Innovation and Regulation, In Conversation with Helen Walton, Founder of Gamevy and CCO, Gluck Games
With recent global events, technology and regulation have been forced to evolve at a pace quicker than ever before. It’s widely accepted that this paradigm shift will continue to shape gaming for years to come, but how will this impact innovation and the ability for operators to gain a competitive advantage at a time where they need to differentiate themselves more than ever?
After looking at player experience and pipeline in Part One of our interview, we spoke again to Helen Walton, Founder of Gamevy and Chief Commercial Officer for Gluck Games to hear her perspective on innovation in the industry, whilst paying close attention to regulation.
Many believe that our industry needs to do more to encourage innovation. What impact do you think the pandemic will have on future industry innovation? What can we do, as an industry, to ensure we are being as innovative/creative as possible?
“In general, I think innovation comes from two places – either a burning platform that requires immediate and desperate action (whether crashing sales or unexpected competition) or a relentless and honest focus on the full range of innovation from incremental improvement to radical moon shots and an acceptance of the failure rate that runs alongside that.
The iGaming and lottery industries have neither the pressure for the first nor the commitment to the second – despite the number of people who worry about both.
Key, I think, is to stop fooling ourselves. I don’t know if people believe it when they call a slot that happens to be presented as round, not rectangular, ‘breakthrough innovation’ or not, but it’s absurd.
Regulation also plays an interesting role – it’s not there to encourage innovation, but to protect players and so it’s not really surprising that regulation can often have a chilling effect on innovation.
The long term impact of that, I am convinced, is bad for end users, but its perhaps predictable that the issue hardly seems crucial to regulatory bodies more concerned about media and political pressure.
They only respond to novel types of near-gambling (loot boxes, in-app purchases aimed at children etc) when they make negative headlines, as opposed to finding ways of supporting, guiding and restraining a broader ecosystem of real-money entertainment.”
Integrating new games across various platforms and jurisdictions can be a major strain on resources, having to adhere to different regulatory/licensing frameworks. How can we as an industry (suppliers, operators and regulators) work together to make this process less of a burden?
“Well obviously installing me as a world dictator able to lay down a single language and set of standards would be helpful, but since that seems to be gathering fewer votes than you might expect…
There’s an interesting trade-off between the commercial upside of localisation and the lower costs of standardisation.
I certainly wish regulators would talk to one another more and perhaps agree on a set of objectives.
In general, many of the regulations are often counter-productive, I believe – such as differing RTP minimum levels that are only 1% apart or rules around collection mechanics or jackpots that don’t seem to meet any actual objective of fairness or harm prevention.
One of the issues that I don’t hear much talked about, is that heavy regulation can be a benefit to larger operators and suppliers – it raises the barrier to entry meaning that smaller start-ups can’t compete and benefits the incumbents. This lack of competition (hidden and unacknowledged as it is) is not to the benefit of either end users or regulators in the end.
What would be really welcome (and would actually contribute to the innovation whose lack is so often lamented), would be a lighter form of licence granted to those who wished to experiment, available to products generating only small amounts of revenue.
The insurance industry recently did something similar to support the insurtech industry and indeed the charity lotteries rules allow smaller licences that can support smaller players and promote innovation.”
What are the future gaming trends you think operators should be looking out for in order to maintain a competitive advantage?
“The big ‘lacks’ in iGaming have not changed in many ways for several years, and in spite of varying attempts, no company has really succeeded in stand-out innovation.
Lottery needs to reverse the reductions in mass participation it has seen if it wishes to remain a part of the social fabric, as it represents itself. It needs to find ways of engaging younger players and offering them an experience or entertainment which they regard as value for money.
Casino also needs to try to broaden its appeal, since an over-reliance on high value VIP whales risks a continual barrage of bad PR and potentially disastrous clashes with regulators, while the creation of a deal hungry, promo hunting customer merely squeezes margins.
For game suppliers, the increasing commoditisation of their product (be honest now, can anyone except a casino manager tell one slot from another?) offers diminishing returns and a continual churn of product that in itself inhibits change.
Once the inevitable consolidation of M&A has run its course through suppliers (in response to operators), other ways to protect margin will become a necessity.
No one has yet successfully harnessed the passion and scale of esports in real-money gaming; the ‘next poker’ a competitive social form of real money gaming feels equally distant, and the creativity and mechanical experimentation of social gaming that makes the most of the possibilities of mobile technology, from story-telling to physical interaction, still feel like the province of ‘trend agency presentations rather than actual launches.”
Editor’s Note: To conclude, it seems some of our industry’s biggest hurdles can be overcome if we can better embrace innovation as a community. It seems that the smaller, young, ambitious companies who are probably best positioned to deliver these innovations to market are being stifled by the very regulation meant to be protecting them.
Increased barriers to entry are at risk of creating an environment where only large corporations can exist successfully, squeezing out the smaller guys and homogenizing the market.
Hopefully, in the future, we can see clearer steps taken towards supporting this section of the industry, for the benefit of the market as a whole.