While borders, countries, cities, houses, and people are being shut down, the only place unaffected by the virus is the World Wide Web. But how safe is it to self-isolate by default through cyberspace? What’s going on with the online gambling industry at large and all its sectors in particular? Read on to find out what is to be expected from the points of view of everyone involved.
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FROM NONCHALANCE TO QUARANTINE
Only a few months ago, the novel crisis was largely considered to be a Chinese problem by countries further west, who didn’t believe the virus posed a serious threat. However, as time passed, the number of cases jumped from tens to hundreds and from hundreds to thousands, gaining speed and slipping unchecked across borders. As the numbers of registered cases increased, people kept an eye on the death rate (slightly less than 16% of all the officially closed cases) while the number of recovered patients (just shy of 25% of all the officially registered cases) appeared in the media less often. As a result, what began as a quarantine for individuals has turned into a lockdown for many countries. Meanwhile, the panic and mass hysteria have become as much an inevitable reality of people’s lives as the official announcement of the crisis as serious.
Anxiety, fear, and constant appeals from governments to stay in and keep any social interaction outside the house to the very minimum have not left any other choice for society but to shelter online. And the internet has proven to be a place to be during this time of trouble: social media, online shopping, streaming platforms such as Netflix and Twitch, video games, online gambling, and even online worship are just a click away. Not so long ago, some would have called it a perfect day, but now it’s become a routine. The figures speak for themselves - total internet hits have jumped by between 50% and 70%, according to preliminary statistics. Meanwhile, Maria Rua Aguete of Omdia, the tech research arm of Informa Tech (an information provider specialized in the Information and Communications Technology sector), provides a vivid example of the surge in online business, saying “ecommerce will be the other sector that will see a revenue boost as a result of the crisis, adding $175 billion in revenue in 2020, which represents a 5% increase.”
For those who are the most emotionally and psychologically vulnerable, life online presents a way to escape reality. By giving in to panic, people risk giving in to the pursuit of instant gratification, justifying their actions by telling themselves they have “nothing to lose” or that they need a coping mechanism. On the one hand, the states of emergency, closure of borders, and nation-wide quarantines imposed by governments are necessary measures to prevent the uncontrollable spread of crisis situation. On the other hand, these measures can create extreme social isolation.
And that is why it is important to highlight the importance of being aware and conscious of one’s actions, especially during such stressful times. Any kind of online entertainment or leisure activity requires a certain amount of self-control, and players should keep in mind that excess of any indulgences can be harmful.
ONLINE VACCINE AGAINST CRISIS
By no means can a sharp rise in online gambling activity be overlooked. Statistics indicate that over the first two months of 2020, the number of Chinese players online increased by 90% compared to the same time period in 2019. However, due to strict regulations prohibiting any type of online gambling on the territory of China, the domestic audience has no other choice but to seek outlets for entertainment beyond their borders. One of the most popular options is the Philippine market, where Chinese players are always warmly welcomed by online operators who are fully prepared to meet any of their clients’ demands.
Meanwhile, in Macau, the revenue of land-based casinos has plunged drastically. In February, the revenue of the land-based gambling industry dropped by 87,8% compared to the previous year. This raises the question of whether it makes sense for Chinese regulators (and those in other restricted countries, for that matter) to maintain their ban on online gambling?
Despite a potential deficit of $6 billion, the result of the two-week closure of all casinos in Macau, the government in China does not intend to relax its stance on the current topic, forgoing potential tax income from the online gambling sphere. In contrast, some states in the US have been moving forward with potential online gambling legislation, taking into account the scale of the crisis and the financial losses that inevitably lie ahead. In fact, land-based operators may be able to compensate for some of their losses by opening online branches of their brand.
“Imagine MGM or Caesars directly targeting their customers right now to play at home, incentivizing them, offering them the opportunity to come to Vegas with discounted rates at some point in the future,” says Jason Ader, a gaming analyst and CEO at SpringOwl Asset Management. He continues “[they could be] connecting with that customer in an online environment and capturing that wallet and using kind of the data science around online gaming to sort of better market to their consumers”.
TOO EARLY TO GO ON QUARANTINE
Jason Ader, whose company is tied to the Italian online betting market, noted that while land-based casinos and lottery retail outlets are experiencing a significant dropdown, the online betting sector is quite stable, even witnessing a slight increase in numbers. This is backed up by a statement from Newgioco Group Inc, one of the biggest players in the Italian betting market. Despite the closure of its 150 retail outlets, the company has not seen any decline in the online sector. Moreover, on a daily basis, the company staff has had to deal with 200 to 300 new online account applications since the country has gone on lockdown. However, this raises a question: what events do players bet on once the vast majority of the world’s most popular sports events have been canceled or postponed?
