What are the main differences you have to consider between land-based and online?
Sargis Poghosyan: Market solutions are mainly divided into land-based and online channels, which offer various products and interesting opportunities. If we take from the legislative point of view, in many countries they have different legal restrictions for both online and land-based channels, and the main point for the company is to be able to set different restrictions and rules for these two divisions. From the players’ standpoint, naturally these two channels are offering different experiences, even if they show the same products.
Ebbe Groes: The most basic difference is the existence of anonymous betting. Not technically difficult to handle, but a massive difference in what you can do with the product, say doing player limits, game recommendation, bonusing as mentioned above. Anonymous retail gambling is one-size-fits-all and rather primitive. Next to that is the whole dimension of betting shops, with separate reporting, tracking, features. That comes with a long list of retail specific features, none of them tricky, just time-consuming.
Martin Collins: The one major difference between retail and online is the ability to get up close and personal with the customer. That ability to really know what the customer likes to drink and what they have been up to that day makes a massive difference when driving loyalty. If you can capture both via a seamless solution, you can utilise that loyalty in an online environment, which has been built in retail
Stuart McCarthy: Aside from the obvious considerations around RTP (return to player), staking and spin times and how that impacts gameplay, as game builders we also have to take into account how a game sits in its environment. You are no longer building a game that is designed just to be enjoyed on a mobile phone or within the comfort of home. These games have to resonate in betting shops, bingo halls, cafés and truck stops; and from an audiovisual perspective the game has to pack a punch.
What are the regulatory challenges with such a transition?
Sargis Poghosyan: The development of gambling in different countries of the world leads to different legislative solutions, within the framework of which BetConstruct must meet the standards. Most countries try to offer their legislative solutions to the market, which causes difficulties in the “go to market” process. This means that long-term solutions to enter a new market are not entirely appropriate and the company must respond quickly. With bigger product portfolios and more than one targeted channel, companies will definitely feel the pressure to deliver in all instances.
Ebbe Groes: They are fairly low. In most countries, the online regulation is substantially more demanding than the retail regulation. The most important example of this, of course, is player recognition. Only very few countries demand any sort of centralised player registration for retail gambling. As a result, the classic online player protection mechanism is largely absent. Over time, I’m confident this will change, that operators will be required to monitor player spend across channels. This will place a burden on providers of retail while online providers will have an advantage. Regulation, thus, is less of a challenge and more of a driver towards true omni-channel solutions.
Martin Collins: There are challenges with regulation in new markets whether there is a requirement for an omni-solution or not. The majority of regulators have their own take on how their framework should work to protect players and, thus, there is very little consistency across markets in Europe or US states. Nonetheless, it is vital to be aware of how regulators view the three pillars of our omni-solution: registration; wallet; and loyalty. If there are restrictions in these areas, we need to ensure the offering falls in line with the requirements. For example, in some jurisdictions, the ability to move money from retail to online is forbidden, so we couldn’t offer that particular solution.
Stuart McCarthy: Regulation of European online markets is happening at pace, often following the templates laid down for retail. In this respect, we are finding that the amends we are already making to meet online regulation are also applicable, or similar enough not to present a significant challenge.
Why have you made the transition to an omni-channel supply?
Sargis Poghosyan: The gambling market is constantly expanding and technological development is forcing companies to compete more aggressively. Our organisation has grown a lot over the years. To comply with the wishes and needs of operators who trust our technology, we develop solutions in different directions and omni-channel supply is a very important branch of development. Such an approach, of course, leads to many problems that need to be addressed.
Ebbe Groes: Going from online to omni-channel is a natural step. We signed several land-based clients and have discussed ways to integrate our online solutions with their retail. While one can certainly make some integrations, it quickly becomes clear it leaves much to be desired. True omni-channel must, by necessity, originate from a single system with multiple channels, not by patching together separate systems.
This way, all the cool stuff will come along easy; the joint odds management and risk management are obvious, but the most important part is player experience. We see the importance of retail as an acquisition and support tool, since online play is becoming increasingly dominant. Disconnected platforms are a barrier for operators to maximise the opportunity of their retail estate. To make a true difference, we provide a seamless platform with player management and promotion tools, which can help transition retail customers into the online space.
Martin Collins: Retail to online has been a key component of our strategy since before 2018. We realised the overall market share for online in the ‘overall’ gambling market was increasing year-on-year. Coupled with increased regulation, this would lead to large established retail brands seeking a route into the online market, while still being able to harness the benefits of what they had built in retail.
Stuart McCarthy: We see this as a natural extension of the Yggdrasil brand. Over the past few years, we have had many requests and approaches from partners with significant retail presence looking to bring our games to market. The stars have now aligned with the right partners for us to do this in a really meaningful way.
Which markets (geographically) are currently displaying commercial appetite for an omni-channel supply?
Sargis Poghosyan: There are quite a few markets that offer great opportunities: the expansion of the gambling industry is constantly opening up new markets, new opportunities. I will mention two markets that provide a good chance of growth for software-providing businesses: the US and Brazil. Being one of the largest markets in the world, the US is a newly regulated online market that offers a huge opportunity for both online and land-based solutions. Brazil is also in the process of drafting a new regulation, it will be a very big market for land-based solutions. Why different solutions for different markets? There are several reasons why one market is a big opportunity for omni-channel supply and another can handle just one. The first reason is the cultural thinking of the players: in some regions, some are more accustomed to on-site betting in brick and mortar venues. Other markets have well-managed and diverse online payment channels and systems, so naturally the players are more keen to play via online gaming and betting.
Ebbe Groes: All regulated markets. Of course, omni-channel is not restricted to sports betting shops. Self-service betting terminals are on the agenda as well, as are lottery outlets and account top up stations. The exact forms differ by country, but omni is relevant everywhere.When one discusses omni-channel, a dimension often overlooked is product. Land-based gambling tends to have an even more strict product separation than online gambling. Roulette and blackjack tables vs slots machines vs sports betting. Our ambition is to unify on products as well: Omni-channel and omni-product!
Martin Collins: Covid has undoubtedly accelerated the process of retail moving towards online and, consequently, there is no single market I could single out that would have the greatest commercial potential. Any retail concern in a regulated market, with a loyal customer base and solid ‘brand equity,’ should certainly consider the move to online as a potential additional revenue channel.
Stuart McCarthy: There are many well-established omni-channel markets out there to tap into. Our first foray into omni-channel is rolling out this year in Finland with Veikkaus, delivering games to their massive estate. From there, we will then see how this develops further for us. But it is clear there are plenty of opportunities to explore.