Industry predictions: California go-live now odds-on for 2022 and an increasing focus on ESG

Guy Harding, commercial strategy and safer gambling director at Oddschecker Global Media

California go-live now odds-on for 2022…

So there are four proposals in place. The first is backed by the cardrooms and the cities in which they’re based, the second is from the tribes, the third is Flutter, DraftKings etc., and the final one is another tribal proposal which has been submitted by a different group of tribes and is in conflict with the original tribal motion. The tribes want a period of retail exclusivity, but given how numerous and fragmented they are versus Florida they should be far easier to appease. The online guys have said they will spend about $100m in lobbying, compared to the tribes at $12m, but crucially the online operators are saying the tribes will be the licence holders, so they will still get paid. This is key. The online motion is complementary to the first tribal motion, so they can both pass.

The vote will take place in November but we should know by June whether it will go ahead. The online operators are saying their ballot is backed by 62% of voters, according to their own polling.

I understand that there is language in the original tribal proposal that says it can be superseded by another initiative, which I am led to believe means they would implicitly back the online proposal, and as such I make California a far likelier 2022 proposition than the market currently imputes.

UK marketing channel options will tighten, affiliates that genuinely serve a purpose will become even more indispensable to operators

As marketing directors scramble to assess the likely impact from Q2’s thrice delayed white paper, operators will look to mitigate for the new measures which are likely to land in 2023. Affiliates, in my eyes – especially those that provide a genuine ‘service’ to the punter whether it be through news, experiences, odds comparison, stats, data – will become ever more imperative to drive brand awareness, share of voice, FTDs and reactivation for the operators looking to cement their position in a totally transformed UK betting market.

Punter’s trust in operators is at an all-time low, so affiliates are perfectly placed to provide a platform to augment not only an operator’s product offering but also their reputation.

Accas set to become fashionable again

Let’s face it, RABs and Bet Builders have had a sterling five-year spell, regularly accounting for a third of operator’s football gross win which isn’t surprising given their purported gross win margin of around 30%.

Rest assured, this recreational business isn’t going anywhere anytime soon and nor should it, as it’s the perfect product, loved by punters, operators and regulators alike.

Despite this, I do foresee the lesser-spotted Acca making more of a comeback. It’s fallen out of love a bit with the coupon now often too well hidden on bookie apps to attract much passing trade. That said, the alacrity with which a punter can ascertain an acca’s value vis à vis a related contingency bet type means I am confident there’s life in the old dog yet, and oddschecker are working hard to create an acca product experience that will bring them back to the forefront of recreational betting.

Listed equity prices to remain unsettled until regulatory guidance becomes clearer

Given online slots alone are bigger than the entire online sports betting revenue pie in the UK, it’s not surprising that equity prices, especially those with considerable UK casino exposure, will continue to wobble well into Q1. My longer term outlook is more sanguine. Prices should enjoy a fillip once regulatory direction is cemented, their listless performance of late can partly be attributed to the ambiguity and uncertainty concerning potential changes not least the unhelpful noise surrounding affordability and the nebulous commentary that has ensued.

The UK’s gambling landscape is ever more reminiscent of a utility (or at least the utility market before Ofgem let any man and his dog start one from their kitchen table). Highly regulated, oligopolistic, and with differentiation mainly realised via price and branding, you can see why I remain highly confident that affiliates with breadth and credibility will safely weather the headwinds of 2022 and continue to build deeper relationships with partners and punters alike.

Adam Rivers, director, KPMG Economics

An increasing focus on ESG

The benefits of a well-considered ESG strategy are clear, and include reduced costs of financing (including a recent refinancing in the sector), greater potential to attract and retain talent, and for those operators of a certain size it is becoming a regulatory requirement in addition to a board-level expectation. With more focus on ESG, it will become a further competitive differentiator in 2022, with some operators already going public on their initial approaches.

Convergence of the sector and broader media

The industry is beginning to adjust its mentality around the broader ecosystem it sits in. This will include the convergence of the sector and broader media, including the expected entry into betting by media heavyweights (e.g. Disney, DAZN). We expect traditional gambling operators to place greater emphasis on developing their own media content, either organically or through strategic acquisitions.

Revisitation of the customer experience

Driven by a combination of regulatory expectation and the points above regarding convergence with media, we are already seeing clients wanting support to improve their end-to-end customer journeys – from onboarding and compliance through to the actual product offer and ongoing interaction. Customers increasingly expect a personalised, low-friction experience when interacting with any brand, and operators are beginning to revisit how they provide services to customers to meet these demands.