Category: igauk_20190124

We estimate the global social casino game market grew 0.4% quarter-on-quarter or 1 1.7% year-on-year in Q3 of 2018. We estimate social casino revenues generated on Facebook were down 2.4% quarter-on-quarter, while mobile was up 1.1% quarter-on-quarter. For the trailing 12 months to 30 September, 2018, we estimate a total market size of $5.06bn or +17.7% year-on-year. After a strong first half of the year, there was a notable slowdown in Q3. Nonetheless we still believe the social casino market is on track to meet or exceed the CY18 estimate of 15.8% year-on-year growth.

Performance among the top 15 social casino publishers was mostly weak. There were a few key standouts this quarter, with both SG Digital and Playstudios demonstrating strong sequential growth. The majority of publishers, however, saw revenues flat-to-down on a sequential basis. In our ranking charts, Novomatic moved up one place to 13th position and is now ahead of Boyaa.

COMPANY HIGHLIGHTS

• Playtika saw its revenues remain broadly flat quarter-on-quarter and up 21.6% year-on-year. This marks the first real deceleration for Playtika in some time, as the company had been enjoying closer to 30% year-on-year growth for the last 12 months. The slowdown was largely due to some weakness in its franchise game Slotomania, the biggest social casino game in the world. We don’t believe the decline in Slotomania is of any major concern and is more related to seasonality and the release of new features and content. House of Fun revenues were stable, while Bingo Blitz and WSOP both enjoyed healthy sequential growth. In terms of KPIs, we believe Playtika’s consolidated DAUs and ARPDAU was essentially flat this quarter.

• Aristocrat (Product Madness + Big Fish) remains the number two publisher worldwide with 12.4% market share, which assumes a full quarter contribution from Big Fish (social casino only). Pro-forma gross revenues were up 2.2% quarter-on-quarter and 10.6% year-on-year. In terms of breakdown, we believe Product Madness was up 3% quarter-on-quarter or 11.5% year-on-year, with sequential growth driven by FaFaFa (now wholly owned by Aristocrat) and a full quarter contribution from its latest standalone game, Lightning Link. Big Fish social casino revenues were up an estimated 1.8% quarter-on-quarter and 9.9% year-on-year, largely driven by growth from Jackpot City Slots (we estimate +13% quarter-on-quarter). Looking ahead we believe the majority of growth in CY19 will be driven by newer games such as Cashman Casino, Lightning Link, FaFaFa and Jackpot City Slots.

• SG Digital saw total social casino revenues (B2C only) increase 5.7% quarter-on-quarter or 10.8% year-on-year. In terms of individual game performance, we believe Jackpot Party Casino

was up double digits on a sequential basis, thanks to a major relaunch of the game in late Q218 (this marks the second major iteration/relaunch of this franchise; the last one occurred in Q415). Additional growth drivers included Bingo Showdown, which has been gaining market share in the bingo category and has been a very beneficial acquisition for SG. Finally, Monopoly Slots, which officially launched on a worldwide basis in early Q3, provided incremental revenues for SG Digital. Importantly, this meta-rich game does not appear to be cannibalising its existing portfolio of slot games.

• DoubleU Games, which owns Double Down Interactive, is the third largest social casino publisher worldwide with total gross revenues up 0.6% quarter-on-quarter and 16.3% year-on-year (note: all of our numbers in this report are on a pro-forma basis). We estimate Double Down Interactive revenues on a standalone basis were up 1% quarter-on-quarter or 10.8% year-on-year, largely driven by its franchise game, Double Down Casino. We estimate DoubleU Games revenues on a standalone basis were flat sequentially and up 26.3% year-on-year, largely due to DoubleU Casino. This marks the fourth consecutive quarter that pro-forma revenues have grown on a sequential and year-on-year basis, and it appears the recent round of strategic changes at Double Down is starting to pay dividends.

• Zynga’s social casino bookings declined 2.0% quarter-on-quarter and 8.5% on a year-on-year basis. Zynga Poker was essentially flat quarter-on-quarter, while the company’s slot portfolio performance was mixed. Notably, the company’s franchise slot titles, Hit it Rich and Wizard of Oz, were up on a sequential basis, but overall slot revenues were down due to weakness from its legacy games such as Black Diamond and Spin it Rich. Overall, it was a fairly uneventful quarter for Zynga’s social casino business and once again a market share loser. That said, we do believe the margin profile of Zynga’s social casino business continues to improve and we believe Zynga Poker remains one of the company’s key cash flow generators.

• Huuuge Games saw its revenues increase 0.8% quarter-on-quarter or 40.8% year-on-year. The sequential slowdown was largely due to some technical issues it faced in July and August and negative seasonality. Growth in Q3 was led by Billionaire Casino (we estimate +18% quarter-on-quarter), which helped offset a small sequential decline from its franchise game, Huuuge Casino. Overall, we believe the company is well positioned for future growth in the social casino sector and is now looking at adjacent verticals to help fuel further gains. For example, it announced last quarter it was entering the casual games space through the launch of Tap Tap Games, a new publishing label focused on hyper-casual mobile games.

• PlayStudios saw revenues increase a healthy 9.7% on a sequential basis or 17.2% year-on-year. Growth in Q3 was driven by POP Slots, which has become its largest game and continues to demonstrate very positive growth and strong underlying KPIs. Additionally, Konami Slots saw a major growth resurgence this quarter, while its My Vegas franchise was essentially flat. The company’s new game, Royal Charm Slots, developed in partnership with King Studios (owned by Activision Blizzard), remains in beta as the company continues to refine and improve retention metrics. Playstudios did a good job of bucking the negative seasonality trend this quarter, which we put down to strong execution and some strategic realignment among its studios. Specifically, we note the company has made a number of key talent hires over the last six months, which we believe are now paying major dividends.

