‘The right way of doing things’ – kwiff keeping pace with shifting UK goalposts

At a time when the forthcoming regulatory review could shake the UK betting sector to its core, predicting the future has become a much-desired skill for operators with a stake in the country. 

In the absence of a betting industry-specific crystal ball, firms such as kwiff have had to make their own judgements on what the future may bring, and ensure that their platforms and business models are sufficiently prepared.

The future of bread and butter Britain

“We have to make sure we are adapting and flexible enough for whatever the White Paper contains,” kwiff CEO Charles Lee explained to SBC at ICE London this month, breaking down how the firm has met challenges and kept pace with regulatory and market changes.

“There’s been a lot of stress and a lot of issues, some are pulling out from the UK and looking at soon-to-be-regulated markets as more attractive. At kwiff the UK is our bread and butter, it’s where we were founded and we want to be here for the long-term as a sustainable business.

“Anyone who holds a UKGC licence and wants to do things the right way are the good guys, we don’t want to push a black market with ineffective regulation, and kwiff want our customers to play responsibly with us.”

After nearly two years in the pipeline and having recently been delayed yet again following another departmental shakeup at Whitehall, the Gambling Act review has created a uniquely challenging environment for UK operators.

To keep up with this, kwiff has utilised a range of verification and affordability partners, Lee explained, which he added has not been the cheapest approach but is ultimately ‘the right way of doing things’.

As it stands, the best thing the industry can hope for in Lee’s view is for effective regulation that protects players but at the same time is not overly intrusive, whilst enabling operators to ‘get the right data’ to assist with this.

“The best thing is for people to bet with licensed companies, whatever comes out must protect players – is three months of bank statements the best way to do this?,” he reflected on the 16 month review.

Whilst the UK is the firm’s ‘bread and butter’, however, it is not the only focus, and although kwiff remains steadfast in its determination to stay in British business, there are of course other markets that have caught its attention.

Africa and LatAm – the new focal points

North America has become a major site of interest for European betting firms, but Lee noted that many are ‘getting burned’ by costs of competition in the country, and are looking elsewhere. 

One of those elsewhere regions is Latin America, where some huge markets are looking to regulate their betting sectors, unearthing huge potential for the companies with the right approach. 

“We’re starting to grow in Brazil and are putting some effort into marketing and education there,” kwiff’s CEO continued. “It’s a competitive market, the demographics are amazing for operators and regulation is on its way.

“It can be expensive, you can almost view it in the same way as the US – you need to avoid a marketing war. You’ll see people looking at other territories if they get burned in the US, and I see operators going towards Latin America as an alternative.”

Back on the other side of the Atlantic, SBC was keen to learn about kwiff’s experience of Kenya – described by the CEO as its ‘longer-term play’ – as more and more major firms, such as 888 and Entain, are drawn to African opportunities.

“People are looking to expand and make an impact – LatAm and Africa will be a key focal point, but only the good businesses will succeed,” he said.

“Many will come in, spend a lot of money and not see the impact – the ones with the right strategy, a good core business and the right tech will adapt and serve players in the right way.”

As with the UK, however, regulation in Kenya requires a forward thinking mindset, even more so in fact due to regular changes in government – and therefore regulator changes in gambling policy. 

Lee continued: “It needs a flexible platform and new tech, to adapt to any conditions. There is a lot of lobbying in the country – it’s not the most stable, but there are advantages. 

“The good thing about the regulator is there is a good point of contact, you can understand what they want to do and the likelihood of it happening, and can prepare.”

North America …. not just yet

The revenue, profits and state betting handles reported from the US are huge, as monthly and quarterly figures repeatedly show – but so are costs, particularly in areas such as marketing. 

Home to a plethora of huge names with even bigger budgets, such as the DraftKings and FanDuels of the New World, North America may be on kwiff’s radar, but a move is not on the table just yet.

“The land grab is still ongoing, but more are getting burned by it and we’re seeing them looking to other territories and other continents, because ultimately profit is important,” Lee remarked.

“You can have that position for a certain amount of time but eventually you’ve got to make some money, and that time is now. 

“We’ve heard talk about profitability by the end of this year, but it’s going to be tricky with their spending, and so we’re going to observe for a while.”

From its UK base, kwiff has earmarked Maryland and Pennsylvania as states ‘of interest’, but like many other firms, it is the US’ neighbour to the north that has caught the operator’s eye. 

Ontario has a regulatory model based on ‘partnership’ which kwiff finds intriguing, and the company has considered a licence application in Q4 2023 or Q1 2024, Lee explained, although acknowledging that ‘getting surprised by different things’ during the process.

For the time being, observation remains the focus, he said: “We’ll scope it out, understand where it stands, the cost and what player values can be achieved and how to acquire players. 

“It looks promising from what I’ve seen so far, but it takes time – you have to give the regulator time to bed in, as they’re new to it as well. 

“In Europe people have been working with regulation for a number of years but it’s new over there so I understand why it’s chop and change a bit. That’s not great for an operator trying to enter the market, so we want it to stabilise before we go in.”

kwiff controlling its destiny

Taking its supercharged betting offering worldwide has rested on two core pillars of kwiff’s business model – a marketing and engagement strategy, coupled with its in-house tech platform. 

Making international comparisons, Lee noted that the UK and Ireland have many similarities that made cross-border operations easy, but in Kenya and Latin American there is a very different story.

“We spent a lot of money in the early days educating players on what the supercharge is, and are still in the education phase in certain LatAm and African markets,” he said.

“We are now doing that more with our tech and the frontend, customers can see a ticker and see what superchargers other players are getting and see the heartbeat of a player, along with traditional CRMs and external engagement.”

Once education and brand awareness has been established, firms will begin to see higher player revenues and a subsequent impact on revenue from African and Latin American markets. 

This is not the only tool in kwiff’s arsenal, however, if anything the in-house technology platform is the company’s pride and joy, and the most important asset behind its international activity.

Although acknowledging the value of third party tech providers and the costs of developing an in-house stack, in the long-run the benefits far outweigh any hurdles and expenses.

“We set out from the beginning to deliver something different to other customers. We’ve seen better engagement numbers and improvements across all KPIs and metrics because we ran our platform. 

“As long as you’re patient at the beginning and give yourself time, and make sure you’re not expecting the world to change overnight, you can build brand loyalty, have all those KPs higher than other providers who sit on third party platforms that are difficult to adjust.

“There is the maintenance of it and the frustration is that it’s your problem, but the benefits are that it means you can choose what you want to do, control your own destiny and localise your product.”

Central to kwiff’s tech is flexibility and adaptability, stability and support for scaling, Lee reiterated, but as noted at the start of the conversation, so is timing.

In the same way that kwiff has been observing North American developments, Lee noted that operators that time their moments well in the tech space will be the ones to benefit.

“We’re going to see more deals get done and M&As in the tech market,” he concluded. “If you want a truly valuable business you want to run your own tech, operations and marketing. You don’t want to be a marketing business sitting on top of a betting platform. 

“We’ll see the impact on share prices. There are truly strong businesses that are biding their time and are built on solid financial ground and they will thrive.”