Gambling Industry Ripe For Innovation, CEOs Say

This article originally appeared on the Betable blog. 

The gambling industry is not typically seen as an trend setting industry, and most companies operate an “if it ain’t broke, don’t fix it” strategy. However there are finally signs that this attitude may be changing, as consumer demand and increasing competition drive change in the traditional industry.

For years the industry has been working with false sense of security, fostered by the huge amounts of revenue that, in the past, was easy to earn. But times are changing. Just look at US casino companies' historic opposition to online gambling. Now nearly all the major US land-based companies are active proponents of online gambling.

In Europe, the online industry appears to be reaching a similar volte-face regarding the need for technological innovation. At the EiG conference in Barcelona last week, a panel of executives from some of the biggest players in the gambling industry admitted that innovation has been lacking.

Mor Weiser, CEO of Playtech, one of the world’s largest suppliers of gambling games, told delegates: “We have seen some innovation on the product level—in my opinion it is not enough—but definitely on the CRM and customer journey aspects, we haven’t seen any innovation.”

 “Even from the existing player base, you can get more and provide them with a better experience [with innovation],” he added.

It is not rocket science. Push notifications, single wallet, improved mobile products, streamlining improved login were all cited as areas that are still relatively foreign to gambling sites, despite being de facto elements of e-commerce and gaming offerings.

As Magnus Silfverberg, CEO of Swedish-based gambling operator Betsson pointed out: “These things are common outside the gambling industry. Its not really innovative if we send push messages.”

There have been few innovations since online gambling became popular in the late 90s, and almost all of those have been in sports betting products.

In 2000 Betfair launched the first betting exchange, which allowed peer-to-peer betting on sport for the first time. More recently bookmakers have pioneered in-play betting, allowing gamblers to follow a sports game and place bets on individual events within the game in real time.

Casino, poker and bingo, however, have remained largely unchanged since they were brought online. Rush Poker, which allows players to jump to a new hand as soon as they fold, was an excellent reinterpretation of the classic game, but did not change essential experience of poker. In all other cases, graphics have improved, but the game content itself remains unchanged. 

A panel of gambling CEOs admitting that innovation is needed is a sign that the times are changing for the online gambling industry, and they seem equally convinced of where the innovation is going to come from.

George Zenzefilis, managing director of Italian gambling firm Intralot said:  “I agree we are waiting for the next big invention, but it will come definately out of the mobile space. It will come from the mobile way of thinking.”

“We all know that interactive devices with touch are very different. This will change both the nature of the games and the way players interact with the games.”

Obviously at Betable we would agree with this view, but it is interesting to see even the traditional industry players admitting that change is needed. Four years ago gambling CEOs were not talking about the need for innovation, they were telling delegates why social gaming was not important and why mobile gambling wasn’t going to be a core focus for their company.

Fast forward to 2013 and mobile and social were the main topics at the EiG conference, companies are seeing triple digit growth in mobile gambling revenue, and far from the over priced disaster it was supposed to be, IGT’s $500m acquisition of Double Down Interactive is increasingly looking like an inspired move.

The industry seems to be realizing what others have actively been saying for some time; gambling companies are at a tipping point, where they will either innovate, or be left behind as new entrants come into the market. The online gambling industry is set for the biggest change it has ever seen, and despite the cooling effect that heavy regulation has, it is going to come quickly.

I think Betsson CEO Silfverberg had it right when he told delegates in Barcelona, “Regulation doesn’t matter. If there is consumer demand there will be innovation. It is always the operators most innovative in technology that will drive the market.”

So the race to innovate is on, the question is who gets their first.