About the report Executive Summary Online gaming core delivery channel/ opportunity in marketplace - and expected to increase significantly over next 12 months - Broadly considered a growing segment with untapped potential – that appeals to younger generations - In turn, approximately ¾ are ‘optimistic’ about own organisation’s performance during timeframe Sports Betting (in USA) also key anticipated opportunity in gaming industry - Upcoming (positive) change in US regulations and (potential) huge market size core drivers Biggest threats to gaming industry focused on strict regulation and illegal/ irresponsible operators - Perception that strict regulation has a detrimental impact on industry growth and innovation, whilst burdening operators with high financial costs of compliance - In turn, illegal and irresponsible operators thought to yield an unfair competitive advantage over those compliant, whilst causing stricter regulatory environment through malpractice - Similarly, regulator and operator behaviour (i.e. compliant / non-compliant) most likely to impact businesses – positively or negatively dependant on nature of behaviour Expansion into new markets and negative industry perceptions most important prompted developments - USA and Africa core new geographical markets exciting as potential expansion targets Business development and innovation key senior roles identified to drive business growth - Second tier mentions included roles across new product development, marketing and sales Artificial intelligence and blockchain are key technologies panel would invest in -Secondary themes included machine learning, online gaming and virtual reality Executive Summary This bellwether report was conducted between 15 February and 5 March 2018 with Clarion Gaming’s Ampersand Group to gauge the level of optimism/pessimism in the industry and to identify some overarching industry trends emerging in the sector. 150 responses were received and the report summarises the survey results. Ampersand is an 800-plus strong group of industry experts and advisers who have joined to help drive Clarion’s event and content strategy and set up as a networking opportunity for the sector.
Transcript
About the report Executive SummaryOnline gaming core delivery channel/ opportunity in marketplace - and expected to increase significantly over next 12 months - Broadly considered a growing segment with untapped potential – that appeals to younger generations- In turn, approximately ¾ are ‘optimistic’ about own organisation’s performance during timeframe
Sports Betting (in USA) also key anticipated opportunity in gaming industry - Upcoming (positive) change in US regulations and (potential) huge market size core drivers
Biggest threats to gaming industry focused on strict regulation and illegal/ irresponsible operators- Perception that strict regulation has a detrimental impact on industry growth and innovation, whilst burdening operators with high financial costs of compliance- In turn, illegal and irresponsible operators thought to yield an unfair competitive advantage over those compliant, whilst causing stricter regulatory environment through malpractice- Similarly, regulator and operator behaviour (i.e. compliant / non-compliant) most likely to impact businesses – positively or negatively dependant on nature of behaviour
Expansion into new markets and negative industry perceptions most important prompted developments - USA and Africa core new geographical markets exciting as potential expansion targets
Business development and innovation key senior roles identified to drive business growth- Second tier mentions included roles across new product development, marketing and sales
Artificial intelligence and blockchain are key technologies panel would invest in-Secondary themes included machine learning, online gaming and virtual reality
Executive Summary
This bellwether report was conducted between 15 February and 5 March 2018 with Clarion Gaming’s Ampersand Group to gauge the level of optimism/pessimism in the industry and to identify some overarching industry trends emerging in the sector. 150 responses were received and the report summarises the survey results. Ampersand is an 800-plus strong group of industryexperts and advisers who have joined to help drive Clarion’s event and content strategy and set up as a networking opportunity for the sector.
