Egaming industry predictions for 2018 – including automation and Dutch regulation

Simon Trim, CEO, Sporting Group, operator of Sporting Solutions

1. Lotteries to level the playing field

Changes in the regulatory landscape continue to add to the complex challenges faced by lotteries, with increasing pressure to compete effectively with private operators. Through extended outsourcing – across price, risk, client and operational management – lotteries are able to benefit from economies of scale and the associated gains in efficiency experienced by large-scale private operators. In the year ahead, I expect to see lotteries continue to embrace innovative outsourced solutions and focus resource on their front-end proposition and brand position to differentiate their offering and thrive against a backdrop of intense competition.

2. Automation continues to enhance performance

Automated technologies have delivered tangible improvements to margin and reductions in cost for sportsbook operators and suppliers in a position to embrace them. Aside from pricing, automation has made customer profiling and risk management more advanced than ever. Big data solutions, underpinned by machine-learning algorithms, are delivering deep, real-time analysis. The speed and accuracy that this is creating vs. manual and subjective risk teams is vastly improved.

Automated risk adjusted pricing changes prices based on bet volume, customer profile, market behaviour and expected market movement, allowing operators to realise improvements in margin. I expect operator demand for automated risk-adjusted pricing to increase next year, though success will only come on the back of considerable expertise, limiting its immediate benefit to a handful of specialist suppliers and operators who have the proficiency to do it in scale.

3. Differentiation to drive local operator success

The strategy of operators is continually evolving – a historic focus on a blanket offering of the most events and markets is making way for increasing personalisation, as illustrated by the prevalence of bet requests in recent months. Throughout the next year the personalisation trend will continue as operators increasingly look to appeal directly to specific audiences with bespoke content suited to them.

There is little benefit to operators in dedicating valuable resource to trading sports for which there is a reliable outsourced supplier. Instead, I expect operators to utilise their local knowledge and expertise to enhance their offerings in local sports and events – be that handball in Denmark or Australian Rules Football in Australia, for example. In order to leverage this local product differentiation, I expect more operator focus on regaining control of their brand by insourcing their channel development rather than following a generic white-label route. This differentiation is key for operators looking to attract new – and maintain existing – customers, who have an increasingly broad choice of outlet for their bets.

Willem van Oort, founder, Gaming in Holland

1. Legalised remote gaming comes to the Netherlands – I expect that the Dutch Senate will finally pass the Remote Gaming Bill in 2018, with the first licensed operators going live in H1 2019. Apart from that, the Dutch regulatory environment will, however, remain unpredictable. It would not be surprising to see some additional advertising restrictions and responsible gaming measures. Moreover, licensed operators will need some form of as-yet-unspecified “physical presence.” In light of the above, some operators will undoubtedly need to adjust their road maps, which might have a significant impact on the general market outlook.

2. The industry’s center of gravity moves west – Ever since the US Congress adopted the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), regulated remote gaming has mostly been a European phenomenon. Will this change in 2018, as an ever increasing number of US states appears to be exploring ways to legalise remote gaming? If so, investment, talent, and operational focus will move partly to other side of the Atlantic, which would have a major impact on the industry as a whole.

3. Remote and retail will get hitched – With some of the larger regulated remote EU markets now reaching maturity, the ongoing interplay between remote and retail will be less about substitution and more about finding complementarities. Thus, investors will look with increasing favor on combinations between retail and remote. The GVC-Ladbrokes Coral merger seems to that investors are placing their bets on omni-channel strategies.

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