Disruptions to sporting events, office life and retail business have forced gaming businesses to pursue a strategy of diversification over the past year. In uncertain times when the industry is yearning for stability, many have also come to realise the value of sustainable, responsible gaming on the Isle of Man, writes Head of eGaming, Tony Ure.
The past year or so has been a whirlwind for our industry. When the virus first emerged in China in 2019, few of us imagined that less than half a year later sports arenas and stadiums would be standing empty, and that retail lotteries, casinos and betting shops would have to close their doors for months on end.
It was shocking to see how quickly everything changed for the sportsbetting sector. Companies who had been turning over huge profits on live sports lost their main revenue stream overnight, while retail businesses that had been thriving in the pre-pandemic world suddenly saw their shops closed and their profits evaporate into thin air.
The “new normal” 0f the pandemic has definitely been a wake-up call for many operators. COVID-19 has been the catalyst for a huge phase of strategic revaluation, particularly for those companies who were used to doing well on the back of a single product in a single region. With so much uncertainty in the air, those highly specialised operators have had to identify potential vulnerabilities and adapt to these unpredictable times.
All of this has meant that the past year has been a time of unprecedented diversification for our eGaming community. Some of our licensees have focussed on diversifying the range of products they offer, others have focussed on diversifying the regions they operate in, and others have moved into different channels, such as mobile, in order to continue to reach their customer base.
When the pandemic first hit, a whole host of top-selling sports markets disappeared overnight as tournaments were scrubbed from the calendar. Sportsbetting firms could still find some reliable bets on off-piste events like Russian table tennis or the Belarusian football league, but for most of these firms, it was a case of adapting to a whole new type of product.
With retail betting shops and live dealer studios closing as well, we saw a huge scramble on the Island to adopt different verticals and revenue streams. Our software suppliers were overwhelmed with requests for virtuals and RNGs, especially those companies who were agile enough to get their products out quickly. Betting firms found great stand-ins for their usual live events in the virtual racing and fantasy sports space, both of which became immensely popular after the stadiums and racecourses closed their doors.
For the retail lotteries, rapidly adapting to an online lottery product helped to shore up revenues lost through point of sale shop closures, and the reduced jackpots from lower sales. Meanwhile, our esports licensees suddenly saw the explosion in business they had been waiting for. The pace of growth in this emerging field has been astounding, and has justified our belief that esports is a market to follow in the future.
Now that traditional sports leagues are back on our screens, punters are returning to their old habits to some extent. (Let’s be honest – I don’t think many of us expected table tennis to remain top of the betting leagues for long…) Nevertheless, esports, virtuals and online slots have retained some of their uplift. Those football fans that have migrated over to online casino in extraordinary times may carry on placing their bets on Liverpool or Chelsea F.C. whenever they can, but many of them have also discovered online games and virtual products that they continue to enjoy alongside traditional sportsbetting products.
The second type of diversification that our gaming community had to look at was geographical diversification. Many of our licensees target rapidly growing markets around the world, and were used to making reliable profits in a single region.
With COVID-19 impacting different countries at different times and at different degrees, the pandemic meant that those businesses that were solely operating in, say, India or Africa, suddenly realised what a precarious position they were in.
In order to hedge against future shutdowns and disruptions, many of the companies on our Island have moved into new jurisdictions and started to target a range of new markets. This geographical spread has given them confidence that if one jurisdiction shuts down, they can always focus on another and capitalize on the best rates of economic recovery in the most robust regions.
Thanks to the uncertain sports landscape, where some sports are starting up again in some regions while others remain in lockdown, operators are now seeing the huge benefits that come with this type of diversification.
Although online and mobile channels have been growing at a dizzying speed for some time, many of the regions our community focuses on have remained stubbornly brick-and-mortar. Of course, with retail businesses being told to close their doors indefinitely, migrating customers online in places like LATAM and Africa has become an essential survival strategy. This has led to an incredible spike in the number of players accessing games and betting apps on their mobile phones, especially in continents where people’s main means of accessing the internet is their smartphone.
The companies that have taken a more omnichannel approach in recent months have been rewarded with a huge uptick in mobile activity. Primarily, we’ve seen that in India and Africa, but also in developing countries where mobile and mobile payments are currently pushing the envelope.
Our licensees have been reaching a highly active contingent of younger players in Africa for many years, and with the growth in smartphone ownership on the continent, this group of players has had a natural migration over to mobile betting and gaming. When games are adjusted for the audience and verticals like in-play mobile betting are enabled, mobile acquisition and mobile play becomes both an attractive and a viable alternative to retail venues for people in developing nations.
With trade shows and other industry events cancelled or held online, we were expecting a quieter year for licence applications. To our surprise, the number of licenses we’ve granted has shot up by 50% in 2021, with many companies approaching us as part of a move towards a more sustainable business model.
The pandemic has not only encouraged businesses to value diversity in their revenue streams and business strategy – it has also helped them see the place of responsible gambling and Tier-One jurisdictions like the Isle of Man that stand for sustainable, long-term growth and opportunity.
Over the past year, we’ve had shorter lockdowns (and fewer of them) than most other areas in Europe, making the Island a place of relative calm and stability amid the turbulence of the pandemic. As companies struggle with the demands of home office, a number of management teams have created hubs on the Island where they can continue to operate their businesses and enjoy the world-class infrastructure on offer here. Others in the industry are now looking into creating a long-term physical base on the Isle of Man in recognition of the incredible community and support available on Island.
While we’re thrilled to be on track to hit 60 licensees this year, we’re determined not to shoot up to 300 licences overnight. If anything, the pandemic has encouraged us to stay the course as a responsible and careful jurisdiction that awards quality licences to quality companies – companies who know the value of stringent KYC and AML requirements and want to find a place to build their business sustainably.
When the pandemic first struck, industry big hitters that had previously seemed invincible faced threats to their very survival. Nevertheless, the gaming community here on the Isle of Man has proved just how resilient and adaptable it can be. In many ways, disruption to the status quo has forced companies to evaluate the very core of their business models: whether to opt for the easy buck, or the responsible long-term strategy.
As a responsible gaming jurisdiction, we’ve seen many take the latter option and opt for the Isle of Man licence as evidence of their reliability and quality as a gambling firm. When the pandemic loosens its grip, those companies can be confident of moving into the future with a future-proof business and a strong, resilient gaming community on their side.
Sep 14, 2021
Sep 9, 2021
Aug 31, 2021
Jul 28, 2021
Jul 26, 2021
Jul 26, 2021
Jul 26, 2021
Jul 23, 2021
Jul 22, 2021
Jul 22, 2021
Jul 22, 2021
Jul 16, 2021
Jun 29, 2021
Jun 16, 2021
Jun 16, 2021
Jun 14, 2021
Jun 14, 2021
Jun 3, 2021
May 29, 2021
Apr 28, 2021