Disclaimer: Eilers & Krejcik Gaming, LLC is an independent research rm and is neither a registered broker dealer nor a registered investment adviser. No information contained in this report shall constitute as a recommendation or solicitation to buy or sell a security.

About: Eilers & Krejcik Gaming, LLC is a boutique research & advisory rm focused on servicing the gaming equipment, technology, and interactive gaming sectors within the global gaming industry. For more information about our rm and services please visit www.ekgamingllc.com

Over the past five years Camelot has done little to ingratiate itself with lottery players. First it doubled the price of National Lottery draws to £2 in 2013, then in 2015 it slashed the odds of winning by increasing the number of balls.

Throw in the increase in the price of EuroMillions tickets in 2016 and increased competition from more innovative operators such as the Health Lottery and Lottoland, and it’s hardly surprising the incumbent operator has experienced a steady slump in sales.

The 2017/2018 financial year saw something of a turnaround, something even Camelot wasn’t expecting to happen if comments made by its CEO Nigel Railton are to be believed. It had already taken some action to reverse the decline in sales following its strategic review last year and earlier this month it announced some further tinkering around the edges of the main games.

More interestingly, however, it also announced the planned launch of an annuity game next spring. Though it hasn’t divulged much detail, it says the top prize is likely to be “thousands of pounds every month for at least 25 years”. Although Camelot says the game is an “entirely new proposition” to its portfolio, it acknowledges it isn’t a new concept.

“We’ve been closely examining what is done in other countries where this type of game is hugely popular – particular in the US and Australia,” says James McGrath, communications manager at Camelot. “These types of games appeal to people who dream of lifelong financial security. This is why we believe it will round off our portfolio perfectly, enabling winners to benefit from a regular, fixed amount of money over a set number of years.”

£1,000 Per day for the rest of the winner’s life

Playing catch-up

While the forthcoming game may be the first in the UK from an official lottery, both Lottoland and Zeal Network’s MyLotto24 already offer punters the chance to bet on US annuity lottery Cash4Life, with a top prize of £1,000 per day for the rest of the winner’s life. “This is not innovation from Camelot, it is them playing catch-up,” says Nigel Birrell, CEO of Lottoland.

The question is, could an annuity lottery allow Camelot to catch up when it comes to sales targets? Indications from the secondary lottery providers are promising.

Lottoland was the first secondary lottery operator to offer bets on Cash4Life in the UK, launching its product back in April 2016. Of its performance so far, Birrell says: “Cash4Life is one of our consistently steadily performing jackpot offerings, not as popular as our leading products but definitely a core part of our overall product portfolio.”

MyLotto24 began offering bets on the lottery in the middle of last year. Blerina Essen, managing director of MyLotto24, says most of the customers betting on Cash4Life with MyLotto24 are using subscription products, suggesting it may attract a more loyal following than lump sum jackpot draws, which many only play when the prize has reached a certain level.

£20m Over the average player lifetime

Millennial magnet?

There’s also a possibility annuity lotteries could help attract more of the much-coveted millennials. “Those at the younger end of the spectrum see the value in winning £1,000 per day for life,” says Birrell. “If you take a 25-year-old and take the average life expectancy of 80 years, they would win over £20m over their lifetime. “Not surprisingly those in the age brackets 18-23 and 24-30 over-index against the average lottery demographic and our silver surfers under-index here.”

Indeed, when a Canadian woman won a lottery draw she entered to mark her 18th birthday in March this year, she made international headlines after being given the choice of a $1m lump sum payout or $1,000 per week for the rest of her life. She chose the weekly sum after taking advice from a financial adviser.

Financial security is a big attraction for players of all ages, says Essen. “It doesn’t change your lifestyle as much as a big jackpot but you have that cash comfort. That is why people like it.

Birrell adds that Cash4Life also has better odds than many other games. “As Cash4Life has a format of match five from 60 and then for the CashBall one from four, the odds to win the jackpot are very attractive at one in 22 million – that’s more than twice as good as UK Lotto at one in 45 million and substantially lower than the one in 139 million on EuroMillions.”

It seems then that for a variety of reasons, annuity lotteries do appeal to a certain group of players. But whether or not Camelot’s offering will be a success remains to be seen.

If it is, a likely side effect will be an uptick in sales for secondary lotteries. Although they will not be able to offer bets on Camelot’s product, the increased awareness of the annuity concept among UK and European players – an annuity lottery has also recently launched in Germany – will probably see more players wanting to place bets on products such as Cash4Life.

“We will definitely get quite a lot of sales from it,” says Essen. “The products that are pushed through external advertising perform much better than other products that are not as well-known in certain countries.”

Essen highlights Australia, for example, as one of the areas where Cash4Life has been particularly popular with MyLotto24 players. She puts its success down to the fact that annuity lotteries are now being offered by official lotteries in Australia.

Another bonus for the secondary lotteries are insurance savings. Neither Lottoland nor MyLotto24 insure bets on the products, presumably because the winnings can be covered by their profits in the relatively unlikely event of a winner, although it’s worth mentioning that MyLotto24 had a second prize winner on Cash4Life in the first week it offered the product.

