IN-DEPTH 21 August 2018
Virtual sports betting roundtable
Five executives from industry-leading virtual sports betting companies offer their insights into how and why virtual sports are continuing to impact markets around the world, helping you to better understand its development and future possibilities
By Gambling Insider
Armenuhi Khachatryan, PO of Virtual Sports, BetConstruct
Kevin Reid, CCO, 1X2 Network
Martin Wachter, CEO and Founder, Golden Race
Steve Rogers, Chief Commercial Officer Digital Games, Inspired Entertainment
Steven Spartinos, Co-CEO, Kiron Interactive
In your opinion, what are the essential elements of any virtual game?
MW: At the very heart of any good virtual sports game is the players’ choice of betting opportunities and an attractive set of odds. The game needs to offer players with at least the same betting markets that they would normally find in the real sport and the odds should be presented so they can decide between different levels of risk and profits. It is also essential for a virtual sports game that the adopted format and duration allows for quick game cycles. Players can then complete their bets in very short periods of time.
AK: I believe the essential elements that take up the rate of virtuals are the realistic graphics and gameplay features. A wide variety of bet types and good UX features keep the good balance providing an exciting and engaging gameplay. It is vital to have realism in your games, since that way you can provide a life-like experience for the players. However, having gameplay features would add more attraction to the games making them more engaging from the players’ sides. The right combination of those two fundamentals prove what users actually want from virtual games.
SS: The virtual sports revolution began with virtual horse racing and dog racing, seamlessly slotted between real racing events and into quiet times of the day, originally labelled as ‘cartoon racing’. Constant enhancements and tailored content have, however, removed that label, making the games a popular betting product with punters and turning virtuals into a mainstream product vertical in sports betting operations.
Essential elements for any successful virtual game include realism of the graphics together with the excitement delivered through high frequency of game play. Further, the variety of betting markets that are on offer for the player combined with the attractiveness of the odds are key ingredients to a successful virtual game. Localisation of the games is also important to make these relevant in the particular market that they are being offered.
What are the big trends in virtual gaming at the moment?
AK: Nowadays, virtual sports are undoubtedly becoming more and more popular due to the fast pace of life. The biggest advantage of virtual sports betting is that you don't have to wait long before another event begins. Virtual sports games take place every three minutes.
Moreover, one doesn’t need to be a betting expert to play virtual sports, since anyone can win or take part without the faintest idea about sports betting. It's a new type of entertainment which attracts more and more people.
SR: Virtual sports are perfectly placed to embrace emerging trends including virtual reality and augmented reality. In recent years we have seen a surge in popularity of eSports in Y and Z generations, and there is certainly an opportunity for virtual sports to leverage this trend with the emergence of VR and AR technology; anything is possible in the virtual worlds that we create.
SS: Fail safe virtual offerings such as football, horse racing and dog racing are always going to prove popular but as demand increases, it is the addition of other differentiated and localised content, multiple event products and the addition of instant-win virtual titles that contribute to a differentiated product mix, essential for keeping customers coming back for more.
It is vital to be on top of what is happening in the industry especially as technologies continue to develop. The advances in mobile have been nothing short of remarkable, allowing for a more interactive and instant experience. Further, new and improved CGI technologies allow for a greater sense of realism and a more immersive experience.
MW: A popular trend at the moment is making virtual games available "on demand“, with players directly starting the games right after choosing their bets, rather than waiting for the games to start following a fixed schedule.
We are also witnessing companies engaging in a big competition to deliver the most realistic 3D graphics and computer effects, and when Goldenrace is constantly innovating in this field, we never forget that at the end of the day what really matters is players having a satisfactory betting experience. Having attractive odds, a wide range of betting opportunities and the players trusting that they have a real chance to win, is our main focus.
KR: New formats have come to the fore, such as tournament play which increases user engagement into the game and holds customers to the product. This benefits mobile play on these games where typically attention span is often limited. Virtuals will prove particularly useful to casino and racetrack operators in the US. Now that PASPA has been repealed, operators in New Jersey - and additional states in the coming months - are pushing ahead to quickly launch sportsbooks.
For those permitted to operate online casinos, virtuals are the ideal tool to cross-sell between casino players and sports bettors. Golden Nugget, for example, already offers virtuals, and as such has a database of sports bettors it can target straight away. This will prove hugely valuable in the race to engage sports bettors. Operators in other states looking to legalise and regulate the activity can also launch virtuals now to get the jump on their rivals.
What determines your choice of games/sports that you develop into virtual games?
KR: We’ll look for games and sports that players are familiar with. In Portugal, for example, football is like a religion and
people love to place bets on their favourite teams and players. But when the season draws to a close, virtual sports allow them to continue to wager. This helps operators to drive engagement and retention; players know they can always place a bet on football regardless of whether the season is in full swing or not.
AK: Creating a high quality virtual sport takes a lot of time and energy from any software vendor, as the development process is expensive and many times even complicated. Additionally, most of the operators want to have virtual sports with their own customisation. With this in mind BetConstruct has created their own virtual sports to help operators to become more competitive in their markets.
MW: To know what kind of sports you should develop next and for it to be successful is a bit like playing lottery: you never know if the players will like it. Nonetheless, we use market data to understand what real sports are most popular on each specific region, but still sometimes a game which is really popular on sports betting does not pick up well in its virtual format. When deciding whether to bring a sport to virtual or not is important to ask ourselves if we can create a virtual format that, is not only appealing to players, but also remains honest with the real sport.
