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TEST OF CHARACTER
As Tim Poole approaches two years at Gambling Insider, he reflects on how the gaming sector has continually adapted to an ever-growing list of challenges
Our industry looks a lot different now from when I started at Gambling Insider two years ago. That’s true of any industry, of course, given the unprecedented circumstances facing the global economy during the coronavirus pandemic. But the overarching lesson I’ve learned about this sector so far is that it is extremely resilient – the perfect quality for facing this pandemic head on.
That’s why I’m completely unsurprised to have seen the gaming industry come together more than ever during this incredibly arduous time, rather than counterproductively dissipating into individual factions. With regulatory pressure, media scrutiny, and religious and ethical opposition practically written into the gaming sector’s DNA, dealing with external forces has become a well-practised industry habit.
Obviously, the current crisis – especially for land-based suppliers and operators – tops anything that has come before. To call overcoming it the industry’s Everest would be inappropriate, as summiting the world’s highest peak would bring a sense of achievement, joy and relief. Persevering beyond the COVID-19 pandemic in our case, however, is more about charging up an incline that never summits and never puts you in a position to stop, plant a flag and savour the view. As we’ve been reading about recently, those who slow down are quickly outpaced, and those who stop are soon forgotten.
In terms of sheer scale alone, though, Everest would be a fair comparison. This is by far the greatest challenge the industry – and all industries – has faced. But that aforementioned resilience is on show now more than ever. Certain online verticals have thrived in the absence of others, industry conferences have gone virtual and retail companies have been quick to design equipment that will indeed keep players socially distanced when casinos return. Yes, many have lost their jobs, many have been furloughed, and whole companies and casinos have been hit too hard by this pandemic to continue thereafter.
And yet, while the pandemic has taken its victims even in a business sense, the gaming sector has maintained unity with its back against the wall. This is perhaps no coincidence given its second nature of being put in this position. Stigma and negative press, which have maintained during the pandemic, have always plagued gaming and companies have had to stand strong in the face of criticism – both justified and unjustified.
So as I look back on covering the industry with Gambling Insider, it seems perfectly logical to me that the sector remains so resilient against such a difficult backdrop. Whether it’s fixed-odds betting terminals in the UK or political opposition to mobile wagering in New York, it’s never been plain sailing for gaming. Given the nature of the product it sells and the default anti-gambling stance of many on the outside, it never will.
Naturally, however, the coronavirus pandemic has particularly exacerbated the physical restrictions facing casinos and sports betting firms to a previously unseen degree. But as live sport gradually returns and casinos slowly re-open, we face new beginnings in gaming. There will be a greater onus on having a digital presence, for instance, and anyone still in denial about online’s benefits simply won’t be around if another crisis is to hit further down the line.
But if there’s one silver lining, it’s that the creativity and togetherness this industry has nurtured will keep it fighting fit for the long haul. Though it may not be what the critics want to hear, numerous executives have told me over these last two years there will always be a demand and, therefore, an industry for gambling. At a time like this, the entertainment value it provides is an undoubted positive, especially in the face of COVID-19.
THE GREAT COVID PLOT TWIST
Owain Flanders looks back at Gambling Insider’s industry predictions for 2020, and how these might have been impacted by the current pandemic
In December last year, my colleague Tim Poole put together a list of industry predictions for 2020. Of course, for want of a crystal ball, he had no knowledge of the incoming global outbreak of COVID-19 and quite how different the industry’s outlook would be in just over three months time.
Now that toilet roll is returning to supermarket shelves and our DIY haircuts have grown out, it’s time to look retrospectively at how the pandemic has, or hasn’t affected our predictions.
GREAT BRITISH REGULATION
Seemingly, regulation is one thing that is immune to the effects of a widespread pandemic. In fact, lockdowns have made regulators even more cautious when it comes to operators and how they protect potentially vulnerable homebound customers.
In May, the Gambling Commission issued new guidance for online operators in the UK to ensure the safety of players during the pandemic, despite also concluding “there is no evidence to suggest an increase in problem gambling”. The additional guidance, which included increased monitoring of players, follows suit with the extra caution shown by regulatory bodies in other markets.
While the pandemic may have increased the Gambling Commission’s focus in the short-term, there is no evidence to suggest this will speed up the Gambling Act review or any increased regulation. In fact, the industry’s behaviour during the crisis could play favourably towards its regulatory outlook. For the most part, it seems operators have played their part in protecting players, and charitable industry donations – like the Virtual Grand National profits to the NHS – will undoubtedly have some positive impact on public image.
NEW MARKETS
Excitement in new emerging markets around the world is not something that has been quelled by the virus. In fact, the pandemic could even prompt further investment from those struggling in more mature markets.
LatAm in particular has seen continued investment with suppliers and operators continuing to eye up the potential of the region’s markets. Speaking with Gambling Insider in January, BtoBet CEO Alessandro Fried described the region as complex because it’s still in a regulatory phase. However, as we look forwards in 2020, it will be interesting to see how the markets open up once the pandemic has subsided.
