“Mike Tyson once said that ‘everybody has a plan until they get punched in the mouth’ and Covid-19 has been like a punch to all our mouths.” Itai Zak recently said.
But how are these punches shaping the future of the iGaming industry?
We caught up with Itai to hear his perspective on the silver linings and opportunities for iGaming growth in the near term future.
What are the biggest opportunities for casino operators that we will we see emerge from the pandemic?
“One of the things that this pandemic has taught us, is that you should not rely or focus your business on one vertical or product. Secondly, the more that you’re relying on physical presence with land based casinos and betting shops, the more difficult a position you can end up in.
So, I see a variety of opportunities.
Starting with the product side, more and more operators who were initially sports betting and land based focused will be switching online and into other verticals, whether it’s esports, whether it’s casino or whether it’s live dealer. We will see many operators, who used to primarily focus on land based betting or even sports betting, moving online and into more verticals.
I think that also like in every other crisis, when the dust settles, there will emerge much larger and much stronger organisations. This will lead to more M&A and JV activity as businesses will look at ways to save costs and capitalise on product synergy.“
When there was a lack of live sports there must have been a crossover of players of some sorts, how will this shape the future for online operators?
“When we look at crossover, a proportion of players will basically continue to play your other products, but the moment the sports events resume, the players will return to their natural behaviour. As long as there are no sports events then the players will look for whatever decent alternative, we can give them.
A core focus should not be the crossover but growing the variety of your products, as you can cater for a bigger type of player. We will see a more holistic CRM, meaning you can tailor the right offer to the right type of player. The more variety of verticals operators have, combined with very strong analytical technical capabilities, the more tailored the crossover can be.”
What impact will the increase in land based casinos migrating to online have on the market?
“The land based community were forced to find additional revenue streams very quickly, with online often being the best option. I think that we will see even more land based casinos and more businesses speeding up their plans to move online. Previously it was not a high priority, it was somewhere on the road-map for the next two or three years. We will see these decisions being accelerated; you could even call it “the race to the get online”.
This will trigger several things. One of them may be M&A, as the land based casinos may not have the right online experience and will want to speed up the launch with businesses who already have the right technology and CRM.
We might also see more investment in marketing and acquiring players as loyalty will become difficult to maintain. To make the players come back to you, when there are more and more choices, we will see innovations with promotions and CRM.
One of the critical success factors, for land based businesses going online, is to create some kind of a unified system. If players come to a physical location after playing online in any way, you can already know their preferences. For example, if they are a VIP.
The more you can create a synergy between online and offline through one smooth transparent system, the more the land based casinos will be differentiated.”
Is it possible to cross sell land based to online? Or will land-based people always remain land based?
“It’s tricky. Obviously in times of the pandemic, when there are no land based businesses, it’s easier to cross because the player will not have much of an option. But then when things become normal, as I said earlier, player habits are very strong.
However, mobile is something which has become natural and common for everyone. I’m not saying its easier, but it’s a more natural way for the player to migrate from land based to online.We’re seeing that when you’re able to offer the player a really good experience online, very similar to what they’re used to in a physical location, it allows the operator to cross more and more players.
To achieve something like this you’ll need the CRM team, the analytics team, the product, and technology team all in place; which can be quite an investment.“
We’re seeing a lot of new regulation coming out from Eastern Europe markets. Is that where the growth will come from in Europe? As Regions such as the UK are saturated now.
“I think it’s pretty obvious what’s happening in the UK. More and more businesses are doing the legal assessments and realising that maybe this is not the market they can be highly profitable in. The regulation will stay, we cannot fight it, we need to embrace it.
I’m not sure that the Eastern European market is going to be the main region. Obviously, the US is a very, very big opportunity and still only in its very early stage of development. Some countries in Asia are now also now showing potential.
This pandemic has forced governments to look for almost any possible means of getting additional tax revenue. This might be a very positive trend for the industry, especially if the regulator understands they must work together with the operator. Compliance and responsible gaming are extremely important, particularly with the right regulation. But we need to find the right balance between creating a safe and protective yet fun and entertaining environment, and not a harmful one for the players.”