SS: When it comes to working across multiple territories and individually regulated markets, operators are not only faced with technical, tax and compliance hurdles, but also the challenge of localising and differentiating their product and content to fit the landscape in question. By offering such a varied portfolio, Kiron is able to attract a wide range of operators, including those that are looking for something differentiated.
What role can virtual gaming play in supporting the wider gambling industry?
SR: Inspired’s virtual sports were initially designed to overcome the relative infrequency of live sporting events in betting shops but have since been developed to augment a live sportsbook offering for customers in venues, online and on mobile.
They work on a number of levels; providing filler content for sports bettors who are looking for a quick result on an uncomplicated sports bet between their normal live-sports betting patterns, but also in offering non-sports bettors a sports betting experience without the knowledge base required to make a more in-depth bet.
SS: Virtuals fit in with the instant gratification requirements of modern customers. With life-like graphics and realistic game play, virtual sports offer players the ‘thrill’ of their favourite sport, any time of the day when it suits them, complementing the excitement of betting on live events.
Modern-living has time constraints making it difficult to always make yourself available at the time of a live sporting event. Instead of having to wait for the race to finish or the match to end, with virtuals the result is almost instant, allowing players to place and enjoy a bet at their leisure. Millennials in particular with their affinity for gaming and love of mobile devices are a key target market for virtuals.
MW: Virtual sports betting allows for a younger generation of players to cross the gap between video games, eSports and other digital entertainment formats into sports betting. Beginner’s sports wagers can use virtual sports betting as a way to learn about the games, the betting options and improve their skills prior to jump into traditional sports betting.
KR: It must be remembered that in most emerging markets (with Latin America, Africa, the US and even Europe opening their digital doors to the activity) consumers lack trust in online casino products. These markets offer tremendous potential but can also be something of a minefield to navigate, particularly when it comes to the games players want to engage with. This is certainly true of random number generator (RNG) games such as slots, blackjack and roulette. This means that an education process needs to be undertaken and consumers be gently introduced to the RNG games that are so popular in more established markets. For many customers that love sports betting but are not so comfortable with slots and table games, virtuals bridge this gap as they are essentially a casino game (due to the RNG factor) offering the odds, markets and sports punters are familiar with. They transfer the punter from the sportsbook and into the casino in the hope that over time they become more inclined to try slots and table games.
In your opinion will virtual gaming eventually surpass real world gaming revenues? And why?
KR: Sure, customers love wagering on live sports, but the availability of virtual sports means players can always bet on demand. Despite wanting them to - for obvious reasons - I do however believe that though virtuals are a growing product accepted by more and more players every day, it will never surpass the amount of people wanting to bet on real sports and real events.
SR: I don’t foresee virtuals revenues superseding real sport revenues in the future; while the quality and realism of our products is ever improving, they will always be a supplementary product to real sports betting. There’s no particular skill required to bet on virtual sports – which, of course, often works in their favour to a certain type of customer – whereas placing a real sports bet requires knowledge of the form, odds, conditions and more.
MW: They most definitely will. The numbers in countries like Italy already show that virtual sports became one of the most popular games next to sports betting. Our metrics also show that in many other countries the volume and traffic on virtual sports is almost the same size as in real, and way ahead of any other gaming revenue streams.
SS: Virtuals now account for up to a fifth of over the counter revenues in traditional developed markets, the figures can be a lot higher in emerging markets, making them an important component of the sports betting industry. Based on the rapid growth and adoption of console and computer games among a younger generation, it is likely that real world sports will be surpassed in popularity by games with the younger generation. In this regard it is possible that gaming involving virtual games and eSports will exceed the popularity of betting on real world sports sometime in the future. This is, however, unlikely in the short to medium term.
AK: For about a decade virtual sports has been used as a way to fill a dead time between live sport events. Now they account from 30% to 35% of market revenues, making virtual sports one of the most important components in the internet betting industry. And the most intriguing part about this is that it accelerates steadily in many regions. The omni-presence of virtual sports makes it even more popular in the market. One can enjoy the real life-like virtual games anytime and anywhere in the world. Therefore, it’s safe to predict that it will eventually become the irreplaceable part of the whole online gaming industry.
Why would a punter prefer to play a virtual game rather than a real one? Isn't real always better?
SS: Virtuals were never designed to replace live sports betting or take away the thrill of a live event. However, the high frequency nature of virtual games, provide an exciting option for those looking for a quick ‘spin and win’ alternative. Virtuals offerings are also becoming more and more lifelike as technology continues to develop making them a viable alternative to real sports.
SR: The advantage of virtuals is the freedom and flexibility they afford to customers – we can run an event at any time of day, in any regulated venue or online site regardless of weather or other extenuating circumstances.
MW: I don’t think players see virtual sports as a replacement of the real thing, but rather a complementary gaming experience that revolves around their favourite sport; one they can play at any time of the day, every two or three minutes. When we look at a soccer game for instance, he will have the benefit to back his favourite team multiple times a day, and not only once a week.
KR: It is often argued that virtual sports are no replacement for sports betting, but that’s not necessarily true. Nothing beats wagering on a live football match, but where do punters get their fix in the off-season? Virtuals fill that gap in the market, bridging the gap between both verticals; they often sit in the casino lobby but appeal to the sports bettor. In addition to this, in markets such as some of the more obscure African leagues, betting on your specific team in a virtual environment is much more risk-adverse than it may be when betting on the real-life event due to the potential for match fixing. This then allows the leagues to be contested more fairly, but also allows customers the ability to bet on their teams in safety.