Egaming industry predictions for 2019 - including esports and social responsibility

Matthew Trenhaile, Sportradar

Esports: By the end of the year the industry will finally bring to market an acceptable esports offering which is comparable to that of traditional sports. Fixture planning, swift resulting, a wider range of interesting side bets and a much improved live betting experience should all have been attained. Those who think we have reached that point already are kidding themselves. Esports evolves at a rapid pace and requires great expertise and flexibility to keep on top of game updates and brand new games and the industry has not delivered on that yet. As an industry we currently still struggle to get to market with the an offering for the latest game swiftly. It will most likely be an esports specialist bookmaker who produces the first well rounded offering which is comparable to the soccer and basketball offerings of the more household names. Those who think that esports’ popularity will always struggle to translate to betting turnover would be shocked if they were in the trading rooms of the likes of EGB and GGBet.

Cryptocurrency: Cryptocurrency valuations have been extremely volatile this last year and consequently have made running a cryptocurrency only bookmaker fraught with challenges. At one point your client base is betting in average stakes ten times larger than the average Fiat currency bookmaker only for it to halve in a few weeks and possibly settle somewhere in between in the weeks after that. Those crypto bookmakers who have navigated these choppy waters successfully will have learnt lots and forged strong businesses under the pressure of extreme highs and lows. I predict that those who have survived 2018 will now be in a position to consider moving in to Fiat currency bookmaking and shouldering the extra costs involved in that. I also predict that more fiat currency bookmakers and in particular those specialising in online and used to operating in grey markets will adopt some of the cryptos for deposits. Regardless of the valuations of the cryptocurrencies themselves bookmakers will be unable to resist the opportunity to tap in to markets which can circumnavigate draconian geographical restrictions by using cryptos. Large volumes of crypto bets made their way out of the US and that may diminish with deregulation however there are still those holding Rubles, Rupees, Reals and Renminbi who will be experimenting with crypto and eager to place a wager. The question remains whether companies will open separate brands or sites to firewall their existing fiat businesses or simply add extra payment processing functionality to their existing products.

Third-party risk management: In some ways revealing to third parties the bets you are taking is the final frontier for bookmakers looking to cut costs or indeed launch on a budget. A selection of companies are now sporting extensive trading teams with decades of experience backed up with quants and data scientists and are looking to help you make your business more profitable. Rather than a conflict of interest existing by having multiple bookmakers risk managed by the same company it in facts makes the product even better for all the stakeholders. The greater the amount of data available to a risk management team the better product they can deliver. The companies with the most bookmakers under management and with the broadest exposure to different sports, markets and geographical locations will be able acquire the best betting intelligence and deliver the best trading solutions. In 2019 this will become more and more apparent and more bookmakers will look to take the leap of outsourcing their risk having already outsourced their odds compilation. There will also as a consequence of this trend be more companies looking to provide this service along with their existing suite of products. All eyes will be on Pinnacle Solutions the self professed masters of risk management.

Susan Biddle, Kemp Little

Diversity and inclusion in the gambling industry: Not just in gender, but also in social background, age, disability, race/ethnicity, religion and sexual orientation etc. If ethnicity pay reporting is introduced following the current BEIS consultation, it is likely to be just as revealing and challenging as pay-gap reporting. This is an issue not just for the operators, but also for regulators and suppliers, and means – or should mean – diversity and inclusion amongst consumers, management and staff. The MeToo campaign has raised the stakes here but the incentives for the industry are not just negative, such as fear of sanction and censure. There are potential benefits – in better products, better customer relations, better reputation, a more productive workforce, easier recruitment &  better retention of a talented workforce – for those who embrace diversity and foster inclusion.

Social responsibility: The focus on reducing gambling-related harm will continue. The reduction in FOBT limits is set to take effect from April, with the related 6% increase in gaming duty coming in at the same time: this additional challenge for the land-based industry may see an increased focus on remote gambling. ‘Know your customer’ will continue to be critical, with the announcement of the results of the Gambling Commission’s consultation on age and identity verification, as well as the current consultations on priorities for the next National Responsibility Gambling Strategy and the recipients of industry contributions to research, prevention & treatment, and the imminent consultation on customer interaction. There should be opportunities for innovative use of developing technology both to help operators to identify and interact with those who have, or may be at risk of developing, a gambling problem, and to structure their products and marketing to minimise potential harm, and also to help consumers to gamble safely, including better management of the time and money they spend gambling, blocking advertisements, and obtaining help.

Advertising: The whistle-to-whistle advertising ban is expected to apply to sports (other than horse & greyhound racing) from the start of the 2019-2020 season.  The attention – of operators, regulators and campaigners – may now switch to other media, including online and mobile.  The winners in the ongoing battle to win and retain customers who can gamble safely are likely to be those who target their advertising most effectively rather than relying on what is perceived as saturation coverage.

And of course the elephant in the room at the time of writing – Brexit, and consequent relocation of operators who need an EU base & licence to benefit from free movement of services, as well as the more general impact of Brexit on available work force, economic growth etc etc.  And if there is a change of government, we may see a compulsory levy and a ban on credit card betting.