The latest industry statistics from the UK Gambling Commission show that online gambling (or ‘remote gambling’ as the UKGC terms it) now comprises 32% of the UK’s overall gambling market, and produced a gross gambling yield (GGY) of £4.5 billion for the period October 2015 – September 2016. Of this, the GGY for online sports betting (largely betting on football and horse racing) was £1.9 billion, while the GGY for online casino games (predominantly slots) was £1.6 billion.
Previous data released by the UKGC for the period April 2014 – March 2015 showed a GGY for online gambling as a whole of £2.24 billion, with online sports betting showing a GGY of £1.6 billion and casino games £2.5 billion. What these figures would seem to suggest is a significant growth in the UK online sports betting market somewhat at the expense of online slots and other casino games.
In the light of this, it is interesting to look at the how three different sports betting software developers are responding to (or in some cases, leading) this shift, as well as how the industry as a whole might be expected to move forward in order to better meet the changing needs of both online betting operators and punters.
Degree 53 is a Manchester-based gaming software developer that has been up and running since 2013. It specializes in mobile apps and website development and is establishing a growing presence in the UK online sports betting market.
Specializing in developing iOS, Android and web apps, Degree 53’s software is licensed to a number of leading UK and international sports betting brands, including BetFred, Football Acca, Freebets.com, Bookies.com, Totesport, Horse Tracker and The Sportsman.
Degree 53 is extremely well-placed to capitalize on the growing omni-channel approach to online betting as a leading producer of mobile and web apps, as well as websites. In particular, the company is well positioned to capitalize on Google’s recent decision finally to stock real money sports betting apps in Google Play (read more below).
Playtech has long been a leader in online gaming, and is currently one of the major players in both UK online sports betting and casinos. There are more than 130 licensed operators using Playtech software, and it’s one of the most dominant players when it comes to combined sports book/casino sites, largely through its Exclusive Tabs which enable sports betting operators to offer Playtech casino games and slots (usually under the Vegas label).
Under the name Playtech BGT Sports, its sports betting software is used by a significant number of leading UK sports book operators, including Ladbrokes, Paddy Power, William Hill, Coral, bgo and Winner, and the company also has a significant presence in government-run lotteries globally and a number of newly-regulated international gaming markets. It has also recently acquired the smaller software developers Quickspin and Eyecon.
The omni-channel approach to online gaming, which is one of the major areas of continued growth for the industry, was first developed through the Playtech ONE platform, enabling players to play across platforms, devices and products using a single account. The company still continues to be a market leader in this space, and going forward we can expect to see even further concentration on its omni-channel gaming solutions.
Playtech is also a dominant player in the provision of Self Service Betting Terminals (SSBTs) to sports books with land-based UK betting shops, and has recently expanded its presence in this market after signing new agreements with a number of independent bookmakers and extending its deals with BetFred and BoyleSports. This too is an area where industry observers expect to see greater innovation and expansion, with Playtech once more leading the way (read more below).
Winner of the Sports Betting Supplier prize at the 2017 EGR B2B Awards, the Swedish developer Kambi provides software to a growing number of prestigious online sports book operators, as well as several national lotteries. Listed on the Swedish Stock Exchange and ranked 657 in the Financial Times’ inaugural list of Europe’s fastest growing companies, Kambi now has a global presence with offices across Europe, the Phillipines and Australia.
Its notable recent successes include becoming the sports book software supplier to the powerful 888 Group in 2013 (the contract was further extended in July 2017), as well as signing a new deal to provide sports betting services to Bulgaria’s National Lottery AD through its 7777 brand in July 2017. This is in addition to the company’s partnerships with other leading gaming operators such as 32Red, Leo Vegas, Mr Green and UniBet.
Noted for its emphasis on the end-user experience, it is increasing its reach all time, as demonstrated by betting affiliate sites like Playright which feature many bookmakers running Kambi. Emphasis on the customer and personalization of the gaming experience, in which Kambi leads the way, are areas where the industry expects to see continued development as a means of engaging a new player base.
Software developers need versatility and flexibility for market share
What both the UKGC figures and recent research by iGaming Business would seem to suggest is that for companies to attain a significant share of the UK online gambling market, they need to be versatile and flexible in their offerings — in short, they need to be able to do more than one thing.
Playtech is a good example of this. The iGaming Tracker data used by iGaming Business showed that Playtech is the dominant player in the UK online casino games market across both sports betting sites that offer casino games, as well as casino only (or ‘pure play’) sites.
What is noteworthy, however, is that Playtech’s first place market share across both of these sectors depends significantly on its Exclusive Tab located on a number of leading sports betting sites (it supplies these sites with games under the Vegas label). Without the Exclusive Tab, Playtech ranks eighth in sports book sites market share, and fourth in the ‘pure play’ rankings, according to the iGaming Business data.
This analysis therefore suggests that, going forward, we can expect to see software developers doubling down on the omni-channel approach as one way of increasing exposure, revenues and market share.
What might the future hold?
Google Play store to offer real money gambling apps
In early August, it was announced that the Google Play store is now open to real money gambling apps from operators based in the UK, Ireland and France. Up until now, sports betting brands with native Android apps have had to offer them for download via their own sites and other third-party channels (often a slow and cumbersome process), and so this will no doubt turn out to be a significant game changer.
This represents a major opportunity for software companies to better exploit the market for native sports betting apps, as this greater accessibility is expected to fuel increased demand. Degree 53, for instance, has been very quick off the mark in response, highlighting its portfolio of successful mobile app development projects and its position as a market leader in this space.
Sports books operators seeking to stand out in a crowded marketplace
With sports betting software developers able to offer a variety of turn-key solutions, and with multiple online sports books using the same software, one of the biggest challenges operators face going forward is being able to distinguish themselves and to stand out in a crowded marketplace.
Online punters are increasingly looking for flexibility and personalization, for instance, as well as a more social element to betting. Sportsbook operators seeking to offer something different may well attempt to do this through the specials and bonuses they offer players by placing a greater emphasis on using data to create tailored deals. The key, according to industry watchers, is flexibility, and being able to respond rapidly to changing tastes and demands.
For instance, online sports books like Paddy Power, Sky Bet, BetVictor and William Hill now offer prices on request via Twitter and other social media platforms. Using specific hash tags around high profile sporting events (e.g., #RequestABet at SkyBet or #PriceItUp at BetVictor), punters can request their own unique prop bet markets, which increases both relevance and engagement. Greater moves towards this sort of responsiveness, personalization and use of social media are seemingly inevitable, and would appear to be a highly effective way of online sports books differentiating themselves from their competitors.
Leading on from this, it is also reasonable to expect that some operators will begin to place a greater emphasis on e-sports betting as a further way of attracting and engaging new players.
Sports book operators who are also able to increase the appeal of Daily Fantasy Sports betting in regulated markets such as the UK (DFS thrives in the US because licensed online sports betting is not available) may also be able to mark themselves out from competitors, although the take up of DFS outside of the US is yet to reach great heights.
Merging retail with omni-channel
Despite the rise and rise of online betting, for many operators in the UK retail betting (i.e., betting shops) is still a significant core of their businesses. For these brands, successfully being able to integrate retail, mobile and web betting into one seamless product that offers digital features, such as in-play betting, significantly increases market penetration, and we can therefore expect to see greater innovation and attempts at integration in this area.
Retail betting also presents many opportunities for software companies as well, with Playtech being a leading player in this space through their SSBT deals with operators like BetFred and BoyleSports.