#WINNING

Peter-Paul de Goeij, Managing Director of the Netherlands Online Gambling Association, and Björn Fuchs, Chief Digital O cer at JH Group, explain why the Dutch market has won with its online gambling regulation

We regularly read in Dutch newspapers that politicians and addiction experts are very concerned about the increase in online gambling. They fear it is getting out of hand since the legalisation of online gambling. While the concerns are genuine, the real picture is much more nuanced and there are actually reasons for optimism. Indeed, initial, tentative results suggest that Dutch online gambling regulation is working well.

Since October 2021, the possibility of legal, and therefore safe, responsible online gambling has existed in the Netherlands. Before this, it was pretty much banned in the Netherlands. This did not mean it was not happening – quite the contrary. For instance, in January 2019, MotivAction estimated that over 1.8 million Dutch people regularly gambled online. This was online gambling without any protection from the Dutch Government and without the strict supervision of the Dutch regulator

Kansspelautoriteit (KSA). This unprotected and unsafe gambling was what the Government – rightly – wanted to put an end to. Consumers had to be properly protected from now on; gambling addiction had to be curbed, and crime and fraud had to be fought. Therefore, an open and strict licensing system was introduced in October 2021.

A lot has happened since then. Dutch people were treated to a hefty amount of advertising for online gambling. These advertisements came on top of the already existing advertisements for state and charity lotteries, scratch cards, lotto, Toto and land-based casinos. Gambling advertisements seemed almost inescapable in all media. Annoyance was high and already in December 2021 – even before possible effects of such advertising were known – the House of Representatives forced the minister first to ban the use of role models and, eventually, to declare a ban on untargeted advertising for online gambling. This ban will take effect from 1 July.

At the end of April, the KSA reported in its fourth monitoring report that 762,000 Dutch people gambled online at least once in 2022. In addition, it estimated that 92% of Dutch online gamblers only gambled at providers licensed in the Netherlands. That percentage is reason for optimism, as the minimum legal target was 80% by October 2024. The main government objective, to protect consumers, seems to be well within reach with this percentage already met in 2022.

This fact has wrongly been completely under-reported. Both news coverage and reactions from politicians and healthcare were mostly alarmist – and unbalanced.

For instance, from the KSA report mentioned, a small part was lifted and taken out of context: more than 60% of online gamblers were said to have started gambling after regulation. This is incorrect. Indeed, MotivAction’s estimated number of online gamblers from 2019 contrasts sharply with the 762,000 reported by the KSA in 2022. In addition, the same reporting also stated that the number of problem gamblers and addicts would rise since the market's opening. However, according to the LADIS interim report published in March, there was a 10% drop in the number of gamblers reporting to care facilities for treatment in 2021 and 2022, a continuation of the downward trend since 2019.

These examples reflect well what the online gambling dossier suffers from above all else: fear – and a severe lack of reliable and comparable data. After all, we come from a situation where there were virtually no hard figures available. By necessity, estimates, samples and extrapolations were used about, for instance, calculating participation in online gambling or the amount of money involved in online gambling. In retrospect, these estimates always turned out to be too inaccurate and a considerable underestimation.

Gradually, fortunately, the picture is changing. In fact, licensed operators must record all gambling transactions in a central database with the regulator. This way, more and more information becomes available to the KSA and, as a result, the insight into the legal sector increases. Full insight into the sector, however, we unfortunately never get.

After all, the countless elusive illegal online operators do not reveal their secrets. What is certain is that gamblers in illegality are repeatedly exposed to high risks and – as Follow The Money recently showed – they often face organised crime there. How many gamblers participate in illegality and how much they gamble there can only be approximated by conducting regular consumer research. To this end, the Online Gambling Barometer was launched in 2021: an annual consumer survey conducted by IPSOS.

From the Barometer 2023, published in May, it emerges that the illegal market is indeed declining further in favour of legal operators. Dutch people also saw fewer gambling advertisements. The overall number of at-risk players is stable, although a slight increase can be seen among young adults. In addition, consumers feel that gambling companies have an important role in preventing problems.

Clear tasks lie ahead for all stakeholders to make licensed offers even safer and protect online gamblers even better from danger. Licensed gambling providers take responsibility and are happy to further fulfil their duty of care. Incidents must be prevented as much as possible.

So, in short, the encouraging news is that a large proportion of consumers choose protection, fair play and prefer to gamble where addiction prevention is well regulated. A success for legislators, a windfall for taxpayers and a reassurance for online gamblers. Seen in this light, gambling legislation has therefore, for the time being, succeeded and not ‘failed’, as one despondent MP recently exclaimed. In this respect, facts and figures could speak a bit louder – and emotions or the underbelly a bit less often.

Self-production or aggregation: Where is the market now?

Content is king. While quality is important, so is how that content is distributed. This is where aggregation comes in and it’s a trend that’s here to stay. In the ever-evolving landscape of online gaming, aggregators have emerged as key players, revolutionising the industry through their ability to consolidate game content from various partners into a single, seamlessly integrated module.

