- Short-term mitigation plans could shape up a new industry on the long term
As the iGaming industry is adapting to the live sport events shortfall that has now taken the iGaming industry by storm, not everything is doom and gloom. Alessandro Fried, BtoBet’s Chief Executive Officer, discusses the interim measures that operators are adopting to mitigate the gap created in the sportsbook vertical, and how eventually the industry will morph into a more diverse scenario based on the decisions that operators are taking at the moment.
In what way will the current situation impact the industry?
Everyone is expecting live sport events to surely resume shortly. They will be back, and with them the sports betting vertical will pick up where it left and bounce back. At this point in time the Italian top league clubs are all set to resume their training in a couple of weeks, whilst in Germany teams have already resumed with their preparations to final sprint of the Bundesliga.
However, it is true that the industry has undoubtedly been impacted. No one has ever imagined a scenario where live sports on practically a global level would be made unavailable. The pandemic and its consequences, with governments and authorities alike putting in place extraordinary measures imposing social distancing in order to curb the outbreak, has disrupted mostly those bookmakers who throughout the years have based their business activities on a retail network. The same applies for the retail casino outlets, with Las Vegas as the primary example, literally closing down its doors for business.
It is with this in mind that I expect a major shift in operators’ strategies in the immediate to short term, with retail licensees seeking to migrate their business activities to the digital mediums, thus also mitigating for any future downturns in terms of retail customers.
Turnover from live sportsbetting is a major problem for most operators. However, have other verticals seen an increase in player engagement?
The current circumstances related to live sport events has had its major toll on those operators who have based their offering primarily on live football events, with the top leagues generating an ever increasing revenue stream as this form of gambling is nowadays being considered as an extension to the events themselves. Such are the number of followers that these events produce. However, the scenario has changed abruptly, and live sport events that on a daily basis averaged into hundreds of events have now been reduced to merely a handful. Live betting now comprises of football events in Belarus and Nicaragua, table tennis in Russia, and racing from the United States, Hong Kong and Australia. Which all in all amount to a rather limited content portfolio and will not make up for the loss of revenue that other major sport events generate.
Undoubtedly this translates directly to a significant loss in terms of turnover, with many industry experts expecting as much as 70% or even higher in terms of loss. On the other hand, and this needs to be highlighted, operators and suppliers alike have been agile in identifying new means of how to diversify the players’ engagement across a broader portfolio of verticals.
One of the major verticals that has seen a major bump on the immediate term has undoubtedly been virtual sports, which nowadays is accounting as much as 40% in terms of operators’ turnover. The same can be said with reference to the esports vertical and online casino vertical, with certain operators doubling their turnover in these verticals over a relatively short period of time.
How will the current situation impact the industry for the short term and the long term?
I reiterate that live sport events are resuming sooner rather than later. And I expect a high player engagement, if not actually higher, once the situation normalises itself. Does this mean that the industry will resume in its steps before the Covid-19 pandemic ensued? I highly doubt so. Even though there are few historical episodes which provide us with the required data as to how we will emerge from this situation, I expect the new more diversified content approach endorsed by the operators to stick also for the long term.
Operators are now seeing the opportunities that reside in other verticals. Since sport events have been cancelled, sportsbetting players have turned their focus to alternative betting products, be they virtual sports, esports, and online casino amongst other verticals.
In today’s context, I expect this “cross-selling” to other verticals to become even more determining as we go forward, because the current situation will surely have a lasting effect even on people in terms of their gambling behaviour.
I also expect retail operators to adopt a diversification of their business strategies and move towards the online channels. Does this mean that the brick and mortar experience will be a thing of the past? Certainly not. Retail betting shops and casinos still offer a betting and gambling experience in their own unique way. On the other hand I do envisage an expansion to the digital channels to complement the retail offer, with operators necessitating of a diversification of their revenue stream whilst also being better placed to retain their current fold of players, and acquire new customers through targeted marketing campaigns.
You have mentioned that operators are opting to “migrate” their players from sportsbook to other verticals.
Sports betting is an activity that nowadays is considered by the players as an enhancement to the real live action. One should also state that the vast majority of players bet on the teams, leagues, and different sports categories which they usually follow, and of which they have a good knowledge and understanding. There is an emotional attachment to sports betting, which in itself is driving operators to seek creative solutions in order to close the gap created by this “live sports void” for the short term.
Not only are they integrating new, innovative and alternative vertical content. They are going to great lengths to ensure a high level of player engagement even on the sportsbook itself, by exploring and expanding markets – such as the props market – that have until now played a rather minor role in the sportsbook vertical.
Most of our partners are realising the benefits that this expanded sportsbook content can have also in terms of retaining their fold of loyal players.
More importantly nowadays we are assisting operators pushing in their bid to create and develop new vertical markets. This is a further indication that eventually we are going to have a better, and stronger scenario, where sportsbook will still reign supreme, but strong gains will be registered in other verticals as operators will seek to diversify ever more their revenue stream.
How is BtoBet assisting its partners in mitigating the short term effects, and possibly putting in place a strategy for the longer term?
For the past months BtoBet has focused on boosting all its verticals in order to place all operators in the position to determine which strategy they want to undertake for their target players, whether they want to focus on sportsbook, online casino, lotteries, virtuals, e-sports and fantasy sports.
Nonetheless throughout these times we are still investing and pushing to provide bookmakers with the best range of alternative vertical content, whilst at the same time keeping focused on delivering a long term plan ensuring our partners will reap benefits by adapting a player-centric approach.
This is why we have put a strategy for the short term period assisting all our partners with the introduction of special content including:
- a daily selection of the most important horse-racing events,
- a new and engaging novelty bet section,
- extended E-Sports content,
- a boosted odds fantasy league,
- and a tennis game based on the outcome of more than 1 million matches.
We will also offer all our assistance to bookmakers and other operators in diversifying their business model by integrating a wider content for the Virtuals, with games from six leading industry providers natively integrated in the Btobet platform; an Online Casino portfolio consisting of an extensive list of over 8000 games from over 100 providers; and a wide selection of Lotteries, Instant Lotteries and Jackpots, with prizes up to €150 million.
Our past investments have also seen us launch a new retail solution, intended to not only boost the betting experience at the brick and mortar level, but also aptly enable operators to transform their non registered players into registered customers through a rapid registration process.
I am confident that the current sportsbook shortfall will be just a small blip in the radar for the majority of operators who optimise their business strategies, allowing them to reap major revenue increase opportunities from a wider verticals portfolio on the long term.