As well as alienating players with its game changes in recent years, Camelot has also cultivated a rather hostile relationship with secondary lottery operators. Ironically, in this latest attempt to appease the former it may well provide a boost for the latter.

iGaming Business: What aspects of the lottery industry is this course designed to cover and who would benefit from attending?

Wendy Lawrence: The Lottery Academy is an introduction to the sector: think of it as a 101 “least you should know” guide aimed at those who want to boost their knowledge quickly. This could be people new to the industry, regulators, potential suppliers to the lottery industry, lottery entrepreneurs, or lottery professionals wanting to step outside of their own operation and explore new ideas within a like-minded group. We cover a lot of material including the history of lottery, the size of the global market, the operational models and key players, the alternative lottery market, with a deeper dive into key game types (draw/scratch/interactive), and channels to market (retail and digital).

The course offers a world overview of the industry. Which jurisdictions currently hold the most promise for lottery, and why?

I think that the potential of digital lottery sales in the US is very exciting at the moment. The US state lotteries have been very slow to get interactive and so far only a handful have made that step, but some, such as Michigan, are starting to see great rewards for their innovation with interactive instant win games. The evidence is now there to show the upside of interactive, and to eliminate concerns about the impact on retail, so the potential for other state lotteries to introduce digital is huge. For more traditional lottery sales, South America and Africa are very underrepresented in the global figures, so there is massive potential for the expansion of tried and tested draw and scratchcard games.

What has the growing popularity of alternative lottery models done for the vertical as a whole?

It took a while but the regulated lottery market has finally woken up to the threat of alternative models such as the betting/insured companies. Ultimately, providing an identical player experience but cutting out the official ticket/lottery potentially undermines overall lottery revenues and returns to good causes. As such, countries such as the UK and Australia have legislated to prevent this style of betting on country-facing games. What intrigues me is that this has made companies such as Lottoland innovate further with new game development to replace those revenues, and this is to be welcomed. In addition, I think that companies offering services such as syndicates are bringing new ideas to a relatively static sector and should be congratulated. We need more innovation to shake up the complacency of the state/national monopolies. However, only time will tell as to whether these are commercial successes over the long term.

What key takeaways can participants on the course hope to walk away with at the end of day two?

My primary ambition is for all participants to identify new opportunities for their own business, whether that be in new game ideas, new routes to market or a better understanding of how to work within the lottery industry more efficiently.

You’ve worked on both the operator and supplier side of the industry. Which side is doing the most to innovate lottery offerings at present?

Without doubt the suppliers. Traditional lotteries are often state departments that move slowly and are risk averse. It is to the credit of suppliers, such as Neogames in the interactive instant win arena, that they have invested significant time and money developing new ideas that are now bearing fruit. You have to be prepared to play a potentially long game if you want to get innovation into the lottery market. I am delighted that with the expansion of digital lottery there is a greater potential for new, smaller suppliers to get into the market in areas such as game development/apps and interactive lottery systems.

What have been the most significant changes to the lottery market over the course of your career?

I can think of three. Firstly, the cross-state and country collaboration that led to the introduction of multi-jurisdictional games such as Powerball and Euromillions. These redefined the notion of a jackpot and put the excitement back into draw games with life-changing possibilities. Secondly, the expansion of lottery into digital, which has enabled lotteries to meet player demand for convenience, expand the player base and drive incremental sales, even if its full potential for new game experiences is not yet being met. And finally, the betting/insured alternative sector has presented competition and challenge that has shaken up the rather cosy and safe market.

The course includes a session on defining lottery. How does lottery differ from other gaming verticals?

Fundamentally lottery is about dreams. A mass market proposition that encourages many to have a small flutter for a life-changing sum, while contributing to society. Lottery has a unique place in the market as players do not consider themselves to be gambling, and many would not consider playing other gaming verticals. As such, there is a far greater obligation on lottery operators to act responsibly and respect their monopoly position.

What do you expect to be the defining features of the lottery industry over the next 18 months?

I am not expecting, but I am hoping to see true game innovation in digital which will, again, redefine lottery for the next generation.

New markets are opening up to virtual sports betting and nowhere is this more apparent than in the US. Although the SCOTUS decision caught lotteries by surprise, they are already racing to offer a form of the product to their customers. Predictions vary, but according to some industry reports between 25 and 35 US states are likely to offer legal sports betting by 2023. And while not all states will follow the same model, most will find a way to launch a form of sportsbook to their clients. Online betting will follow suit, albeit at a gentler pace, with the same industry reports forecasting it to be legal in 1 1-22 states.

MARTIN WACHTER is CEO and founder of Golden Race. For more than 15 years, Wachter has spread innovative, tailored solutions and virtual sports worldwide. Specialised in all the areas of the company, he takes special delight in being part of marketing strategy, product management and development.

Other markets on the American continent are considered to be cash cows. The Latin American sports betting market represents a significant opportunity for any providers currently working hand in hand with regulatory bodies. We know that South America is home to millions of potential gamblers, and the best opportunities will be taken by those suppliers that already have a presence in the region, in particular Colombia, Brazil and Mexico. Virtual sports providers are trying to show regulatory bodies the appeal of this type of betting product in order to include them in the regulations of each country.

Elsewhere, companies are now competing to deliver the most realistic 3D graphics and computer effects. Innovation moves fast in this field, but stakeholders need to remember the most important thing: players need to have a satisfying betting experience. The main focus should be on offering attractive odds and a wide range of betting opportunities, while ensuring that players know they have a real chance to win.