Creating games revolves around having an online gambling hit or an intriguing novelty to get players engaged and increase their loyalty. Today, it is easier said than done compared to the past, when the number of content suppliers in the iGaming industry was limited. So, it’s no surprise that with the increase in content, aggregation has come into play.

The concept of aggregation is not unique to iGaming but is evident across many industries. The same way aggregation allows suppliers to access many markets and hundreds of operators through one integration is parallel to entertainment and e-commerce services like Netflix, Disney+ and Amazon. Consumers want content fast with easy access and that means accessing it all in one place at the click of a finger.

The noticeable shift towards aggregation is particularly significant for smaller suppliers who seek to achieve faster entry into the market. By partnering with aggregators, these suppliers can leverage existing distribution networks and reach a broader customer base, without having to invest heavily into their own infrastructure. It allows them to focus on their core competencies while benefiting from the aggregators’ established platforms.

On the other hand, larger suppliers who have already saturated their distribution in the market may find it beneficial to eventually transition to taking control of the integration and eliminate the costs associated with working through aggregators. However, even for these larger suppliers, there are still advantages to staying with aggregators. They often provide valuable support services and additional features that can enhance the supplier’s offerings and improve customer satisfaction.

This is the beauty of this vertical, as it brings a plethora of technological aspects and streamlined processes to the table. Acting as the glue that binds together online casinos, it’s crucial that aggregators excel at offering seamless integration through API. However, their influence extends beyond mere game integration. Aggregation encompasses payment systems, affiliate programs and promotional tools including free spins. Plus, through partnerships, suppliers can keep informed on market trends and incoming regulations.

As the market evolves and the industry witnesses an increase in aggregators, that is not to say there aren’t any benefits to distributing through direct means. One notable advantage is cost efficiency. By distributing directly, suppliers can avoid paying platform fees or revenue shares associated with working through aggregators. This can lead to higher profit margins for the supplier.

Moreover, direct distribution allows suppliers to have complete control over the integration process. They can add upgrades or new features to their distribution platforms without any integration restrictions sometimes imposed by aggregators. This flexibility empowers suppliers to customise their distribution channels according to their specific needs and preferences.

Due to Realistic Games’ experience in the digital market, we find ourselves in a fortunate position with numerous direct integrations from the relationships we have built. However, in our pursuit of expanding our business further, we are embracing the aggregator approach. By partnering with aggregators, we gain access to a vast network of operators, opening doors to new opportunities and reaching a wider audience. This strategic shift towards aggregation allows our integration teams to redirect their focus towards platform upgrades and product innovations instead. So, overall: aggregation.

Self-production or aggregation: Where is the market now?

Shelley Hannah, Director of Casino Products, Relax Gaming

to what other industries are experiencing. Within the proliferation of content providers, one thing remains clear: quality will prevail. Just as excellent music finds success in the music industry, high-quality content will rise above the rest. Operators have the power to select the content they believe will resonate with their target audience, emphasising the importance of delivering top-notch products.

The beauty of aggregation lies in its ability to offer operators access to a wide range of content that meets their diverse player needs across different markets. This is particularly advantageous for new operators aiming to hit the ground running. By integrating with a single aggregator, they can quickly access a plethora of content options, setting themselves up for success.

Shelley Hannah

In today’s rapidly evolving marketplace, the role of aggregators cannot be overstated. Across industries, we see the rise of aggregators as a means of simplifying the process of delivering products to customers. Whether it’s music streaming services like Spotify or e-commerce giants like Amazon, people increasingly prefer having everything in one place, utilising a single delivery method. This trend is not only convenient but also demonstrates the demand for streamlined experiences.

When it comes to our industry, aggregators play a crucial role in simplifying and consolidating the quality of delivery through proven technology and APIs. Handling massive levels of transactions across numerous regulated markets requires precision and quality, which aggregators are well-equipped to provide. In the past, the number of content suppliers in our industry was limited, but now we find ourselves amid a sea of providers. While this abundance of choice may seem overwhelming, it is not dissimilar

However, it’s crucial to understand that aggregation is not merely a technological offering – it serves as the foundation upon which a package of quality products and services is built. Aggregation encompasses various aspects, from product compliance add-ons to streamlined processes, easy commercial connections, market-specific relevance, centralised support, uptime management, invoicing and promotional products. Aggregators must excel in all these areas to instil confidence in operators and deliver a comprehensive package that simplifies their operations while minimising risk.

As the marketplace witnesses an increase in the number of aggregators, it’s vital to approach the selection process with caution. While it’s healthy to support the increase in available content, operators must be discerning in choosing aggregators that prioritise quality. Finding the perfect aggregation setup might be challenging, but there are passionate players in the market who are striving for excellence.

