Gambling industry CEOs want their businesses to be seen as entertainment providers, as they attempt to shift away from the regulatory scrutiny driven by VIP-based business models.
To achieve these aims, the industry must make better use of its existing player data such as bet balances and the volatility of games to create a safer and more personalised experience, Alea founder and CEO Alexandre Tomic said during a panel at this week’s SBC Barcelona Summit.
Tomic said VIP schemes are “so 2018” and incentivise operators to ignore potential regulatory requirements, leading to costly regulatory enforcement action taken against them.
Instead, Tomic said operators now want a lot of smaller players.
“One is addiction, the other is entertainment. We need to shift the business model. Like a drug dealer selling cannabis now selling CBD oil,” Tomic said.
The Alea boss said this requires the “esportification” of gambling, where he envisages land-based venues taking a rake from multi-player skill games similar to poker table games.
To attract video gamers to gambling venues, Tomic said they should create content such as live Twitch streams and host online players that have loyal fan bases, while navigating new potential regulatory hurdles such as age-gating people on social media.
Other appearances at the Barcelona conference this week suggest a pervasive desire among top gambling CEOs to transform their businesses to focus primarily on entertainment.
SKS365 CEO Alexander Martin touted his company’s innovations in social media and how it catered to a broader audience base, including social casino players, as driving a shift to the mass-market.
Martin, like the other members of the panel, believes the gambling industry should look to other businesses relying on lots of low-paying customers, like Netflix, for ways to grow their customer base with casual, as opposed to at-risk, players.
Entain CEO Jette Nygaard-Andersen was one of the top bosses that agreed with him, warning that other industries are already being gamified and gambling must do the same.
“We are trying to piggyback on and invest in new forms of technologies,” Nygaard-Andersen said, as the company looks to associate itself with other exciting brands such as Apple, Netflix, and Peloton.
Looking to the future, Roman Syrotian, co-CEO at Parimatch Tech, pointed out that online gambling is already missing out on a potential new customer base by ignoring the success of mobile esports games such as PUBG MOBILE.
Syrotian, like Nygaard-Andersen, also believes virtual and augmented reality will help the gambling industry pivot more towards entertainment and should be invested in once the technologies become more established.