Virtual sports betting allows a younger generation of players to cross the gap between video games, esports, other digital entertainment formats and sports betting. Players can use virtual sports betting as a way to learn about the games and the betting options, as well as an opportunity to improve their skills prior to jumping into traditional sports betting.

Virtual sports shouldn’t be seen as a replacement for the real thing, but rather a complementary gaming experience that can be played at any time of the day, every two or three minutes. When we look at a football match, for instance, bettors will have the chance to back their favourite team multiple times a day, not just once a week.

However, we are certain that virtual sports will eventually surpass real-world gaming revenues. The numbers in countries like Italy prove that virtual sports have become one of the most popular games next to sports betting. Our metrics also show that in many other countries the volume and traffic on virtual sports is almost the same size as the real thing – and way ahead of any other gaming revenue streams.

COMPANY PROFILE

•NAME GOLDEN RACE •FOUNDED 2006•SECTOR SOFTWARE •WEBSITEGOLDENRACE.COM•TWITTER@GOLDENRACE

Virtual sports is one area of igaming that has completely reinvented itself over the past ten years, and it’s safe to bet that the most dramatic change in the sector is still ahead of us. Initially it had a very simple premise: to allow players to place bets during the lulls between live sports. Virtual sports never tired and never slept, the rounds came thick and fast every couple of minutes — and they still do. It’s a similar gaming experience to playing slots. Back in the day the virtual offering was limited to fast-paced events such as horse racing and greyhound racing, both of which were deemed ideal for the virtual arena.

VLADISLAVS HVECKOVICS is a gaming systems integrator, casino back-office software developer and the CIO and co-founder at SoftGamings. Founded in 2008, SoftGamings offers online casino platform solutions, including development of white label, turnkey and self-service casinos and advanced bonus and loyalty engines.

That need for a betting activity during the breaks between live sporting events is still there. Virtual sports does a good job converting active sportsbook players into ones who will happily place a quick bet or two on something else. However, the sector is rapidly expanding into more complex gameplay, with the aim of attracting players from traditionally distinct sectors such as table games and slots.

Most advanced virtual sports providers are moving away from showing stamp-sized, low-quality video clips of real events and into full-blown, HD-quality, professionally dubbed, 3D rendered sports. Given the current stage of development of video games graphics and the ubiquitous professional tools such as 3D engines and physics engines, the ability to show a completely rendered, live 3D event has become a reality.

Moreover, once you move the game into a rendered 3D environment, the possibilities become limitless. Operators can create leagues, championships and multi-player events that offer a lot of interactivity and a deeply engaging experience. The technology is definitely there, so the question is whether virtual sports can move from the niche to the mainstream and chase the slots and table game players.

Given that the game experience is already lightyears ahead of the products we saw just three or four years ago, we believe the chances of that are quite high. The popularity of mobile casual games providing quick on-demand gameplay also makes the mobile market an attractive proposition. We will most likely see virtual sports split into different genres, catering for different audiences: a simpler version of betting offering instant results with minimum choice for conservative players, and something more complex for the newer players.

Geographic differences should also be considered. First of all, player preferences differ a lot from country to country. With a talented development team, any sport can be turned into a quick and exciting virtual sports game. Historical preferences will make a difference as tastes vary depending on the territory: we see some new markets being much more perceptive to new igaming products because they do not yet have a particular preference towards something. Those markets therefore offer a strong first-mover advantage.

Today, even the concept of popular sports is shifting, with esports considered by many to be a proper sport discipline. There is a potential niche at the junction between esports and virtual sports. Virtual sports can also inherit a lot of game elements and dynamics from both real sports (with their myriad of in-play betting options) and slots, with their tournaments, promotions and bonus/jackpot games.

We feel that the virtual sports sector can become a much more important part of the igaming industry if it plays its cards right. SoftGamings will keep a close eye on developments in this area closely and recommends that operators do the same.

COMPANY PROFILE

•NAME SOFTGAMINGS •FOUNDED 2008•SECTOR SOFTWARE PROVIDERS•WEBSITESOFTGAMINGS.COM•TWITTER@SOFTGAMINGS1

Hyper-realism has been gaining traction in virtual gaming. There are a few reasons for this, chief among them today’s players being used to video games that are extremely close to reality, thanks to technology such as motion capture.

FRANK WENZIG is the general manager of gaming at Sportradar. He first joined the organisation in October 2010 as associate director of product management after Sportradar acquired a company called Aitainment, which became Sportradar’s virtual sports division. Prior to joining Sportradar, Frank worked as a software engineer and spent 11 years in IT consulting and project management.

However, it’s important to not just concentrate on the visual aspect. If you don’t also make your virtuals hyper-realistic in terms of betting mechanics, then users will not be able to engage as well as they can with real-life sports, which defeats the whole purpose.

The challenge, therefore, is to make virtual sports even more realistic. This is why over the last five years or so, we have used motion capture to develop our virtuals. It’s also the reason we base our virtual betting experience on the same tools and interfaces that we use with real sports.

Betradar has never looked back since first trying motion capture technology, but that doesn’t mean it is easy. In our case, the process was incredibly in-depth and required we work with some of the biggest motion capture studios to produce our virtual offering.

Clearly, the key to making successful virtual games lies in creating the best, most realistic experience. However, it’s not just about capturing the aesthetics of reality; it’s also about data analysis. We analysed hundreds of thousands of events and circumstances across different sports to ensure that reality was represented in our virtual games.

