trend of the last few years, an increasing number of land-based operators are becoming, or seeking to become, leading online operators. Meanwhile, several pure online operators are seeking to enhance their retail presence and leverage it back into their online offering. This largely sports-led trend will become more material with casino, slot halls and bingo operators taking on omnichannel projects.
Regulation is rapidly becoming a more material part of any and every gaming operation and an increasing number of operators are working hard to increase their quality of regulated earnings. This new regulatory landscape means we can expect an ever-changing environment of new rules and requirements and we’ll need the knowledge and experience of how to work and deliver results with challenging margins. Operators looking to expand need to learn to work in an omniterritory-regulatory reality.
To lead and stay ahead of the market regarding these criteria, operators need a strong platform that can deliver state-of-the-art content, flexibility, support in multiple jurisdictions, real-time data and smart AI with the capability to deliver a complete omnichannel offering. Operators settling for less will gradually lose market share, but operators aspiring for the best will become market leaders.
Rory Anderson, CEO, 12BET Europe
It will be a tough year in terms of player acquisition. This, combined with a greater understanding of machine learning, will mean a huge focus on CRM. Improvements we’ll see in retention will be across the board, and AI will be at the heart of it. We expect sophisticated reactivation techniques, plus new product features – adding layers, making the product stickier.
A rush of consolidation feels inevitable, triggered by the announcement of the reduction in the FOBT maximum stake. Time will tell if this opens a window of opportunity for nimble operators who are not too distracted by M&A activity to grow their market share.
Some operators are already seeing meaningful deposits in Bitcoin Cash and Ethereum. I can only see this gradual shift towards crypto gaining momentum.
A regulated US sports betting market looks a solid bet. There is real momentum gathering as New Jersey’s case is heard by the Supreme Court, with a ruling perhaps six months away. Professional leagues seem to be coming around to the idea, and there’s a growing acceptance that it’s better to regulate and monitor the industry. Fifteen states have already introduced or enacted legislation to approve sports betting if the federal ban is reversed. This could be the year.
Will Mace, head, Kindred Futures
Given that much less tends to change in the short term than one might assume – but that much more tends to change in the long term – I would not, in the context of 2018, predict an AI ‘revolution’, rather a steady growth in use cases of machine learning-driven applications (although the revolution is coming!).
Nor would I predict a significant shift in the role of VR or AR in the gambling industry, rather a steady growth of availability of gambling-related content and experiences in such mediums (although, similarly, a significant shift is coming).
Even if the MGA or other regulators do start allowing licence holders to accept cryptocurrencies in 2018, I don’t think there will be a huge rush to adopt them, at least not from the larger or more established operators – and at any rate the current (late 2017) volatility of the currencies makes holding them a far bigger gamble than betting on World Cup outcomes.
Applications for voice-powered devices, such as Alexa, Google Home and HomePod, will start to emerge and will become transactional rather than the PR stunts we have seen thus far. Messaging channels such as Facebook Messenger will also start to play a transactional role, particularly as Facebook seeks to stream more and more live sport. Operators and suppliers who are still coming to terms with what it means to be mobile first will find they are in danger of missing out on another paradigm shift.
Regulatory pressures and the ever-increasing compliance complexity – in conjunction with the much broader demands of the GDPR – will drive perhaps the biggest shifts of 2018, fundamentally changing the way operators interact with customers and perhaps (hopefully) we will even begin to see the end of the dull and slightly duplicitous bonus hegemony as a result, forcing the industry’s marketing and CRM teams to get properly creative in the ways they seek to acquire and retain customers.