Stefano Sordini, CEO of NetShop Internet Services Ltd, talks exclusively to Gambling Insider about the growth of online gaming and what the future has in store for the industry after a difficult 2020.
How has online gaming grown since you became CEO of NetShop in 2004?
The number of online gaming companies has increased year by year. But due to the pandemic, most of our clients with sportsbook platforms have been heavily impacted. However, during these times when COVID has impacted the sportsbook industry, we were able to facilitate the use of flexible payment schemes and service some provisioning flexibility from our existing clients. So we have been able to extend renewal periods for our clients. Also, we were able to scale down services so clients could afford to pay for them. For example, if a client with 100 mbps internet connectivity couldn't afford it, we managed to decrease that to five mbps for a limited time, so it's more attractive and affordable for them while their business was not making any money.
How has the company adapted to the current situation?
We were one of the first companies of service providers in the online gaming industry that took early action, and we introduced a free hosting bundle to help companies switch from office working to home working, with a fully complimentary service for one month. Moreover, we’re able to facilitate discounted rates for those who have been impacted and have temporarily downgraded. So it was a scaling down of services for a limited time until they were able to recover.
And this was very important for our clients because the alternative option was to close all the centres down, which would bring additional costs for them. Their option was either to be facilitated with an extended grace period, perhaps for renewing the service and infrastructure, or close the servers down. And this would bring additional cost when they decided to open up again. So this was also something we were able to provide for them. The work at home bundle applies to, but is not exclusive to, the online gaming industry. It provides a one month free hosting service that a company may need to enable remote collaboration. This is something that we released very early when the pandemic hit Europe.
What other difficulties have you faced due to the pandemic?
We had to deal with the sudden increase in bandwidth consumption by the whole world, so this has affected our current capacity. We had to increase our bandwidth capacity in all our data centres to facilitate the bandwidth to our clients.
If you think of an ISP in the United Kingdom, during the times before COVID when most people were at work, the home internet bandwidth consumption was very low. When everyone switched back to home working and they were at home, you know, 24/7, their daily needs for bandwidth and mobile browsing increased, and it was the same with us. All of our customers have increased demand for bandwidth, so we had to readjust our forecasting and capacities to facilitate the internet usage for our clients on a data centre level.
Has there been any regulation in recent months that has impacted your progression?
Yes and no. The fact that most of the European countries and online gaming jurisdictions are into a mode of establishing new or updated, more strict frameworks, like Germany or the Netherlands, this has been one of the reasons that forced us to open up new locations. So we have new data centre locations in the Netherlands, Singapore and Hong Kong, and the decision for those locations has been derived from the recent updates in the online gaming licensing in Europe and Asia.
What do you think the future has in store for online gaming?
I definitely see a lot of new businesses coming up, mainly in the online poker and online casino side of things due to the heavy impact of COVID in the sportsbook sector. So B2B and B2C providers who were focusing on sportsbooks are now diversifying their portfolio to include esports, live casino and live poker. And of course artificial intelligence and VR in online gaming is something that has also made an introduction in recent years. In 2021, we will be able to see a lot more products from B2B providers integrating artificial intelligence for KYC and AML solutions. So I think this is where the online gaming industry will be in 2021.