Both the investment required and the complexity of the technology means succeeding in the virtuals market is becoming increasingly difficult. That doesn’t mean to say there isn’t space for start-ups to disrupt, but when it comes to keeping up with technology and realism using motion capture, data feeds and widgets, for example, there is a lot that a virtual sports company needs to master.

What’s more, by simply entering the segment, there is no guarantee that you will be able to stay there. It’s vital to look into emerging technologies and constantly adapt to the challenges, and this is something Betradar remains committed to.

Although multi-distribution is a buzzword, it’s become one of the unsung success stories of virtual gaming. Developers need to adapt all of their virtual sports content solutions into a huge array of constantly changing browsers and devices, which is no easy feat. However, it’s one that Betradar has ultimately overcome.

This technological race for realism and user experience is something that’s never going to stop. It’s a challenge but one we remain committed to. After all, we want to remain at the top of the virtuals game.

COMPANY PROFILE

•NAME BETRADAR •FOUNDED 2001•SECTOR SPORTS BETTING •WEBSITEBETRADAR.COM•TWITTER@SPORTRADAR

Virtual sports is now a standalone vertical in its own right. We currently sit at the intersection where the virtual and reality worlds collide, even if the products resist any realistic overlap for now. However, just take a second to wonder at the advances in artificial intelligence or to marvel at the esports revolution. Software providers are creating increasingly authentic and engaging games which, in terms of their authenticity, are not limited by the confines of the real world. This emerging tide is only rolling one way. And 2019 could well mark a watershed on a few fronts.

STEVEN SPARTINOS is co-founder and co-CEO of virtual games provider Kiron Interactive. Established in 2001, the specialist supplier now services web, mobile and land-based sportsbook and casino operators on five continents. Prior to joining the betting and gaming industry, Steven worked in banking and finance.

As ever, the challenge is to set the dials correctly, whether that means mapping industry trends, identifying areas of growth, or responding to fluctuating but trackable levels of popularity in each sport with a flexible hierarchy that adapts to international tastes.

Like sportsbook itself, virtuals are thriving and continuing to grow in Europe’s saturated market, while the rise of sports betting across Africa and LatAm is opening up new territories to explore. Cultural appetites do not appear to be a barrier to entry, particularly as these games become more realistic. Increasing popularity is driven by 24/7 opportunities, the appeal of short-form betting for players and elasticity of schedule for operators.

Not only does this allow operators to rival the instant-win proposition of casinos, but it also affords them the opportunity to supersede and surpass their one-dimensional nature. That’s because the enhanced gameplay and playability of sports betting offers more in terms of player engagement. Virtual sports, like their real-world equivalents, excel at retaining player interest. However, rather than wait on TV scheduling to, for instance, deliver your next Manchester derby, virtuals can deliver the next encounter on demand and in greater frequency.

Kiron has recently developed a proprietary bet management solution, BetMan Omni, for both retail and online, which allows for multiple picture delivery options across all channels from retail to online. The straight-to-mobile experience represents the final frontier for UX optimisation. The interface has to feel like a real sportsbook, with a responsive network of options and functionality that powers an intuitive and real gaming journey for the end user. Equally, for the operators, these virtual sports must be easily customisable.

Kiron’s unique technology was designed to deliver this in spades — not only when it comes to tailoring the product for customers but also, just as importantly, when it comes to ensuring that the product conforms to local legislation and tastes. After all, it’s no good thinking globally if you can’t act locally, and our pioneering tech can match any specific market with a profitable offering of virtuals.

Continents like Africa and LatAm are like a patchwork quilt in this regard, so Kiron has made flexibility its watchword. Of course, this multiplicity also applies to regulations which can be divergent or slow to roll out among newly regulating markets. However, they’re invariably time-consuming, while overloaded product development pipelines can lead to further delays. For now, I’m afraid it’s a necessary obstacle to overcome, but we are certified and licensed in a majority of jurisdictions.

As for the popularity of the sports themselves, football and horse racing continue to rule the roost, with football edging it for the moment. Likely, this is due to the short-form, repetitive appeal of racing, with emerging data making a case for virtual horse racing competing for long-term revenues. Interestingly, this is despite its more niche appeal as a global sport, and irrespective of whether any specific region boasts an established real racing industry or not. Indeed, to a lesser extent, it could be a similar story with events like greyhound racing. More broadly, though, the native public appeal of each sport in any given market is a good guide to whether its virtual cousin will also work there. If football is not capturing end-user imagination across, say, Scandinavia, then ice hockey assuredly will. In short, therefore, offering the broadest gaming portfolio possible facilitates tailored operator solutions that speak to any territory.

Enhanced graphics and immersive soundscapes add up to a winning experience, too, generating lifelike depictions of racing and sports events. In Kiron’s case, live-render delivery makes our games even more realistic, while our leading CGI technologies (featuring improved motion capture processes) scale the peak of authenticity. Elsewhere, customisable options, including localisation, serve to recreate familiar sporting stadia and more recognisable race tracks.

We need to remember that we’re in the entertainment business here, and when it ceases to be fun, people generally stop playing. Or, they turn the channel in search of a better show – i.e. more convincing content. The next generation of products, which offer more extensive betting options and derivative market configurations (not to mention lower-margin odds), are tools to improve an already enjoyable ride, augmenting both acquisition and retention for operators along the way.

At Kiron, our premium graphics allied with the largest selection of virtual sports around (21 and counting), combine to give our partners a competitive edge in an ever more crowded space. Our latest product delivery enhancements also permit operators to better align and deploy any game to connect with its optimal audience, fostering better revenues.