The speed at which our industry evolves often leaves little room for verbalising gaps in the aggregation product offering, or collaborating effectively over the latest regulatory changes. However, it is crucial to take a step back and dedicate the time required to make things right. Adopting a product mindset and evolving in these fast-moving times will help us stay ahead of the curve, and ensure the industry’s continued growth.

Having observed many small suppliers thrive through the aggregation setup over the years, it’s evident that aggregators can serve as a great springboard to success. They enable suppliers to succeed where direct integrations might have posed significant challenges; and operators to offer truly unique titles that are market compliant. Aggregators must recognise and celebrate the growth and achievements of their rising star suppliers. By doing so, they can create a mutually incentivising environment that encourages collaboration and continued excellence.

As market regulations continue at pace and low-quality content threatens to drown out the smaller, innovative suppliers, aggregators remain an essential part of our evolving global marketplace. However, it’s undeniable that there is always room for improvement. Suppliers should focus on their areas of expertise, creating amazing games, while leveraging the power of a strong aggregation bundle. This combination has already proven to propel suppliers to success, and it will continue to do so in the future. By fostering a culture of constant improvement, aggregators can better serve the industry and contribute to its ongoing growth.

Self-production or aggregation: Where is the market now?

Michael Bauer, Chief Games Officer, Greentube

these suppliers need to have extensive support teams in place to gather the requisite certificates and licences. The benefit here for suppliers is that once they have formed an agreement with a particular operator, they have complete control over that relationship, rather than relying on a mediating third party.

However, the direct integration approach is not realistic for smaller suppliers that are without the resources necessary to navigate a very fragmented and complex regulatory landscape. They simply cannot afford to go it alone and integrate directly with a host of operators in multiple markets, while managing and maintaining each relationship.

Aggregation platforms can deliver not only content, but also a range of added-value services that can help smaller suppliers make a big impact when launching content across multiple jurisdictions.

There is another aspect to this question, which is the unregulated iGaming market. Whenever regulation is introduced that is too restrictive for the ecosystem to flourish, the net result is a gain for black-market operators that do not play by the normal rules; and the worse the regulation, the bigger the risk to player channelisation. Of course, this is not in the interest of Greentube.

It really all depends on the level of resources that are available to the supplier. If you look at the bigger suppliers within our industry, what you see generally is a willingness to work on direct integrations with operators into major regulated markets. For this approach to be successful,

Self-production or aggregation: Where is the market now?

Smaller studios will always have a key role to play in bringing fresh ideas to the iGaming industry. However, they inevitably need to select a technology partner that is able to bring their content to players in regulated jurisdictions, delivering speed to market at scale. At Greentube, we have our own technology stack that our studio partners use to develop and deliver content, along with a range of essential, advanced engagement and retention tools.

Finally, there is the technology aspect to consider. Many of the bigger platforms in our industry are faced with the challenge of owning a tech stack that is inflexible, somewhat outdated and unsatisfactory in the context of a modern-day iGaming environment. For some of the market-leading platforms, they face a situation whereby a wholesale revamp of their technology would be hugely costly. At the same time, to integrate directly into these platforms can be very complicated and time-consuming. This is where aggregation comes into play, allowing suppliers the benefit of audience reach; all while taking away the need for platforms to devote large-scale resources to creating their own aggregation solutions.

Enrico

Bradamante, Chief Commercial Officer, Pariplay

The ever-shrinking global map means operators need to be able to stand apart in whichever way they can. This can encompass anything from UI to local knowledge or, most obviously, through market-leading product portfolios. With the ever-expanding spread of regulation in markets, there has never been more potential for gambling brands, nor more competition.

A sure-fire way to take a broad swathe of content to market quickly is via an aggregation platform. The modern platform serves the needs of every element of the iGaming ecosystem, which for operators is an important factor.

Given that the landscape has altered over the last few years, there is now less pressure on operators as a business to have their own Remote Gaming Server (RGS) and

Enrico Bradamante direct integrations. With an aggregator partner, new, innovative and top-performing content can go live swiftly and securely, with little action required from an operator partner. Not only is this a huge boost for operators, but also for studios – especially the smaller ones that possibly lack the vast commercial infrastructure required to maintain relationships with many operators. Aggregation platforms now are expected to offer so much more than simply products on a platform. With more and more markets embracing regulation, keeping on top of compliance requirements for products can be both costly and time-consuming.

Nowadays, the role of aggregators such as Pariplay is to assist studios looking to get their content live in markets, utilising the iGaming licences and dedicated compliance teams. This allows for studios to enter multiple states and provinces with only one integration. In addition to compliance assistance, modern platforms are offering ever-more sophisticated engagement tools offered by third parties to further bolster product engagement.

Gamification isn’t a new concept, but being able to boost engagement, drive up retention rates and increase ROI via an aggregation platform offers a whole new opportunity for operators. Having the perfect harmony in the ecosystem is vital to its success, and suppliers that can balance their aggregation offering with powerful in-house offerings will always hold an advantage in an incredibly competitive space.