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Entering new markets presents its own set of challenges, but navigating the ever-changing regulatory landscape within the global gambling space is something that Soft2Bet has become very adept at.
Having recently entered the Italian market, and with licences for Sweden, Greece and Romania acquired earlier this year, Soft2Bet’s General Counsel David Yatom Hay has had his work cut out for him as he lays the compliance groundwork for the company to continue its global expansion.
In a chat at the recent SBC Summit Barcelona, Yatom took the time out from acquiring new licences to chat with SBC Media about the intricacies of new market entries.
A complex process
It should come as no surprise that acquiring a new licence isn’t as simple as making a telephone call to the regulator and hoping they say yes.
Instead, there’s much more ‘behind the scenes’ work as legal and compliance teams ensure that their platform and products all meet the necessary requirements.
One of the key difficulties here, however, is that no two markets have the same requirements. That would be too easy. For Soft2Bet, this is where Yatom and his team come in.
He told SBC Media: “Entering any regulated market has its own unique set of challenges. These are challenges that you don’t get anywhere else; but this isn’t necessarily a bad thing. It fosters a sense of competition and pushes the industry forward.”
When entering a new market, the first hurdle to overcome for any platform provider is the technical requirements. This usually requires a number of tweaks to be made to a platform or products to ensure that everything remains compliant with the regulations.
Yatom advised betting and gaming companies to remain “agile with their offering” and keep in mind the overall product portfolio and how this is delivered to the end customer.
One key area that is important in every gambling market but is often subject to different technical requirements is responsible gambling.
He continued: “Responsible gambling practices need to be adjusted across different markets. Regulators tend to try to innovate within this space, but sometimes that can create challenges on the technical side of things and it can become quite difficult to accommodate within your platform.
“In my view, I do think that regulators from different markets need to speak with one another and implement uniform responsible gambling practices. Because at the minute, some countries require deposit limits, some have advertising restrictions, some have both and others have neither. But if there are set requirements across the board, the specifics can then be tweaked. If you try to innovate too much, it can cause difficulties for the platform providers and operators alike.”
The second consideration that must be made is marketing. As we’ve seen in a number of jurisdictions around the world, many regulators have chosen to introduce restrictions – some more stringent than others – on operators looking to advertise their products.
Yatom said: “On the marketing side of things, things aren’t so easy either. I have a lot of criticism around regulators that completely ban the ability to advertise. I appreciate that there are certain situations where you can advertise, and when there are occasions when it needs to be restricted.
“But requiring an operator to acquire a licence and then prohibiting them from advertising their service is not right. It’s like encouraging someone to buy a car but then forcing them to remove the wheels. Or telling them that they’re not actually allowed to drive the car. It doesn’t make sense, does it? Instead, have confidence in the operators to act responsibly and give them the tools to do so.”
Bringing something new to the table
Once you have navigated the complex regulatory requirements, gambling companies must then consider how they can stand out from the competition. And in an industry that is becoming ever-more saturated, this is increasingly important.
To achieve this, gambling operators may work with platform providers to integrate new and unique products into their offering.
For Soft2Bet, it is of the utmost importance to work alongside its partners to create more bespoke products that will elevate the overall player experience. One such example of this is Soft2Bet’s gamification solution.
Yatom continued: “From my own experience, when entering a new market, you want to be different, right? We offer our clients something that is always unique, rather than just rolling out a template that is the same for everyone.
“We offer gamification which enables our partners to elevate the experience for their own players; we hope that the people we present this offering to will also find this very interesting.
“We have statistics that show that gamification can help increase GGR by 60% and retention by 80-90%. This is a huge jump. When you present this information to operators in a clear fashion, there is huge demand for this type of product.
“To stand out, you really need to be able to show the market something that is different. We don’t just want to provide something to create a bog-standard casino website, we’ll have a play around with it a bit.”
Looking at the North American market, and the US in particular, current regulations do not yet cover gamification. But as more markets open up to regulated online gambling, the Soft2Bet General Counsel explained that gamification can act as a “great tool for player retention”.
A trend that Yatom has also identified across the US market is the rise of social gaming, something that he believes can act as a complement to gamification.
“What’s interesting about the US now is the prominence of social gaming. This is something that current regulations don’t actually cover, so it’s kind of open to everyone,” he said. “Our gamification features are not that far off from social gaming features, so we’re hoping that we can leverage this for our future operations in the US.”
The Italian Job
The day of the interview with Soft2Bet just so happened to coincide with the company’s expansion into the Italian market.
The entry, which follows on from the acquisition of a company that holds an Italian gambling licence, will enable Soft2Bet to deepen its presence with regulated European markets.
Italy has long been known for its strong retail heritage, so this may present a unique set of challenges for many companies that are online–facing.
On the flip side, Yatom noted that without significant changes to the existing regulations, it may be difficult for those operating in the land-based sector to transition into the digital space. He said: “One of the major advertising paths within the Italian market is the retail shops. You cannot simply disregard the land-based betting shops in Italy, unless of course there are significant changes to the regulations.
“The retail betting shops are a very, very important acquisition tool for gambling operators within the Italian market. But unless we see some changes in that regulation, I don’t know how, or if, these shops would make the transition into the online space.
“The Italian market is a very promising, yet very complex market. It has come a long way in terms of regulations over the past few years.”
Going international
In a similar fashion to the last time SBC Media spoke with Soft2Bet, this isn’t the only market entry on the cards for the remainder of this year.
The company doesn’t just have one licence application in process either – instead, Soft2Bet has grand plans to take its offering further into Europe and North America in the near future.
“Obviously we’ve just acquired our Italian licence for both B2B and B2C operations, which is fantastic news for Soft2Bet. We’re looking to go live by the end of this year. Immediately afterwards, we have plans to enter the Ontario market too,” Yatom concluded.
“It’s been a long application process, but we have a licence for Germany coming up, which will be well worth the wait. You have to trust the process on these licence applications, you cannot simply rush into a market. Our Portuguese licence is also pending application.
“I think since we last spoke, the most exciting news is that we are expanding into the US. We’re already in the process of making sure we have everything we need to enter the market. At the moment, we are very focused on specific markets and verticals within the US.
“The idea, for us, is to be able to showcase our technology to existing operators so that they can benefit from the gamification features that we have to offer. Essentially, we want to tell these operators what exactly it is that they’re looking for. We want to be the market leaders on that front and to showcase that we’re making the gaming experience much more fun.”
