The Future’s Here, It’s Just Not Widely Distributed Yet: Q&A with Jeremy Taylor, MD, Genting Online
One of the few product verticals to actually benefit from the Covid-19 lock down was online casino. New propositions such as live streaming and hybrid RNG games are driving strong growth within this market. It’s land-based counterpart, on the other hand, has suffered greatly from site closures and the future is very uncertain for this sector. Can live casino save the day? And how can we cater for the traditionally land-based customers who are ‘lost at sea’ with nowhere to play?
We caught up with Jeremy Taylor, Managing Director of Genting Online to find out what his experience of the pandemic has been and also to get his thoughts on the online casino market and where the future growth areas will be.
What sort of impact did the pandemic have on your operations and customer activity?
“I think it makes sense to look at this by sports and casino separately. Sports, which is a smaller part of our business versus casino, was obviously completely lost. This was barring some virtuals which we maintained some business on.
Similar to many other operators the bulk of the sports business was lost.
On the casino side, we actually get a lot of our business through our live streaming proposition from our land-based business.
These were live casino tables that were streamed from our own clubs. With the hubs having to close, we had to also close those tables.
That had a large impact on our live casino business. Some of our suppliers such as Authentic and Evolution had to also close some of their studio tables and some of them haven’t actually fully reopened yet.
Authentic, also have their own dual plays from the likes of Foxwoods in the US and Denmark and Germany, but they’re still closed. So, that’s been the biggest impact that we’ve seen on the casino side.”
How long do you think it will take the European market to recover?
“With sports coming back I don’t think it will take any time for that side to recover.
For us, with regards to the clubs, and for others like Rank and Aspers, they’re supposed to be opening at the end of this month, but then again, they were supposed to be opening at the start of this month. Some have already opened actually as of last Saturday, those outside of lockdown cities.
We know that there are compromises and a lot of safety measures that need to be put into place (with restrictions of people around the tables and so on).
It’s not going to go back to normality overnight. It’s going to take probably six to twelve months before the land-based casino businesses get any kind of normal business levels.
In regard to online, the casinos have not been impacted other than the live studios. As soon as those studios can open, which should be a matter of months, then it’s back to normality.
A key consideration is also on the disposable income and affordability of the players and how badly they’ve been impacted through their own employment status.
As responsible operators we need to make sure that that all customers can afford their game play. If we see that people’s affordability levels are impacted, then that’s going to have an impact on the industry for all operators.”
There’s been some exciting headlines the Evolution and Netent merger. Do you think this means that live casino will be the future in terms of market growth?
“Yes. I think there’ll be a lot more growth coming from live casino for many factors.
To quote William Gibson ‘The future’s here, it’s just not widely distributed yet’.
There are many markets where live casino just hasn’t taken off yet and this could simply be because of the customer behaviours and/or technological infrastructure. They may not have fully embraced online yet because they’re still used to the landbased side.
It could also be that internet or mobile technology hasn’t progressed as fast as say, the UK.
Then you’ve got the progression through certain new products, innovations like monopoly or lightning roulette, which certain markets or customers just haven’t caught up on yet.
I think there’s a number of different layers to the growth, depending on the market that we’re talking about. Even if you were to take some of the more advanced markets, when you consider the likes of Netent and Evolution coming together, there’s naturally going to be synergies in innovative ideas.
There’s going to be arguably the best RNG slots coming together with the best of live casino, which then fuels the hybrid products. The types of lightening roulette, monopoly, crazy time, which are filling the middle ground between RNG and the entertainment factor versus the real traditional live casino games.
Then you’ve got land-based, people will always want that authenticity of a real casino experience.
We stream from live casinos to our online websites and we’ll continue to do that as I’m sure others will do too. We have our own expertise through Authentic Gaming who specialise and lead the way in the convergence between land based and online live casino. As that experience continues to become more and more real (with maybe augmented reality overlaid) that’s going to drive that product category forward.
Is it going to be the fastest growing category?