Online key anticipated growth area over the next 12 months
60
50
40
30
20
10
0
Decline si
gnificantly
Decline sl
ightly
Remain the sa
me
Increase
slightly
Increase
significa
ntly
0%3% 1%
25%
3%
39%
47%
30%
49%
3%
Percen
tage
Online (n: 147) Land-based (n: 144)
Increase96% Online33% Land-based
Q. Do you think that the following industry sectors will grow, remain the same, or decline over the next 12 months? (Base: respondents with an opinion of each)
Land-based Mean
3.1
Online Mean4.4
Survey Results
Approximately ¾ are ‘optimistic’ about their organisation’s prospects in next 12 months
Q. And more specifically, how optimistic or pessimistic do you feel about the prospects of your organisation in the coming 12 months? (Base: total respondents – 150)
Land-based Mean
3.1
Mean4.0
Survey Results
Biggest opportunities in the gaming industry broadly considered to be online gaming and sports betting in the USA
Q. What are the biggest opportunities in the gaming industry and why? (Base: total respondents – 150)
Mean4.0
For land based casinos
there is a lot of potential to
be found by going online
Millenials do not gamble in land
based venues consequently
there is room for change
Online Gaming
Growing sector/ untapped potential
Attracting younger audiences (e.g Millenials)
Sports Betting
Large potential market size (USA)
Upcoming favourable change in regulations (USA)
Probable decision allowing sports betting from the US Supreme Court
Huge population ready for an influx of quality betting opportunities
Survey Results
Tier two opportunities surrounded opening of new markets / jurisdictions and mobile gaming (cont.)
Q. What are the biggest opportunities in the gaming industry and why? (Base: total respondents – 150)
Mean4.0
Japan presents huge new
market for integrated
resorts
Latam / Africa / India - relatively untouched
New Markets/ Jurisdictions opening up
Japanese Gaming Market
Bric Countries/ African Continent Gaming Markets
Mobile Gaming
High growth sectorConvenience/ Ease of using/ 'On the go'
It's the medium of choice for so many due to its convenience
Internationally, growth is still greatest and uptake greater than all other channels
Other opportunities (5+ mentions): Product innovation through technology, e-sports, gamification, connecting land-based with online gaming, social gaming, skills-based gaming, blockchain, lotteries, crypto currencies
Survey Results
Core threats focused on strict regulation and illegal / irresponsible operators
Q. And what are the biggest threats to the gaming industry and why? (Base: total respondents – 150)
Mean4.0
Overly cumbersome regulatory burden kills growth prospects and hinders innovation
Ongoing changes raise costs of compliance at all levels
Strict Regulation/ Legislation
Kills industry growth and innovation
Financial costs in ensuring compliance
Illegal/ Irresponsible Operators
Leads to tighter regulations
Unfair competitive advantage
Unequal competitive conditions
Causes greater and more restrictive legislation
Survey Results
Lack of innovation and higher taxes secondary threats to gaming industry (cont.) Q. And what are the biggest threats to the gaming industry and why? (Base: total respondents – 150)
Mean4.0
Attracting new customers is getting hard
I saw no ""next big thing"" at ICE 2018. Nobody seems to be driving the next wave
Lack of innovation
Harder to attract new customers
Limited evolution of industry
Higher taxes
Reducing (already small) profit margins
Removes market competition (e.g. vs. illegal operators)
Removes competition in the market
Impact on already small margins
Other threats (5+ mentions): GDPR (General Data Protection Regulation), market competition, economic outlook, money laundering within industry, decline of land-based casino gaming, poor regulatory compliance of operators
Survey Results
Expansion into new markets and negative industry perceptions trends ‘most important’ for businesses
Expansion into new markets (n: 140)
Negative perceptions of the industry ...
GDPR (n: 117)
Industry consolidation (n: 139)
Innovation in consumer protection (n: 139)
AML (n: 122)
Advertising compliance (n: 141)
AI / Machine-learning (n: 130)
Video gaming / Gambling convergence ...
Skill-based gaming (n: 137)
eSports (n: 137)
Diversity of workforce (n: 139)
Growing restrictions in affiliate market...
