Industry predictions for 2020 - including credit cards, loot boxes and customer retention

Susan Biddle, commercial technology consultant, Kemp Little

A ban – or at least restrictions – on using credit cards for gambling will be introduced in the second half of the year. Following the Gambling Commission consultation on the use of credit cards and the All-Party Parliamentary Group call for a ban on the use of credit cards to gamble online, the Conservative manifesto proposed review of the Gambling Act with a particular focus on credit cards.

With the Liberal Democrats also pledging to ban credit cards, and Labour proposing general reform of the Gambling Act, this is likely to receive cross-party support. However, Parliamentary time may be limited by Brexit-related legislation and, as always, the devil will be in the detail, so any changes are unlikely to come before the second half of the year. Additional know your customer techniques will need to be developed to make up for the loss of information relating to credit card ownership and use.

Loot boxes may finally be regulated. The 2019 Parliamentary (DCMS) Committee recommended their regulation as games of chance, and a ban on the sale of pre-paid loot boxes to children, and this was another focus area for reform pledged in the Conservative party manifesto – but again limits on Parliamentary time may mean this is kicked down the track a little first.

Social responsibility and innovative technology will continue to go hand-in-hand. Facial recognition may become part of the standard KYC checks, algorithmic predictors of risk will become increasingly sophisticated, and there will – or should – be an increased focus on building social responsibility into the design of games. Increased consumer-focus will hopefully lead to development of new tools to help players control their gambling, as well as improved user experience; mobile devices can offer always-on controls as well as gambling opportunities. I am disappointed that once again ICE have relegated the Consumer Protection Zone to a further corner of the exhibition area, down-playing the critical importance of this aspect of the industry.

Looking further afield: Though the UK continues to represent the largest part of the EU online gambling market, the growth opportunities are increasingly elsewhere. Brexit provides a further reason for operators to base their HQ elsewhere and the recent reports of a slight decline in UK remote revenue (despite increased turnover) may presage a greater focus on other territories – perhaps the US, finally building on the 2018 repeal of PASPA, and/or in South America. Lack of harmonisation across EU continues to represent a challenge for an integrated growth strategy, but the opportunities in Eastern Europe may be increasingly attractive.

And finally, a negative prediction: cryptocurrencies may continue to nibble at the edges of the gambling sector but 2020 will not be the year when they become mainstream.  The fact that the 5^th Anti-Money Laundering Directive will impose the same AML and customer due diligence obligations on cryptocurrencies and cryptocurrency exchanges will increase their costs of operation, so reducing the potential savings from dealings in these currencies, but in the longer term may make these currencies more acceptable to the major operators. It would be ironic if a credit card ban merely led to increased gambling using cryptocurrencies.

Enteractive CEO Mikael Hansson

Focus on retention

A study made by the American Society of Quality Control has found that 68% of customers leave a company because they do not feel valued. Online gambling operators have mostly been focusing on acquiring new players and haven’t really felt the need to take care of their existing customers. They spend a great deal of time and money on advertising campaigns to generous welcome offers.

This means that operators are spending vast sums of money on acquiring players only to lose them a short while later because they have not continued to look after them once they have signed up to their site and deposited for the first time.

Retention receives more attention now than ever before due to the fact that the players are becoming savvier and wanting to feel special towards a brand. It will do so even more by next year and the years to come.

Really connect with your customers

The challenge now is to not make it too automatic but instead really connect with people – with the customers. To get that real loyalty.

This means opening a direct line of communication with the customer and spending time communicating with them via telephone. For example, they could call a player and personally welcome them to the site after sign-up.

A phone call is important because it provides a human connection to the online gambling brand, something that cannot be achieved via email, SMS and live chat. A phone call allows the operator to show they really do care.

So instead of thinking about CRM and pushing bonuses and incentives at players, think about the emotional aspects of playing at an online casino or sportsbook. By connecting with customers, operators can learn more about them and ensure their needs are being met.

2020 will be the year when operators will step back and think more about the human aspect in their CRM cycle.

New markets

2020 will see more regulation and a lot of companies pivoting to adjust to these regulatory changes. The continued expansion across the US will be one of the leading growth areas for European operators that would like to take advantage of early entry into a somewhat unsaturated market.