Analysis: William Hill, 888 and embracing the mass market

If anyone doubted sports betting was a truly mass market proposition in the UK then a quick glance at the App Store during the Cheltenham Festival should have put that to bed once and for all. On the back of its £20 cash back offer Sky Bet was the number one downloaded app in the UK on Thursday morning, above such tech upstarts as Instagram, WhatsApp and Facebook. But it should give everyone a pause for thought about what exactly being a mass market proposition means.

Much of the William Hill results presentation was given to its move towards a more recreational mass market proposition, and it’s clear this strategy is having a big impact on player values with the firm highlighting a fall  in ARPU in recent results releases and a strategy of targeting a larger volume of lower spending players. “Structurally, this is reducing the average revenue per user, down 17%, as we focus on lower-staking recreational players and increasing new accounts, which were up 10%,” it noted.

888 is another operator who has had to make a shift to this mass market. In its end of year results the operators talked of the UK a “strategy of appealing to and attracting an increasingly recreational ‘mass audience’ customer base”. This shift came partly in response to the changing regulatory environment in the UK included “tightening of anti-money laundering processes, increased customer due diligence and further customer protection tools and protocols”. Combined it led to a revenue fall of 16% in the UK in 2018 as it lost some high-value players in the shake-up.

No more bad news

That’s the end of the bad news, however, and there are some green shoots of recovery at both Hill and 888, with the latter reporting first time depositors increased in the second half of the year and customers are responding well to its new Orbit casino platform. Interestingly it also reports falling acquisition costs, although it’s not yet clear if that drop is matching the one in player values. But it’s the Orbit platform that raises the most interest in the mission to capture the hearts and minds of the mass market.

Orbit is the new Netflix-style personalised recommendation front-end platform for its casino site. 888 reported “particularly positive” results in the second half of the year from Orbit with higher conversion rates, increases in the number of games played by customers and uplifts in new customers acquired. And it’s this investment in product and user experience, particularly around personalisation, that will be crucial for the next stage in the industry’s development not just in the UK but in other regulated markets as conditions continue to become more restrictive around VIPs.

The reality of the mass market is lower player values, higher expectations and greater regulatory oversight. Operators are not always prepared for any of these three factors and so far the main efforts to address the former seem to be by squeezing up share of wallet and the latter by a mix of reactive changes to regulatory shifts and a handful of mea culpas when required. But it’s the higher expectations that are the most important to address. If the industry wants continuing growth from this sustainable layer of mass market consumers then it has to provide a slick, personalised user experience and brand that has values they can get behind.

Selling the dream

And make no mistake, brand will be a big part of this. But what is tricky for the egaming sector is trying to figure out what exactly the dream is they are selling. Industry advocates are often caught in a trap of positioning the industry for what it can be for the few rather than what it is for the many and overstating the role of skill or knowledge for the average punter. And this is a debate that dominated the online poker sector for the best part of a decade.

Marketing and product in poker was almost exclusively focused on aspiration and skill, which sidestepped the reality of the player experience for most customers. The promise of gambling is rewards, but those can be less tangible than money and the transactional exchange should always be entertainment for money. The industry arguably should focus on providing that entertainment not just through the basic product, but through the wider user experience including intangibles like brand if it truly wants to crack the mass market.

Marketing along with product needs to change, and it could be that a move to a more personalised experience around both could be the next big leap forward. And that raises another equally important question. Is the egaming sector embracing this brave mass market future or is it just downscaling expectations around average player values and renegotiating acquisition costs? The bigger question might be whether the mass market is really something the industry wants?