Denmark iGaming Market Report: Is this the End for Tailored Promotions?

Denmark is one of the most integral European jurisdictions in regard to iGaming growth. The GGR for this market grew to DKK2.88bn in H1 of this year and shows little sign of slowing down. But with tightening regulation putting a stranglehold on certain aspects of advertising, how can operators still make the most out of this evolving region?

We spoke with Dima Reiderman, Chief Operating Officer of BtoBet to get a clearer perspective on the Danish online opportunity and how this landscape can be best tackled to ensure growth well into the future.

According to your recent report, Denmark GGR between 2012 and 2019 has grown over 24%. Post pandemic, does this region still have the potential to match the same levels of growth? What will be the key market drivers going forward?

“To truly gauge the market’s growth potential, the annual growth in GGR must be viewed in relation to the local economy. Data provided by Danish Tax Agency, Danske Spil A/S, the class lotteries and Statistics Denmark indicate that in 2020 the GGR comprised 0.39% of the Danish GDP. The data further indicates that from 2012 to 2020, the GGR’s share of GDP has been stabile between 0.39% and 0.43%, meaning that the gambling spend every year from 2012 to 2020 has comprised almost the same share of the Danish economy.

“And whilst things may look alarming after the Danish year-on-year GGR for 2020 fell by 8.7% when compared year-on-year to 2019, mainly due to the closure of the retail facilities due to the pandemic, the industry recoiled positively during summer and autumn with October’s GGR of DKK 303 million for the betting vertical being the month with the highest GGR ever registered in Denmark. This is an indication of the future growth potential in the Danish market.

“Having said this, going forward I expect the online to further increase its market share, even if it’s already the predominant channel in Denmark. One has to keep in mind that since 2012 the share of GGR originating from online channels has been constantly on the rise. Whereas GGR from online gambling in 2012 made up 31% of the total gambling market, it constituted 59% in 2020, an increase of 28%.”

New, recently implemented, social responsibility restrictions mean that operators are no longer able to offer tailored promotions. What effect do you think this is likely to have on the ability to provide personalised customer experiences in general?

“Across Europe, local authorities are implementing social responsibility restrictions making it increasingly difficult for operators to launch tailored promotions aimed primarily for acquisition and retention. However, whilst operators have in the past banked heavily on promotions to increase their PLV and drive their acquisition campaigns, it is now increasingly clearer that this is not the solution due to the more stringent regulations.

“It is with this in mind that we have to look at how other entertainment industries, have leveraged the use of data to maximise player engagement whilst shifting their efforts on retaining their loyal fold of players. And this is all about matching the UX with the players’ own personal experience, and preferred content.

“Thus, in order to stand out in the industry operators have to move away from a promotions-dependent strategy and focus on creating a player journey that they can control and incentivise. This is only possible if they have the technology readily available that allows them to nurture their players using real-time data which will, in turn, allow them to elevate their PLV strategies.”

Lottery is the most popular sector in Denmark, which is typically an area of low innovation. Is it possible to leverage Denmark’s affinity with modern technology to take this product vertical to the next level?

“Lottery is surely one of the most neglected verticals in the industry from an innovation point of view. Whilst other products, such as sports betting and casino, have leveraged today’s tech to provide a more engaging UX the lottery vertical has constantly lagged behind. Most lottery operators need to make significant improvements in terms of visuals, and channel accessibility, with the end-product necessitating primarily a mobile-first approach.

“Lottery’s Achilles Heel is engaging the younger generation, and this is where the vertical must leverage today’s tech to accelerate its innovation curve and deliver a product that is built from the outset on meeting both existing and would-be players.

“What Danske Spil has achieved throughout the years in the lottery sector is nothing short of remarkable and is a clear indication that even for the lottery sector data is essential for tailored marketing efforts and to support product development.

“In a recent interview published by Deloitte, Danke Spil explained the benefits of introducing insights based on artificial intelligence and machine learning to reduce the termination rates of their subscriptions, and to increase their revenue and profit on digital and physical lottery tickets, with Allan Auning-Hansen, Danske Spil’s CFO, explaining that embarking on a more insight and data-driven approach, has led the company to have a better understanding of what the future might look like.

“This is what the entire sector must aim to replicate. A visually crisp experience in parallel to a data-driven approach to increase engagement, in a tentative to be more appealing to the newer generation.”

Land-based casinos are still being severely impacted by closures due to the Pandemic. Do you anticipate a fall in online casino activity once land-based casinos are back to full operational capacity? Will they ever be at full capacity again? 

“Currently, traffic in land-based casinos is reduced, but it’s not simply due to online casinos. With the restrictions that had to be put in place, foot traffic has reduced on a global scale, and this was mainly also due to the restrictions on indoor capacities.

“However, whilst the land-based sector has been particularly hard-hit during the pandemic, numbers and statistics indicate that online gambling has been steadily improving. But how much are these numbers solely related to existent players shifting towards the online channels?

“Studies have shown that people who have never gambled before have tried out their luck in gambling for the first time. The fact is that online casinos are becoming increasingly more popular. And this may be due to a number of reasons, such as many online casinos allowing people to try their games for free. Somebody who today is indulging himself in a free online slot game could well turn up and create an account tomorrow.

“But the convenience of online casinos does not in any way preclude the operations of land-based casinos. Many major casinos have evolved into major entertainment resorts, with the various on-site amenities adding to the overall experience. One has to keep in mind that the traditional land-based experience is one that the online channels cannot match at the moment.

“Thus, I am of the firm belief that whilst it is true that the online is increasingly gaining traction, physical casinos will be able to bounce back once normality returns.”

Editor’s note:

From speaking with Dima it’s clear that there are some clear growth opportunities in Denmark, especially in lottery and sports book. The success of these verticals will be driven by tech innovation, drawing on that Nordic tech culture and driven by a purposeful move away from promotional dependant strategies.

Going forward we can expect to see an increased market focus on creating a player journey that can controlled and incentivise. An exciting future ahead for this well-established market.

For information on the Danish market please be sure to download BtoBet’s insightful market report, free of charge.

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