The KPMG eSummit in Gibraltar has become a must-attend event for operators, suppliers and other stakeholders from across the online gambling industry.
Continent 8 Technologies has been a long-standing supporter of the summit, in fact we have sponsored the Summit Report from the very first event over a decade ago.
This year, to celebrate 25 years of reliable innovation, we hosted a panel, Evolution of the Industry, with big names participating from tier-one organisations. Playtech, Games Global, 888 William Hill, DAZN Bet and Bally’s Interactive took to the stage.
If you were unable to attend the event or tune into the live stream via EGR Global, below we recap some of the key highlights and talking points from the session.
How the industry has evolved over the past 25 years:
The industry is almost unrecognisable from what it was 25 years ago when the first online casino and poker brands emerged. But what areas have seen the greatest change, and what has driven this?
Kane Purdy, Managing Director (UK) at Bally’s Interactive, says the biggest change is undoubtedly regulation and the requirement for operators to protect customers at the highest level. This has not always been the case, with operators once celebrating player losses as it meant revenues were coming into the business.
“It’s very different today. You have to know every detail about the customer. If you are bolting on these responsible gambling overlays, then you have missed the message completely. It’s root and branch change throughout the operation to make sure that overlays work but that the customer journey and experience is still enjoyable.”
But what has driven this change, especially the way the industry has embraced regulation as a means of protecting consumers? Mark Kemp, Chief Executive Officer at DAZN Bet, says the meteoric rise of mobiles and in particular smartphones has been a major catalyst for the change the industry has experienced.
“The mobile phone is what has driven the greatest change across the industry – globalisation, mergers and acquisitions, the ability to manage data in a very different way. We have seen the start of and progression through the journey around responsible gambling but also the marketing technology linked to the rise in mobile usage. The industry has embraced this and is maximising that as much as possible in terms of growth opportunities.”
This has seen organisations such as Games Global really dial in on its technology so that it can adapt to the pace of regulatory and consumer change. Julie Allison, Chief Revenue Officer at Games Global, says: “When we look at companies across the industry and how they are progressing in this area, there are definitely advantages when it comes to the pace of regulatory change and how companies are adapting their technology to support that.”
Shimon Akad, Chief Operating Officer at Playtech, says the roll-out of regulations and the rise of the internet and mobile has seen operators and suppliers have to transform their products and the experiences they offer players.
“The industry has moved on, from both a product and consumer perspective, from the internet being the thing that makes an annoying noise when using it at home to something that is fast and in the palm of your hand and always available wherever you are and go. This puts us in a high pace market that is growing and what has ultimately brought the industry to the huge size that it is today – a size we could not have considered 25 years ago.”
Phil Walker, UK & Ireland Managing Director at 888/William Hill, agrees: “I’ve been in the industry for 15 years but in the last two years we have seen the change in consumer perception, demand and what they expect in terms of everything being instant, frictionless and simple. We now have an even bigger obligation to deliver experiences to consumers in this way. So, regulation and technology have changed the industry the most but what we need to keep pace with is consumer change.”
Staying ahead of the changing regulation game:
Keeping pace with regulatory and consumer change is mission-critical for both operators and suppliers. But how do organisations go about this?
Games Global’s Allison says the company has been built around a structure that allows it to have a strong understanding of each market it targets.
“We are a new organisation and when structuring our business, we made sure to put market strategy at the core and centre. We need to understand what’s coming up, how to react to it and be ahead of it. We have market leads anticipating and responding but we also have boots on the ground to gain local knowledge and feed this back in, both for existing markets and those that are yet to regulate. In these markets, it is important to build those relationships and knowledge so that when we are ready, we are prepared. This sounds easy, but it’s not.”
As an operator live in 40 markets but with 10 considered priority, 888/William Hill’s Walker says it takes a similar approach.
“We have had to embrace that local approach to consumers and regulation. There is no substitute for going from global to local, so the organisation has had to adapt via local teams and with people that really understand why the regulation is, what’s the spirit of that regulation and how we use that to provide a great customer experience. This is very difficult to do in a one-size-fits-all way.”
Bally’s Interactive’s Purdy agrees that knowledge is a must, but that organisation and platform security are also important. “When we talk about localisation, this also means getting down to a platform level. There are mature, regulated markets where you need to have all-singing, all-dancing platforms with lots of modules you can pull in and pull out. But you need flexibility in some of the pre or early-regulated markets.”
DAZN Bet’s Kemp says this can be more difficult for new operators and brands, especially when it comes to striking the balance between compliance and consumer choice.