It depends on what happens in the likes of slots. At this moment in time, I can’t see where slots are heading, other than merging into other product verticals, like live casino and RNG coming together and having multipliers and a game show format.”
Is it possible to recreate the land-based customer experience digitally and what are some of the most important aspects that that require consideration?
“As far as a pure table experience goes, yes. Clearly, you’re not going to have the bar to be able to go and visit and other areas of a physical environment.
But if you’re sitting at that table and if you can show the dealer, like Authentic Gaming do, then it becomes more real. .
If the dealer can actually be shown and the speed is real, almost real time, (which it’s getting to be now), the only thing that’s missing is being able to physically see other customers.
However, seeing other customers currently poses a problem because of data protection. Some customers don’t necessarily want to be seen live on the internet.
But if we can overcome this challenge, and if it can become a reality in the future (where people sign up to being seen sitting at a table) then really what’s the difference?
You’re sitting at a table with a virtual seat, but you’re seeing everything a customer would be seeing in the actual club themselves. Add more content overlaid to this experience that you can’t get in the clubs, and it’s the best of both worlds. There will always be the traditionalists that want the authentic live casino experience.”
Did you see any increase of traditional Sportsbook customers switching to casino products? Did you learn any lessons or gain any new insights to use for the future from cross selling between sports book and casino?
“For sure. A sports book for most operators is a natural acquisition source for casino players.
Predominantly, we see sportsbook customers coming into live casino. It doesn’t mean that they don’t also eventually play slots or even play them first, but the large majority that do cross sell, come into live casino.
More often than not it’s because they’re filling a gap in their live betting. If it’s halftime in a football match and they’ve been betting live, they’ve got that window to go and have a quick dabble on a live casino table in real time. Our anecdotal evidence and research suggest it’s what they favour.
There are more and more products coming through that facilitate this, such as mini games that pop up within a sportsbook and take people to either RNG products or live casino.”
Do you expect to see more iGaming regulation coming out of Europe in the near future to help speed up the loss in tax revenue?
“Yes I think there will be more countries that will regulate. Since the UK regulated, it’s kind of gone one by one, for example Italy, Denmark, Sweden. They’ve all given their own take on it.
Spain and some other countries have obviously clamped down on the back of being regulated.
They’ve started to put firmer restrictions in Sweden, which seems to be (depending on who you talk to) a love it or hate it type of market with how they approach things.
Italy and Spain have clamped down on advertising restrictions, which ultimately slows down the online growth and channelisation; you can see that from the numbers.
I think other markets will naturally regulate as they begin to see there’s more wins for the authorities in regulating and protecting the end customer and stopping black market operators coming in. They’re starting to see that they’re not getting as much revenue as they would do if they just opened up the market properly.
Germany and Netherlands are clearly going through that discussion right now and It’s about striking the right balance between the level of taxation and regulations imposed on Operators.
Netherlands are around 30 – 31%, which is obviously extremely high. We would probably say, as an operator, that it’s too high.
Then you’ve got others that have gone down to the levels of 20%, for example, Spain are attempting to improve channelisation and get more regulated revenues coming in at the 80% level.
I think there will continue to be tighter regulation within already regulated markets, and I think those that aren’t regulated will start regulating.
With this brings huge opportunity but also a lot of considerations for operators depending on whether they are already present in that market or not. One things for sure, there are still a lot of growth opportunities for online gaming out there.”
Editor’s Note: To sum up, it seems Jeremy is feeling optimistic for the future of online casino and he has good reason to be. Being a completely digital product makes it ‘Corona proof’, with the new innovations they are able to provide a similar experience to a land-based game and an increasing number of jurisdictions are passing legislation for it. As usual, tax levels will play a critical role in which markets are most competitive, but I believe this is not a problem exclusive to online casino.
However, as also mentioned by Jeremy, the impact of the lockdown means that many customers will experience a decrease in disposable income, so the pressure on operators to be extra vigilant is higher than ever. There are definitely some exciting growth opportunities within the online casino sector, but it also comes with increased responsibility in these unparalleled times.