Ismail Vali, senior consultant for iGamingLeaders.com, has authored an exclusive three-article series for CasinoBeats. The Three Acts of Gaming explains how Las Vegas set the blueprint for the first and second acts, or eras, and the lessons both Vegas and global resort gaming can teach online gaming as we move through the third.
Entering the final Act, Vali focuses on online gaming and the challenges common to all aspects of gaming as the sector continues to evolve and mature.
Act Three: Online gaming – The Resolution?
Beginning in the late 1990s, all online gaming brands grew out of a single product specialism in one gaming vertical. Over time, through acquisition and consolidation, most, if not all, igaming brands became multi-product portfolio operations, featuring sports, casino, live casino, live or in-play sports, slots, poker and bingo.
Implicit within this evolution from specialised, single-product operations to multi-product, branded online offerings, is the influence and leveraged help of the B2B sector. The necessity of suppliers like Playtech, Microgaming, Scientific Games, Evolution, Kambi and NetEnt, from majority example, is not to be under-estimated across the Story of Gaming – to miss the wholesale reliance that any branded igaming operator essentially has upon any, and often many, of these igaming suppliers would be, at the least, foolish.
The lure of increased product advantages and the ability to cross-sell hobbyist players of one product into generalist gamblers of many products has been the key theme of the last decade of igaming, reaching its apex, perhaps, in the summer of 2015, with a season of records made and broken in igaming. Bwin.party, once the world’s largest publicly traded online gambling firm, was sold to GVC, the owner of Sportingbet and ParadisePoker, for $1.7bn, trumping a rival bid from casino kings 888 Holdings.
Other firms announced mergers of near equals: Betfair and Paddy Power, Ladbrokes and GalaCoral (the merged entity soon after purchased by GVC in 2018). All this M&A activity played out in the shadow of Amaya’s debt-finance driven, David-buying-Goliath transaction of summer 2014 that saw it acquire PokerStars (now part of The Stars Group).
As important as funding was to the development of these transactions, so was the availability of product – to underpin the cross-sell promise and potential that investors and creditors had been sold upon. To product, the B2B suppliers were, and remain, fundamental. In particular this is due to their ability to easily integrate into any legacy system, and their affordability, being largely paid for “off future revenue” in the form of royalties and revenue-share agreements.
Hopefully, one can already begin to see the obvious parallels between the igaming of very recent history, with the lessons from Act 1 and Act 2. The indelible effect of Wall Street financing for the Las Vegas mega-resort era is analogous to the London AIM-listing financing of many of the trailblazer igaming brands like SportingBet and its subsequent owner, GVC Holdings.
From initial single-product specialism, these entities wrote their own destinies, alongside London AIM and eventually London Stock Exchange-funded growth, to create holding companies that are, effectively, igaming mega-sites.
Epilogue – The Three Problems of Gaming
Earlier, I touched on gaming’s two key problems – a product problem, since all our games are the same; and, a perception problem, due to the shadow of the vice industry label we used to be known by.
Both of these have solutions, worked out across Acts 1 and 2, with resort gaming never selling gambling but instead The Experience, to solve the product problem. Resort gaming
fundamentally removes (most of) the black market, organised crime and other negative aspects to emerge a reliable, significant and predictable source of taxation revenue for local and national governments and societies, hugely improving the industry’s perception problem overall.
Online gaming, in recent times, however is potentially at risk of unleashing a new, third problem: a player problem.
The matrix below details how the gaming business has evolved over time, across the different acts of gaming, with a particular focus upon the engagement outcome of an average adult player’s experience with the industry in each act:
Resort gaming maintains the Experience as the pre-eminent engagement outcome for a
player, while igaming is adding complexity to what used to be a simpler relationship between the industry and players. As igaming further evolves and utilises technology to make interaction ever more viable, across more channels, at more times, the scarcity that drives a huge amount of the mystique, interest and thrill of gaming is at risk of being lost.
This occurs at the same time as player interest dwindles, particularly among younger generations, due to too much choice – too many products, sites and apps – and with our offerings competing alongside the gamification dilution brought about by social media (freemium), video games (loot crates) and other “Gaming Lite” wannabes.
“My biggest concern is for the players. Their enjoyment, desire to stay and play – and their loyalty potential“
My biggest concern is for the players. Their enjoyment, desire to stay and play with one or more brands, and their loyalty potential when faced with top-down regulation that fosters promiscuous new account opening (see the incoming Swedish regulations, with one time bonuses for new accounts only). In addition, there’s poor performance by the industry when it comes to promotions and events that matter. What will be believed and engaged with after so many years of “100% deposit bonuses” that weren’t as they appeared and offered incentives such as free-to-enter £100m challenges, that were
never, in fact, won by any player, nor offered any cascaded value for just taking part?
If the anecdotal views of average players across online forums are taken at face value, many believe such schemes and sales promotions were actually designed to be “unwinnable” to begin with.
The point being, some players need to win at our products and especially via our promotions to sustain belief in us as an industry, and the bigger the promoted offering, the more that the winning needs to be seen, heard and remembered publicly, across all promotional channels available to us.
We do well as an industry when we do what we say, we do it responsibly, and we do it wherever legally permissible.
The legal challenges that have allowed us, across the Three Acts without exception, to enter, return or remain in any market, with as many product verticals as we have today, only come our way when we, as a united industry across bricks and clicks, pay attention to playing the long game – and obsess over the one thing that creates and sustains a positive public perception more than any other: The Player Experience.