The time for virtual and fantasy sports has come. Both disciplines now have a great opportunity to step out from the shadow of traditional sports betting. The popularity of virtual sports varies from market to market, with the African market currently seeing the highest demand. With the lack of live sports currently available, punters couldn’t ask for any more than the 24/7 betting options offered by virtual sports, so we can expect to see increased activity in other markets. However, even though virtual sports betting has several obvious advantages over traditional sports betting, it hasn’t reached its full potential yet. Some punters are turned off by what they see as low-quality graphics.
On the other side of the online fence, esports has become a major industry, drawing the attention of millions of millennials. Compared to traditional sports, esports thrive in their natural online habitat, meaning that operators would do well to consider adding esports betting options to their sportsbooks - or, even better, launching a separate betting platform, given the fact that esports audiences do not like to associate themselves with traditional sports and especially the traditional gambling industry.
Another tactic that operators have at their disposal is collaboration with various social gaming networks. Although social gaming by definition cannot have money or any other reward of value as its prize, real money is still a part of the game (e.g. purchasing in-game features). To further the argument, gambling in the UK as a leisure activity is slowly migrating under the umbrella of gaming, said Matthew Enderby, an author for Gambling Insider. He added: “In the US, this is already a common trend.” The growing trend towards merging gambling with gaming is only a matter of time and an inevitable part of the industry’s future.
According to Telecom Italia, in Italy, one of the first European countries on lockdown, online traffic has increased by more than 70%. Online gaming has played a crucial role in the upward spike, especially Fortnite, an online video game providing players with the option not only to enjoy the gameplay and UX (and making some in-game purchases if needed), but to interact with each other through in-game chats and forums.
In-game communication makes social games and social casinos exceptional, in a way. The social aspect almost prevails over the gaming one. Operators and developers find their main source of income in offering players additional tokens and loot boxes that help the audience stay online even after all their free tokens and other bonuses have been used. For operators, the social gaming sector can become a bridge for cross-selling other gambling products to players. With players confined to their homes and spending all their time online looking for new gaming experiences, now could be the perfect time to explore the link between social gaming and online gambling.
While crisis has managed to clear the streets, online traffic has soared to such an extent that people have started to express their growing concerns that internet connections around the world will be unable to handle the stress.. In fact, the surge in traffic should only be seen as an extremely positive sign, as long as operators have excellent technical and customer support, in addition to the wide selection of appealing game content necessary for retaining their clients.
Seeing as the audience has plenty of time to play, game quality will be held to a higher and higher standard. Considering the saturation of the market, operators should always have their finger on the industry’s pulse. Even more importantly, with no looking-forward strategy, there is a huge risk of being overrun by competition and facing serious losses. To bring in new players and keep them engaged with the platform, operators don’t have to reinvent the wheel, but can use such well-known marketing tools as bonuses and VIP programs, perhaps even bringing them to another level to boost high rollers’ loyalty.
As a huge proportion of offline gamblers shift online due to the lockdown, right now the paramount importance of the operators is to ensure their operations are smooth and their marketing tactics are productive. Aggressive marketing strategies, lengthy withdrawal processes and negligent customer support could have an extremely detrimental effect on already-stressed players, who in turn could have strong emotional reactions and might, for example, leave overly harsh reviews on review sites and forums. The reputation of one’s platform is a long-term and very delicate investment that no operator can afford to neglect.
Another concern for operators is how to organize a company's workflow, given the measures implemented by governments to stop the spread of the virus. Some countries have limited operating hours, while others have strongly recommended that employers offer their employees a home office option. As a result, companies might have to bend over backwards to ensure continued productivity, and pay close attention to those parts of their business which can ill afford to fall below standard. For example, this would be a disastrous time for lapses in security to result in data breaches.
SURVIVAL OF THE BIGGEST
Affiliates are a vital element of the iGaming ecosystem. Increasing traffic, acquiring new players, enhancing operators' reputations, advertising, and many other marketing services are all handled by affiliates. Unfortunately, the critical role affiliates play in the industry could be a cause for operators’ concern in the current circumstances. Affiliates may see the online boom caused by the increasing number of people having to spend their time on the internet as an opportunity for the kind of price gouging that usually takes place in countries with highly unstable economies and governments.
With the exceptional challenges operators are currently facing, affiliates’ services become even more significant for the reason that they often have the power to guide potential players through the twists and turns of the gambling world.
Some affiliates are already taking advantage of the crisis by abusing crisis-related keywords to boost their search results. This has caused a wave of discontent among operators who felt cheated by affiliates using keywords unrelated to gambling to improve their search ranking, inflating their traffic numbers with irrelevant page views. In response, iGaming software provider Gaming Innovation Group is offering free use of its affiliate monitoring software for operators who disapprove of such corrupt content marketing tactics. This illustrates the tightrope that affiliates have to walk - for now, they face a delicate balance between staying relevant and spoiling their reputation by seeming to exploit the crisis.
