iGB Live! Online: Day two round-up

16 July 2020

The focus of the second day of iGB Live! Online shifted to B2B, with speakers including H2 Gambling Capital’s Ed Birkin, SKS365 chief Alexander Martin and Better Collective CEO Jesper Søgaard.

The day began with H2’s Ed Birkin analysing the impact of novel coronavirus (Covid-19) on the sports betting vertical.

While a full run-down of that session is available here, Birkin revealed that iGB’s principal data partner forecasts a 10% decline of interactive betting gross revenue from H2’s pre-pandemic forecasts for the year. This decline is likely to be more pronounced for land-based as a result of shop and casino closures, with revenue for the channel now expected to come in 30% below original projections.

Birkin noted that there is a significant difference between sports betting and horse racing activity. Some form of horse racing activity continued throughout the lockdown, often behind closed doors, and therefore interactive racing GGR is only down 4% compared to H2’s initial forecast, whereas interactive sports betting GGR is down 16%.

For the nascent US market, he said that while there had been a pronounced impact in March - at a time when the National Collegiate Athletics Association’s (NCAA) March Madness basketball tournament usually takes place - the effects since were less severe. April, May, June and July are traditionally quieter months in the US sporting calendar, which means the impact has been a lot lower than it otherwise might have been.

When the National Football League (NFL) season kicks off in September, H2 still expects there to be some impact from the pandemic, as the size and scale of the market is constantly changing as state after state regulates the vertical, this will still allow for strong year-on-year growth.

“We couldn’t hand them a Playstation”
In a session titled, ‘The consumer response: retail and live sports shutdown’, Ivan Liashenko (pictured), chief marketing officer at Parimatch, discussed methods of retaining existing customers and keeping them engaged during the lockdown period.

Liashenko said the main problem Parimatch faced was finding a way to ensure its customers would come back to the site even when there were almost no live sports on offer.

“Of course, just like everyone else, we weren’t fully ready for what happened, but we tried to do our best,” Liashenko said. “The first problem we faced was customer retention. When there’s no sports events it’s hard to make players stay.”

However, the Parimatch CMO said that matches played on popular video game Fifa proved to be an effective retention tool as customers enjoyed the familiarity offered by playing as real teams. 

“We work with local influencers in all of our countries and we tried to ask some celebrities to play,” he said. “We took some football players from big football clubs, which was a bit of a problem because they were of course in quarantine. We couldn’t hand them a Playstation, we had to leave it at the door and we couldn’t help install it.”

Esports, he said, also kept customers coming back and have held steady in popularity even as traditional sports return.

Liashenko added that producing a regular podcast helped too, as not only did this provide a reason for customers to visit the Parimatch website, but it also provided bettors more of a sense of community.

“It’s just 7-10 minutes and kept customers up to date about our betting offering and importantly let our customers know that other people were betting too,” Liashenko continued. 

“When you’re all on your own it’s easy to think 'Nobody else is watching these matches; nobody else is betting' but we tried to recreate the atmosphere of a betting shop through podcasts.”

Lessons learned from Italy
Next up was Alexander Martin, CEO of SKS365, who recounted how lockdown impacted business in Italy, as well as sharing how he believed it would shape the operator’s future.

The first point Martin covered was how the ongoing pandemic impacted SKS365 and its brand, Planetwin365, which runs around 1,000 betting shops in Italy.

Due to the large scale outbreak in northern Italy, Martin explained that the company had a first glimpse at what was to come in lockdown. Initially, the impact of the Italian government announcing the closure of all shops on March 8 was limited, with only a decline of 40% in turnover. By the second week, however, the estate saw a 70% decline.

As a result, igaming then saw significant growth in Italy - Martin noted that total GGR was 20% up year-on-year across all operators, primarily driven by online casinos. Conversely, sportsbook GGR was down 50%.

SKS365 actively continued to invest in products, as well as customer and people experience, Martin continued. The company continued to grow its online casino product, and enriched its live dealer offering. By offering table games broadcasted from land-based casinos, Martin explained they were able to emulate a live, land-based experience.

“All improvements resulted in the steady growth of casino, even during the lockdown, and achieved a year-on-year uplift on our online casino GGR of more than 50%,” he said.

Despite retail outlets remaining closed, Martin said the company had continued to invest in betting shops, adding essential measures to allow them to be active as soon as possible.

He then rounded off the session with his view of the future, and what the lasting impacts will be from the pandemic.

A study in Italy saw 10% of its land-based customers opening an online gambling account for the first time, he noted.

“That is something certainly that will be continuing, and online will [represent] a bigger percentage of the overall gambling market in the future,” Martin said.

With the future uncertain, he goes on to recommend continued investment in areas less impacted by social distancing, such as esports and virtual gaming, as well as those with social opportunities: “As we have seen a revival in poker, we will continue to offer product formats that allow physical distancing, but enable social gatherings - including games that include chats, voice and even video interactions between players.”

Finally, he said, SKS365 will continue to invest in its omnichannel strategy, highlighting the importance of the customer’s ability to play in a format best suited to their personal preference and environment.

The importance of a light touch
The day’s content concluded with Better Collective chief executive Jesper Søgaard discussing the value of licensing in the affiliate sector. He said a model similar to those in New Jersey or Romania, designed to give operators legal certainty over who they work with, and to ensure regulators have oversight of who is active in a territory, would be preferable.

While Søgaard admitted to some dissatisfaction with elements of the New Jersey model - outlined in full here - he said that ultimately affiliate licensing appeared to increasingly inevitable as regulations tightened in European jurisdictions.

This, he argued, made it vital for affiliates to be in dialogue with regulators, in order to play a role in shaping regulations rather than being hit with restrictive and unviable controls.

iGB Live! Online is now finished, but all sessions are available to watch on demand. Register here to re-watch the two days' content.

The physical event is also coming up, taking place at the RAI in Amsterdam over 22 to 25 September.