In our 2020 predictions, we suggested Sweden will need to restore confidence after a difficult first year of re-regulation. Sadly, it seems the pandemic has had the opposite effect. The Swedish Gambling Authority has introduced a set of strict temporary rules to restrict gambling activity during the pandemic and, as a result, it seems tensions could not be higher between the regulatory body and its operators. It would be hard to disagree with Patrik Hofbauer, CEO and president of Svenska Spel, when he described these measures as “a substantial underestimation of the gaming industry’s ability to present powerful measures themselves”.
US SPORTS BETTING
After 2019 saw the expansion of sports betting across the US, we hoped 2020 would test how much revenue those markets could generate. However, with the pandemic cancelling all major sport and closing down land-based sportsbooks, this full test of the market’s powers will have to be delayed until 2021.
Instead, the pandemic has created an unusual situation for sports betting operators. In Colorado, sports betting was legalised on 1 May with full lockdown in effect, while Nevada saw sportsbooks offering a drive-thru service as the Las Vegas Strip closed its doors for the first time in its history.
It’s not all doom and gloom however. DraftKings reported 30% year-on-year growth in net revenue for Q1 2020 despite the lack of sports, and CEO Jason Robins said long term growth expectations “remained unchanged”. We have also seen the pandemic motivate land-based casinos to integrate online into their sportsbook offerings – something that should pay dividends down the line.
Evidently, the US sports betting market is not down and out – only temporarily dormant. By increasing the necessity for an online market, the pandemic may have even played its part in speeding up the process of migration to mobile, although, sadly, we will now need to wait until 2021 to see a test of its true powers.
ADAPTING TO A NEW WAY OF LIFE
Iqbal Johal looks at how the coronavirus pandemic has forced us to a digital way of life, and how the gambling industry must follow suit to recover stronger than before
Now that the dust has settled after the initial impact of the coronavirus pandemic, it presents us a chance to take a step back and work out how we can move forward as an industry.
We’ve all heard the countless losses posted by operators and suppliers, both in terms of financial and personnel, with the outbreak hitting not just the gambling industry hard, but also us as individuals.
While we’re still a long way off entering anything near normality – whatever that might be – the whole predicament does present an opportunity, and a chance to reset and improve.
That’s certainly the train of thought among the dozens of executives from all over the industry I’ve spoken to or heard from during this period, and it’s clear to see what the consensus is on how we can come back stronger than before with an accelerated move to a digital world.
While technology very much played a part in our lives before the outbreak, we could rely without large elements of it for most of our daily lives. However, we were getting to the stage where in a few short years, we’d be living in a fully immersive, technological world, led by driverless cars and e-meetings.
Now, it seems the future has arrived.
This period has shown how much we can keep moving on with the use of technology, from remote working, to Zoom meetings and even weekend FaceTime quizzes. We’re now extremely used to having groceries and takeout delivered to our door, only visiting the shop if it’s essential.
It might have been several years before we were due to live our lives out in a digital way, but given the circumstances, we’ve fast-forwarded that trend, and there’s no reason not to see it continue.
While we all appreciate face-to-face communication, we’re going to have to get used to the fact this just might not be possible on a regular basis for the considerable future.
Our patterns of behaviour are changing and the gambling industry needs to adapt to that.
Luckily we work in a digital and forward-looking industry and the general opinion among many operators, suppliers and affiliates is they will continue to adopt a mainly remote working policy because it has proven to work so well for them.
A forced ramping up to online, aided with the suspension of live sport, has also seen two very digital verticals flourish: esports and virtual sports.
During Gambling Insider’s AffiliateCon Virtually Live, held online in May, Golden Race CEO Martin Wachter mentioned how in terms of average players, virtual sports had increased by 206% as a result of the outbreak.
While at the same conference, esports affiliate Sickodds co-founder Tom Wade spoke about a 40-times growth in esports betting, among such titles as Fifa and F1, thanks to the ease of moving to a solely online platform.
Those figures demonstrate the fact the industry is heading to a digital first landscape, and much quicker than anticipated.
That will be music to the ears of operators in jurisdictions hesitant to make the jump to online, particularly in Latin America and the US. The SBC Digital Summit in April on the state of play in LatAm very much focused on the need for the region to boost its online channel.
A region heavily supported by land-based operations will have to look to online just to keep afloat according to the panelists, and with the precarious situation in Brazil and Argentina, in terms of legalising online gambling, could this put the process into gear?
It’s the same story in the US, where many states are still against online gaming. At the same summit, Oregon State Lottery CEO Barry Pack was adamant the recovery from the pandemic will force a quicker digital transformation in the industry.
This situation could leave the likes of the US and LatAm with no other choice but to quicken the process to online and move with the times.
We’ve all been deeply affected by the COVID-19 outbreak, but that doesn’t mean we can’t learn and progress from it. The gambling industry is no different, and a huge opportunity to become virtually digital is one it must take seriously to avoid being left behind.