As I’ve already mentioned, modular gaming system architecture is the key to unlocking the global potential of virtuals. After that, it’s a just question of employing the best management system, with total control of odds, limits, jackpots and event schedules, all underpinned by trusted tech for security and operational peace of mind. In this latter regard, virtuals are light years ahead of other verticals. And the management gap is only growing.

Why settle for gritty reality, when virtual visions are much more attractive? Ready Player One narratives may be the stuff of science fiction novels for now, but this brave new world of virtuals means that players can already choose the best of both real and virtual worlds.

COMPANY PROFILE

•NAME KIRON INTERACTIVE •FOUNDED 2001 •SECTOR VIRTUAL SPORT AND NUMBER GAMES, SPORTS BETTING, LOTTERY, CASINO. •WEBSITEKIRONINTERACTIVE.COM

The intensity of the argument over fixed odds betting terminals (FOBTs) over the past two years may have surprised some but it has been going on, in one form or another, for the best part of 15 years.

What was clear to anyone paying attention to the discussion was the heated, emotive and at times brutal nature of the terms used by anti-FOBT campaigners. Whether they came from pressure groups such as the Campaign for Fairer Gambling or trade bodies briefing against FOBTs because of resentment at the Association of British Bookmakers and its members being allowed to offer the products on the high street, it’s been a bruising debate for all stakeholders.

The result of all this lobbying warfare, of course, was that back in May the UK government announced its decision to reduce the maximum stake from £100 to £2. Followed more recently by the announcement that this would not come into force until October 2019 and the sports minister’s consequent resignation.

In other words, can it lobby constructively, without members sniping at one another? If the FOBT fiasco has proved one thing, it is that the industry will not achieve positive regulation so long as it continues lobbying in such a disjointed manner.

Clive Hawkswood, chief executive of the Remote Gambling Association, makes just this point. “One lesson to remember is that we stand or fall together,” he says. “The gambling sector is very diverse, but in practical terms this lack of lobbying coordination translates into the industry getting nothing back from the government in terms of regulation. If a stakeholder is asking for certain measures to help their sector, it is surely better that they can do that without others criticising or briefing against them. That is what happened during the recent DCMS review, which was counterproductive for all involved.”

To this lack of cohesiveness can be added changes in attitudes across society. One industry source says the 2018 landscape is a million miles away from “the early noughties, which saw the creation of the industry as we know it now. The corporatism and lighttouch regulation of that time has been replaced with a much more judgmental, less tolerant environment where people can sound off through social media with very few facts at their disposal; politics reflects those customs.”

The source continues, “The 2017 general election cost Theresa May her majority in Parliament and prevented the government from being able to take measures that weren’t populist. Prior to that point, the £2 maximum stake wasn’t on the cards, we were heading towards £30.”

It’s true that social media can be unhelpful at times, but the idea that the government took the decision to impose the £2 maximum stake as a result of its loss of parliamentary majority seems like a stretch. One observer put it more bluntly, saying, “It was the industry’s repeated lack of effective communication around the issue, over a number of years, that combined to produce such an unsatisfactory result.”

Despite this, there is a will to move on from the FOBT saga. Richard Noble of the National Casino Forum says his organisation’s official line was that it didn’t have a public position on FOBTs, although he admits some NCF members “took a different view”. He adds, “It’s wrong to have individual sectors criticising each other, it causes a loss of confidence in the industry from a consumer and regulatory perspective. That is why we’re happy to work with other bodies and operators, especially on corporate and social responsibility messaging.”

And while each vertical will have different requirements for how it addresses consumers. Noble says, “Uniformity of messaging is important and this must be reflected through our campaigns. The same with data: there is a need to share learnings and knowing how to better identify problem behaviour or helping players earlier if necessary, rather than each group doing these things separately.”

Clive Hawkswood from the RGA adds that such moves would parallel the way the UK Gambling Commission has restructured its regulatory remits. “The Commission is now taking a schematic approach to regulation, rather than being sector-specific, and will look at issues across all forms of gambling to get insights for the industry as a whole, because issues like money laundering, sports betting integrity or self-exclusion apply equally across offline and online,” he says. “For some time online was seen as a disruptor and many people were against it, but in 2018 all operators have sizeable digital activities and it is taking the industry forward, so it doesn’t make sense to be part of four or five different trade bodies working separately.” “Online encompasses most retail sectors,” Richard Noble adds, “whether it is bingo, poker, casino or betting, and vice versa, so there is a real appetite to work more closely on all these topics, because the technology makes it possible and the benefits of having a unified system are clear.”

Moves to bring lobby groups closer together have started, with recent reports that the Association of British Bookmakers and the RGA are working on plans to merge.

“It won’t be a merger in the pure sense of the word,” says Hawkswood, “more a fusion of different functions between the two bodies, giving members more flexibility while bringing consistency to their messaging. The benefits of such a move are clear. It also offers the opportunity to ask how the industry got into such a mess over FOBTs and how it can avoid getting into such a situation again.”

The amusement arcade and adult gaming centre (AGC) trade body BACTA was the one body that openly campaigned against FOBTs. Chief executive John White thinks the group’s opposition to the machines was twofold. “FOBTs have had a direct economic impact on AGCs,” he says. “Half the AGCs across the UK have closed down as a direct result of betting shops opening near them with the four machines per shop. Players have simply left AGCs to go and play FOBTs. The second impact has been reputational: the negativity around FOBTs has spilled over to AGCs and the public doesn’t differentiate between the two, they join the dots and equate AGCs with FOBTs. This has also meant heavier regulatory pressures placed on our members.”