Outreach and reputation are crucial for maintaining a high demand for services among affiliate marketing platforms and particulars. In order to be in demand, affiliates have to be worth their weight in gold when it comes to credibility. For example, Revenue Lab, which has already made a name for itself as a highly reliable affiliate network, will hardly have to fight to keep its clientele and audience. Their reputation on the market speaks for itself louder than anything else.
But affiliates with a smaller outreach and those who’ve just recently tapped into the industry might have some hard times ahead of them. Most likely, operators would rather partner with affiliates who have a long history of success in the industry behind them to justify the operators’ marketing spend.
GAMING CONTENT IS KING
Is it possible to create gaming content of breathtaking quality from scratch in a very short period of time? Undoubtedly, it is. However, whether that’s true at the moment is debatable, as companies gripped by the crisis panic might find it hard to focus on game creation.
On the winning side, there are game developers who had planned their releases for exactly this time of year. For providers without fixed release dates, it’s time to define a strategy for their future projects in the context of emergency situations, bans on large social gatherings, and lack of free movement in many countries. Obviously, a multilevel game creation process requires a significant amount of time and effort from an entire team, which could be a challenge in the midst of a global crisis if employees have to leave their offices and stay home. Operators should carefully consider their potential and adapt to the new emerging demands, and most importantly, assess whether they can deliver the satisfactory end product in the light of the global crisis.
Traditional approaches to game features and themes that have withstood the test of time could seem trivial or mundane at the moment. Taking into account what is happening around the world, users could very likely want something novel to immerse themselves in.
For example, slots and other games with ancient civilization themes would benefit from the added twist of stories about threats to humankind bringing contemporary spins to classic themes. Some potentially intriguing themes could include zombie attacks, lockdowns and other apocalyptic scenarios.
It’s also important to comprehend that a theme itself is not enough to keep players’ attention without appealing features and a compelling storyline. A non-intrusive educational message slipped into the gaming content is another characteristic that can distinguish an exceptional slot from a regular one.
However, it goes without saying that exceptional slots require extraordinary conditions alongside a unique atmosphere in order to make the magic happen. Is it possible, in such uncertain times, to come up with a definite winner of a slot? Game developers should take the opportunity to demonstrate what they are really capable of, and hopefully, the industry will witness some true innovations soon.
THE MOST VULNERABLE SECTOR
Global attempts to prevent the spread of the virus have devastated the entire event sector of the industry. Sports competitions, concerts, exhibitions, conferences and any other events that gather 10 or more people are no longer allowed in many countries affected by the crisis.
The conferences and exhibitions that have become a fixture of the iGaming space have been cancelled or rescheduled, with the exception of those that can be held online -- a format that might not be a bad compromise, given the circumstances.
If meetings and conferences can be held on line, what about exhibitions?
On the technical side, the idea shouldn’t be seen as a fantasy. Advances in virtual reality and augmented reality, both of which have been hot topics for a long time, have given both fields a lot to show for themselves - and there could be no better time than this.
It is worth mentioning that in the case of virtual trade shows and exhibitions, the costs of organising exhibitions are going to increase tremendously for all parties involved. Hosts would have to invest incredible amounts of funding to implement the latest technologies, which is going to be reflected in participants’ fees. If that logic is anything to go by, then we should stress a few questions: will the changes result in a decline in demand for exhibitions? And are all the parties geared up for such changes? Furthermore, is the industry itself evolved enough for such a shift?
The industry might have to take this step, however desirable it may or may not look, as experts have warned that the virus outbreak is steadily increasing. Meanwhile, if the borders remain shut down over the next few months, the sectors of the online gambling industry that still require in-person social interactions will be significantly affected.
All in all, we can only say - what a time to be online!
According to some industry experts, a noticeable rise in online gambling is not likely to be a very long-lasting phenomenon, regardless of the crisis’ consequences. On the other hand, the instability caused by the virus has demonstrated the advantages the online gambling industry has over the land-based sector. While one has nearly disappeared, the other has been experiencing an increase in new players - and in revenues. Moreover, players interested in a 24/7 gambling experience will find online opportunities to be the only available option until land-based casinos and major sporting events have been given a green light to resume their activities.
However unpredictably things may develop in the future, the gambling community has already begun to realize the importance of the regulated online gambling sector, which generates 25% of the revenue of the entire gambling industry. Some would rather argue - with good reason - that the online sector has proved itself to be the safest and most sustainable business to be in since the global crisis arrived - so that answers Hamlet’s question of “to be or not to be”. To be, of course - to be online!