US sports betting (n: 136)
Cryptocurrency / Blockchain (n: 132)
Virtual reality (n: 139)
ICOs (n: 109)
Brexit (n: 134)
Secondary lottery (n: 133)
4.3
4.0
3.8
3.7
3.6
3.6
3.6
3.5
3.4
3.2
3.1
3.1
3.1
3.0
2.8
2.8
2.7
2.6
2.4
Q. How important are the following industry trends and developments for your business?(Base: respondents with an opinion of each)
Land-based Mean
3.1
Online Mean4.4
Important
Fairly important
Not very important
Graph depicting mean score out of 5 where 5 is very important
Survey Results
SECOND TIER NEW MARKETS
USA and Africa ‘exciting’ geographic markets as expansion targets
USA
AFRICA
JAPAN BRAZIL EUROPE
ASIA LATAM INDIA
CORE NEW MARKETS
Q. What new market (geographically) excites you as a potential new expansion target?(Base: total respondents – 150)
Survey ResultsSurvey ResultsSurvey Results
Key roles of interest focused on business development and innovation Q. If you could create a new senior role within your organisation to drive the growth of your business, what would that role be? (Base: total respondents – 150)
Head of/ Customer Experience and Relations Manager
Head of/ Sales Manager/ Director
Marketing Expert
Data Analyst/ Officer
Corporate Strategy/ Affairs/ Counsel/ Development
Head of Growth
Head of/ Business Development Director
Head of/ Director/ VP of New Products/ Markets Developments
Innovation Officer/ Manager/ Director
Survey Results
Regulators and operators core organisations considered to positively impact businesses
Q. Are there any specific organisations or types of company that have had a positive impact on your business – or might do in future? (Base: total respondents – 150)
Have positively impacted Might positively impact in future
Regulators Regulators/ Liscensed operators
Online Operators/ Platforms
Data Suppliers/ Analysts
Cloud/ IT Platform Providers
Sports Betting Industry Players
Regulators
Governments
US Government/ Supreme Court
Innovative Technology Companies
Gaming Development Companies
Operators (e.g. Gambling, Slots)
Survey Results
Regulators, central governments and operators key organisations negatively impacting businesses
Q. Are there any specific organisations or types of company that have had a negative impact on your business – or might do in future? (Base: total respondents – 150)
Have negatively impacted Might negatively impact in future
Regulators Illegal/ Irresponsible Operators
Governements Online Operators
Media Outlets'Technologically' behind platform providers
Central/ Federal Governments
Online Operators
Immoral Operators
Illegal Operators
(Left-Wing) Political Organisation
Local Governments (e.g Tax)
Survey Results
Bet365 and Playtech core gambling sector companies aspired to, whilst Google, Apple and Amazon core others
Q. What company within and outside of the gambling sector do you aspire to? (Base: total respondents – 150)
Core Companies
Other Companies
Gambling Sector Non-Gambling Sector
Survey Results
Artificial intelligence and blockchain key technologies for investmentQ. If you had $500,000 to invest in a new technology, what would that technology be?(Base: total respondents – 150)
Artificial Intelligence Blockchain
Machine Learning
Mobile Apps
Online Gaming
(e.g. Casino)
Skills-Based Games
Virtual Reality
Sports Betting Product/ Platform
Automation
Survey Results
Casino
Sports Betting
Lottery
Coin Op / Amusement
Bingo
Street
Fantasy Sports
Social Games
eSports
Financial Trading
Poker
Skill Games
Tribal
Other
0 5 10 15 20 25 30 35 40 45 50
41%
25%
7%
4%
3%
3%
2%
2%
1%
1%
1%
1%
1%
8%
Q. Type of gaming predominantly involved with. (Base: total respondents – 150) NB. Displaying joint top 5
Approximately 2/3s predominantly involved with either casino or sports betting gaming
Respondent ProfileRespondent Profile
59% work for an operator or supplier / vendor, whilst 8 in 10 have an online presence
Online 35%
Land-based 18%
Both 47%
Operator
Supplier / Vendor
Consultancy
Law Firm
Media /...
Regulator
Affiliate
Financial...
Other
35%
24%
16%
5%
5%
5%
3%
3%
4%
Q. Organisation type. (Base: total respondents – 150) NB. Displaying options selected by >1%
Q. Delivery channels. (Base: total respondents – 150)
Respondent Profile
Approximately 9 in 10 work in a senior position – over one third are C-level
C-level/ Partner/ MD
Head/ Manager
President/ VP/ Director
Non-managerial
Other
36%
28%
25%
4%
7%
Q. Job title. (Base: respondents where available – 138)
Respondent ProfileRespondent Profile
Europe core region involved with for work
Europe
North America
Asia
Australia
Africa
Central & South America
83%
22%
14%
11%
11%
9%
Q. Region. (Base: respondents where available – 138) NB. Displaying options selected by >1%