“It’s very different market by market and we are often dictated to by the regulatory requirement in each. As a new, challenger business it’s much more difficult to go into multiple markets in an efficient way. For example, we operate in Spain, Italy, the UK and shortly Germany, all with very different regulatory regimes and needing different regulatory focuses in order to be compliant and positive for consumer choice.
“With our model, we are also working with Media Co and the regulator for media, so we have two regulators with different positions when it comes to consumer choice and safety. This is very much on a local basis which can inhibit competition when you are trying to diversify across multiple markets but don’t have the power of mature brands that have been there for a long time in order to roll out across three or four markets at the same time as resources are spread thin. So, it’s important to put local resources in to do that.”
New markets and those that have had the biggest impact:
New markets are always a driver of growth and over the past two and a half decades, regulation has happened right across the globe, something Continent 8 is no stranger to. But which market has had the biggest impact? Playtech’s Akad is quick to point to the US because of its sheer size and opportunity for future growth.
“The impact it is having goes beyond the numbers and market size of $6b Half of that is coming from gaming and in just a handful of states, so there is plenty more room for growth. But it goes beyond because the big operators in the US are buying all of the B2B companies that exist or can co-exist and have created this unique place where B2Bs are trying to buy each other to become huge US businesses.
“This materially changes the landscape and the opportunities for operators to work with B2Bs elsewhere in the world. But it’s not just North America, South America is progressing, and Africa is also moving forwards nicely. Even Europe, which you might think is at the end of its super-cycle of regulating markets, looks set to have two major markets regulate in the next few years. The last ten years have seen significant growth and I think this will continue for at least the next five years.”
The emergence of ESG as a priority for businesses:
Another big change but one that is less talked about is environmental, social and corporate governance (ESG). It is a rapidly moving area and one where organisations are taking a variety of approaches.
Purdy has this to say about Bally’s approach: “It is essential for us at the moment. We are going out to the capital markets and our ESG approach is being seriously looked at and we are being asked to demonstrate that we are taking it seriously. We have always seen the value in it and need diversity to grow and be better – we need the voices of our people to be reflective of the voices of our customers and we are delivering that. It’s a non-negotiable these days and part of the fabric of our business.”
As a new company, DAZN Bet has the opportunity to set out its approach to ESG from the get-go. “As a new business it’s about starting off on the right track and making sure that it is embedded at the very start,” says Kemp. “It might not be as structured as some of the larger businesses, but the management culture, most importantly, is there at the start to then build on.”
William Hill/888 is one of those larger, more established organisations with a significant retail footprint, too. Walker says: “Taking two strategies and merging them together has given us the opportunity to be a start-up in that sense, refreshing our thinking and bringing together two quite different approaches into something that is more than a sum of its parts. For William Hill with its 7,000 colleagues and retail locations, sustainability has been a priority for a number of years, especially being able to become carbon neutral in our real estate has made a big difference and our people are very proud of it.
“It’s something that we talk about on a monthly basis throughout the management teams in every division and the board is far more active in dividing change and challenging how far we can go. So, it’s not just a tick-box exercise or something that is conservative. We’ve found that by being more aspirational and setting longer-term targets we are able to make more progress.”
One key aspect of ESG is of course diversity and inclusion. But how are organisations driving positive, lasting change and what are the pitfalls organisations much avoid?
Kemp says that it has to move from a “best endeavours approach” to a corporate strategy with clear objectives with strategies and tactics to support those objectives and measure outcomes.
“To add to that, it has to be really authentic”, says Games Global’s Allison. “It has to come from an authentic place across the whole business. The change has been slow but systemic change takes time. When I first joined the industry about 13 years ago, I walked into different businesses and didn’t see women in director or C-Level roles and honestly it never really occurred to me that that was a path for me at that time. It’s crazy to think about that now but 13 years on it has really changed in certain areas. Of course, there is still a long way to go, especially for the wider diversity and inclusion conversation and I think we really need to measure it and hold ourselves accountable.”
Lessons learned over the past 25 years:
The final question put to the panel and perhaps in some ways the most interesting was what was the single biggest lesson learned over the years. This is what each had to say.
Purdy: “If we remain customer-centric wherever we are and provide what works for the customer, we will be ok.”
Kemp: “We have to be cognizant of the wider world and not just our world. We have to stay connected to the outside world, understand it and adapt to it.”
Allison: “The importance of flexibility and openness and that change comes at pace.”
Akad: “To thrive through the years the one thing businesses need to ensure they are there tomorrow is that they have a curiosity and an appetite to learn each day.”
Walker: “Customer centricity and that change is always constant. Always be adaptable to that change, be brave and innovate.”
Continent 8 would like to thank all the panellists and Micky Swindale for moderating, providing a fascinating insight on the past 25 years, and what we can expect in the future.