White stresses that “BACTA’s door is always open” and is happy to talk about projects on which it can work with other trade bodies.

He adds that BACTA has worked with the Industry Group for Responsible Gambling (IGRG) for the past six years and would be taking part in the Responsible Gambling Week initiative, which ran from 1-7 November.

And while such collaborations will be easier now that the FOBT debate is done, the idea that “the industry is taking big lumps out of each other” doesn’t ring true, White claims. “Yes, BACTA is against FOBTs, but we’re not against bookmakers,” he says.

He adds that “the ABB and RGA have a lot more in common when it comes to the verticals they offer consumers than the likes of BACTA”, although it will be interesting to see if the fortunes of BACTA members improve considerably once the maximum stake on FOBTs is implemented.

For all that, the public airing of FOBT-related grievances presented a highly negative picture of an industry at war with itself, low on confidence and unable to put forward the positive aspects the sector provides when it comes to fun and entertainment that the vast majority of the public can enjoy. The key test for the sector now will be whether it has learnt the lessons from this whole saga.

Jake Pollard is a leading journalist and content producer in the igaming sector. He has covered the industry for many years and has worked on all the major business-to-business publications.

There is a lot of discussion today about how to achieve greater representation for women, as well as other minorities, in the gaming industry. A lot of this is focused on what’s wrong, from the blatantly obvious (scantily clad models on conference stands) to the slightly more subtle (failure to take a stance against harassment and discrimination). But the tone largely remains defensive and reactive.

Reflecting on my own experience as a relative newcomer to the industry, I am a strong proponent of giving more air time to the good reasons for choosing gaming as a career path and how it happened for those of us who are already here.

So this is my ‘how-to’ guide for under-represented candidates, as well as the organisations that want to attract them.

Getting into it

As with all things, in my case it took some luck. I was not specifically after a career in gaming, but rather a high growth opportunity in an early-stage company, where I could apply the commercial skills I had acquired working for several years in financial and information services.

The opportunity presented itself in the form of a start-up that aspired to create a Bloomberg-style platform for sports betting. Although things didn’t quite work out, the time I spent with the company was formative.

What I learnt:

• For candidates: Don’t hesitate to define your ‘value-add’ in entirely new contexts.

• For organisations: Promote the fact that gaming is a dynamic global industry with strong growth potential — commercial growth potential translates into the personal growth potential.

Choosing to stay

Opting to remain in the industry was a deliberate decision and largely due to Colossus giving me the opportunity to become part of what I see as the most exciting story in gaming today. This was no typical recruitment process — there was no formal job spec or project definition.

But there was an open-minded invitation by the management to come on board, get acquainted with the business and potentially carve out a role for myself. Think of it as a form of ‘professional dating’ that worked for both sides and ultimately translated into me formally coming on board as chief of staff.

What I learnt:

• For candidates: Target companies before roles. Especially in early-stage environments, there is little time for job specs, but there is a high need for people who can demonstrate their value.

• For organisations: Target people before roles. Create roles for people you know to be valuable; in the long term, it is the highest-return recruitment strategy.

Looking towards the future

Just a few weeks ago, I was promoted to CCO. I am one of the many examples of our strong culture of promoting from within. And with a partner network that first doubled, then tripled in size in three short years, there is lots to look forward to. Is there a blueprint for everyone here? Probably not, but I hope there is enough to demonstrate that by being a bit unconventional, both people and organisations can go a long way.

Eva Karagianni-Goel is chief commercial officer at Colossus Bets, where she is responsible for the company’s B2B partner network and commercial strategy. She spent her early career in maritime shipping in her native Greece. Before joining the gaming industry, she held leadership positions with global information services provider Dun & Bradstreet in the US and the UK.

CUSTOMER SERVICES

CHANELLE DEMANUELE

It’s rare to find a CS department that’s growing as AI technology, chat bots and ‘self-service’ help reduce the need for human support. This may explain the growing wage gap in CS, as fewer, more skilled CS leaders can use technology to resolve a workload previously only possible with large teams.

This approach of outsourcing CS – with a handful of outsourced CS and fraud providers in Malta picking up the increasing workload – means you no longer need native-speaking, upper intermediate-level operatives. Cyprus, Bulgaria and even Costa Rica have all been locations for relocation of CS out of Malta.

SALES & ACCOUNT MANAGEMENT

KARL HARENBURG

Candidate demand is focussed on a secure base, particularly in city hubs where living costs are high. They are unwilling to risk their lifestyle on bonus packages, typically 20-40% within the remuneration package, reliant on meeting targets. Contrary to belief, the No 1 motive for switching sales jobs is not money but a more interesting employer.

Most are open to new opportunities and often mobile, except those with the deepest networks among large operators and suppliers where long-term deal shares place a high penalty on leaving. Exiting igaming for payments and AI tech is also increasingly attractive.

PRODUCT & PROJECT

CARA KERR

Salaries are growing across the board, but we’re seeing more progress to higher levels due to the increased importance of product, project and programme management roles in igaming.

Businesses used to force product heads into being ‘people managers’ of 10-30 people, but this resulted in low job satisfaction and became a key motivator for leaving. Now they are more savvy about using product & project managers for what they are good at, with some managing 30+ products with very few direct reports. Placing them in the right setup with the right levers to control is crucial.

