The speakers on ‘the future of sports betting – era of inflation’ panel, part of the SBC Summit Barcelona’s Leaders Track, share both an optimistic but foreboding consensus.
The future of the industry, with a focus on Europe and North America, remains ‘very bright’ – in the words of Betsson AB CEO and Founder Pontus Lindwall, but headwinds are visible on regulation, tech and above all inflation are present and require clever navigation.
The global view
Lindwall set forth his argument that there is ‘a very bright future for sports betting’, reflecting on a discussion he overheard back in 2008 in which a commentator asserted that ‘there is no chance you can satisfy more than three territories…’ Betsson is now active in 20 markets.
“We’ve been working on that for a long-time, we are going to crack on in the same way we have so far,” he explained.
“If you look back there was not much live betting only pre-match, whilst now that offering is widening. Maybe there could be combinations and betbuilders in live betting.
“Customers want to be able to find the offering they want and place that bet – it’s as simple as that. Customer experience is everything and we have come a long way but there is more to be done.”
Meanwhile, Novibet CEO George Athanasopouolos’ main advice for operators was to invest in tech and value their products, and focus on how said products can be internalised when offered.
He said: “What will make a difference to the end customer is if you can understand the excitement you are giving to them, and the only way you can do that is if you have the platform technology.
“What we believe is the future is companies that have a deep understanding of the three pillars of online gaming – the future is bright, we are seeing new regulated markets and the US is opening.
“We are looking forward to teaching Americans about maximising product, profitability and customer experience.”
Less is more?
Not all operators are as wide ranging as Betsson, however, as Kwiff CEO Charles Lee and betFIRST CEO Alexis Murphy noted, discussing the topic from the perspective of small operators, and praising the benefits of focusing on one market.
“We are seeing good organic growth and opportunities, and we are going to focus on this,” Murphy remarked.
“I think the reality is that although one might think that it is generically the same product, whether in Belgium or the US or another country, but the complex tapestry of local regulations, cultural affinities and different sporting preferences – running a local business has a degree of complexity to companies such as ourselves.”
Meanwhile, from the tech perspective, Lee argued that there is a distinct advantage to channelling expertise into one market, at least to begin with – citing Kwiff’s own experience of building its own in-house tech platform.
“You have to focus on one technology to begin with, you can’t go into 20 markets immediately,” the Kwiff CEO reiterated to his fellow panellists.
“Focus on a market, really localise it, get the right people in , the right technology and product and the right partners.”
That is not to say that either the Irishman or Englishman failed to see any benefits to multinational operations – Murphy noted in particular that this can help from a brand and marketing perspective.
“There is an advantage for multinational brands, and the Netherlands is a good example of that,” he said. “You can be banned from sponsoring a football team in the Netherlands, but if you do so in Spain for example that will benefit back there anyway.”
On the other hand, Lindwall observed that there are hurdles to international operators which domestic ones either do not encounter or experience on a diminished basis.
Specifically, he stated that being active in numerous jurisdictions takes up product development time, reflecting that ‘it’s tough to be operational in so many markets’.
The elephant in the room
Despite this, Lindwall remained steadfast in his belief that the betting industry’s future is bright, addressing the elephant in the room of inflation, as rates soar across numerous countries.
The CEO held particularly strong faith in the continued diversification of betting, predicting that in the same way the industry has broadened over the past decade, it will continue to do so over the next five to 10 years with positive results.
Ultimately, the key selling point of betting is its entertainment value, something which will not diminish as inflation rates rise, and though costs may increase for operators, LIndwall maintained that ‘in general we will be fine’.
“I cannot predict the future, but I know that if I go to the shop to buy milk or butter it is more expensive than it was half a year ago. Interest rates on loans are also going up,” he added.
“This could have an impact on our industry, but we have gone through tough times before – 2001, 2002, 2008 – and have proved that our industry is more resilient than others. “
Agreeing with Lindwall, Niels Onkenhout, Nederlandse Loterij CEO, noted that sports betting and casinos are ‘entirely an entertainment industry’, and so should show some resilience.
He held some optimism for the economic future, saying: “This is a time to accelerate your business, and we are uniquely positioned to do that.” predicts that there will be a different economy by next summer.”
The spectre of politics
Onkenhout’s main focus was on political developments – he offered insights in particular into Europe, as well as market developments in the Netherlands.
In the Netherlands the regulatory spotlight on betting has widened since last year’s re-regulation, and he added that ‘formidable competitors are coming into the market’, meaning ‘the battle is on’ for Dutch competitivity.
On politics, he noted that decision makers in Europe are concerned that the threshold for young people to start gambling is steady lowering, presenting doubts around gambling’s social responsibility status.
“I also see a bright future for sports betting, but regulators continue to tighten the rules and look to other countries to see what they can apply on their own,” he said.
“This is driven by the opinions of politicians, there will be continued pressure on sports betting and casinos in particular.”
“The future will be technology driven, focused on customer experience, such as payments. We need to drive and insource technology, as our products will be generic and we will be pressured by the regulator.”
Concluding, he remarked that operators should ‘tailor their offering to a specific audience’ and offer alternative products, to differentiate themselves, set themselves apart and present their products as a special, unique offering to consumers.
“This is a time to accelerate your business, and we are uniquely positioned to do that.” predicts that there will be a different economy by next summer.”
Lastly, on the other side of the North Sea, Lee examined developments in the UK, where the Gambling Act review judgement is still being awaited after nearly two years in the political pipeline.
“It’s incredibly challenging,” he said. The regulator is trying to do the best job that they can. They are trying to protect the player, generate taxes – if they don’t get these they can fine people – and prevent the black market too.
“We have to cross hurdles, and the regulatory framework that is there takes up a lot of time, and it is frustrating.”