Opinion: Egaming heavyweights face unique challenges in 2014
eGR editor Tom Washington outlines the key areas which could signal success or failure for the industry's top five operators
The New Year is here and as the egaming industry awakes from its festive slumber, the big guns are already preparing to make 2014 the biggest and best yet. The football World Cup this summer will provide a welcome boost to all sportsbook operators and there should be some more reasons to be cheerful as the likes of the Netherlands and more US states move towards regulating online gambling, while slots are likely to be permitted in Spain before too long.
But as ever the path to success is long, winding and full of potholes, not least the 15% UK Point of Consumption (PoC) tax set to come into force during December. All operators with significant UK revenues face a hit on profits and preparation is well under way to offset its impact. One operator tells us they have drawn up more than 40 ways to offset the PoC tax, and the need to diversify and generate non-UK revenues is getting more important by the week.
We can expect a huge marketing battle to ensue in the run up to the summer and those with the deepest pockets will fancy their chances of grabbing market share before the year is out.
Outside of UK regulation, however, here’s where I think eGaming Review‘s top five operators (according to our latest Power 50 list) face their biggest challenges this year.
Bet365‘s global reach will no doubt see huge volumes of activity thanks to the World Cup. Top of the agenda will likely be the expansion of its Australian business, the size of which is perhaps not reflecting the amount spent on marketing in the country. If bet365 enters the Italian market during 2014 as some expect, it will again face stiff competition from local operators and high CPA. Its relative immunity to the PoC tax is a bonus.
William Hill made big moves last year and 2014 is all about bedding in those changes. Substantial revenues should arise from Australia as the integration of its Sportingbet and Centrebet businesses goes on, while a big push in casino marketing could prove fruitful in the UK. A key challenge appears to be in branding and whether it accelerates the expansion of the global William Hill brand as it looks set to do in Spain, or takes a longer-term approach and keep its acquired brands as it looks set to do in Australia.
Paddy Power’s product range and of course marketing clout remains the envy of most, however it faces an interesting few months on the back of some senior departures across the online business. Among others it lost its highly thought of head of gaming Isaac Ward to Australian bookie Tom Waterhouse, while head of bingo Oonagh Flanagan left to join Gala Coral. Meanwhile there is still little sign of a deal to facilitate entry in to the US market.
888’s casino and poker business is ticking along nicely, and attention must now switch to bingo and sportsbook in 2014. The latter currently accounts for just 2% of revenues and it must hope that a new app launch timed in conjunction with a World Cup year provides a catalyst for growth. That will be easier said than done given strength of competition “ not least the operators mentioned here. Bingo is currently undergoing a complete revamp, too, but whether that will send revenues in the right direction in the current market is anyone’s guess.
Bwin.party is arguably facing the most crucial year of all the top five operators. 2013 was tough but the PartyPoker relaunch and the US provided silver linings. This year will provide many more answers about its prospects this side of the Atlantic, and all eyes are on the imminent sportsbook relaunch and multi-product mobile releases to see just how positive 2014 can be. Competition in both areas has never been tougher so bwin.party might only have one chance to get it right.
In other news:
– Online bookie Canbet suspends trading as customers await funds