COMPLIANCE, LEGAL & FRAUD

JONATHAN REBEIRO

New and updated regulation has added significant workload to compliance, legal and fraud departments in some markets over the past year. This increased responsibility has driven up senior salaries, particularly in Malta, as compliance professionals earn their place at leadership level.

Increasingly, compliance is about stakeholder management across organisations, and those responsible for meeting regulatory requirements have to be strong relationship builders. Operators are increasingly electing to spread responsibility across their organisation rather than within distinct compliance functions, leading to a reduction in some more junior compliance roles.

FINANCE & OPERATIONS

CHRISTINE HILI

We are seeing significant increases in salaries, particularly at the senior level where direct industry experience is essential and therefore highly valuable. This is an area where businesses are understandably unwilling to compromise, particularly for those charged with commercial responsibility and managing key growth initiatives. Individual roles are increasingly exceeding £150k with many hitting £200k. Technically astute operational leadership talent commands some of the highest salary levels: CTOs, VPs of technology, trading directors, also those with an appetite for working in emerging markets.

DESIGN & TECH

CAROLINE BUTLER

There is a huge quantity of vacancies in the industry for design and technology specialists, and this is continuing to grow thanks to the requirement to build a whole department internally with teams of 5-20 hires. However, this isn’t leading to increased salaries, as employers have not adapted their expectations to the highly competitive, candidate-favourable market.

Now we see a rising trend of hiring more junior developers at a lower rate (say £32-35k) despite the additional training that is required, as opposed to hiring smaller teams of experienced hands (say £45-50k). However, this in turn has resulted in an employee turnover rate of around 18 months.

Candidate requests for remote work increase daily – it’s the number one request on our tech desk, but to our knowledge only one company in Malta enables work from home, exemplary of the demand/supply gap.

Nowadays, igaming doesn’t have quite the pull-factor it used to – once it was the hottest industry for these candidates, but now there are equally attractive competitors vying for strong design and technology departments.

Tech and design candidates are always interested in learning or getting exposure to new technology – from PHP to new back-end language, or Javascript to the popular React or Angular frameworks. Perhaps in our favour is the fact that blockchain is also an area of interest. This drive for learning may, however, play a part in another motive for switching roles – non-technical skills like leadership or team responsibility are in demand from employers, but not desirable for the candidates.

ANALYTICS & DATA

DARYL KING

Analytics’ technical skillset has increased substantially, even in the past two years. Software knowledge in analytics -cloud system softwares, SME, Amazon RedShift, AWS, Azure, Google big query – PowerBI, SQL, rPython. This requires two skillsets in one person, a developer inside an analyst, which you are not usually going to find in a graduate, more in a developer looking to turn into an analyst. This can be an attractive route towards specialism as it’s often a higher-profile role, not all computer-based and based on stakeholder management and cultivating c-suite relationships.

So why the salary drop? Lots of technical analytics work is being moved away from London or other head offices to elsewhere in Europe, such as Bulgaria, Romania and Vienna, where the lower cost of living means can you can employ someone working at senior BI level for €45k as opposed to €65k. AI is where the big money is at – you can earn €150-200k as a graduate at Google or Microsoft.

MARKETING

GARETH MULLEY

Marketing in gambling is crucially important – it’s what differentiates your offer and helps attract and retain players. These departments are being asked to do more and more, but haven’t seen pay rises that reflect this increased workload. Plus, tighter regulation creates compliance responsibilities which largely fall on marketing. Facing huge fines, errors can be made easily even by the most junior of executives, creating more pressure from compliance and legal departments.

Marketing departments have some of the lowest career satisfaction rates, and perhaps this increased pressure and the requirement for specialism narrowing career paths have led to the general dissatisfaction. There’s little difference in salary rates between acquisition and retention roles, which are both equally valued, but there’s definitely split between ‘brand’ and ‘digital’, with results-driven digital roles paying more.

We’re also seeing a trend to reorganise acquisition talent into teams of paid social (all social output) and biddable media (including programmatic). A crucial business choice is whether to build this in-house, which can be complex and lead to minimal returns, or outsource to often costly specialist agencies.

Marketing departments also want to bring more skills in-house, in particular, the low-hanging fruits of SEO and content. Analysis, campaign testing multi-channel and multi-testing have become increasingly important in marketing, and candidates really need to show some mathematical ability in their CV.

The data

Based on 2,665 jobs in the periods July 2016-June 2017 and July 2017-June 2018. Jobs were categorised by level according to the following criteria. ‘Executive’ includes those in entry-level, junior and non-managerial roles; ‘Manager’ includes experienced, specialist and department leads; ‘Senior’ includes heads of department, management and leadership. Original salary currencies have been converted into GBP at the rate 1USD:0.75GBP; 1EUR:0.85GBP; 1AUD at 0.57; 1CAD at 0.59; HKD at 0.09; SEK at 0.085; SGD at 0.57. The headline job categories include the following positions: Analytics & data – business intelligence, customer insight, marketing analytics and data management; Compliance, legal & fraud – strategic and operational regulatory practice; Customer services – call and chat operators, live dealing and support; Design & tech – includes technical development, front and back end development, UX and digital design, game design and development; Marketing -strategy, campaigns, digital marketing, CRM, acquisition, retention affiliate and VIP; MD & C-suite – C-level executives including CEOs; Finance & operations – finance, business infrastructure, technical delivery, management and support roles; Product & project – product management and project management specialists; Sales & account management – B2B sales and business development professionals.