Window of opportunity

William Hill found a familiar foe causing it some serious problems last week. A large distributed denial of service (DDoS) attack took the site down for the best part of two days at a time when the operator had just about regained most of the goodwill lost during its troubled platform update in late 2015.

Hills described it as a “very sophisticated, multi-layered attack” that took the operator offline for a Champions League Tuesday night with service still patchy on the following Wednesday. The previous week Amazon, Twitter and Netflix were down for several hours following a DDoS attack, and operators we spoke to confirmed smaller scale attacks are commonplace in the egaming sector.

You would expect questions are being raised internally about how to prevent this happening in future, not just at Hills but at all the major operators. But for those on the outside it was a timely reminder of just how complex and multi-faceted an operation running an online gambling business is.

While analysts and journalists may obsess over shiny new features and innovative products, the core business requires stability and security and that is no small task when running a platform servicing thousands of simultaneous customers.

Making fundamental or sizeable changes to this platform then clearly comes with some substantial operational risks in terms of disruption to business as usual. The history of egaming is littered with the corpses of failed major technology projects, not least at some of the major sportsbook operators.

So it should raise an eyebrow that so many of them are engaged in exactly this process right now.

When two becomes one

GVC Holdings is in the midst of a major integration project following the acquisition of bwin.party, while Paddy Power Betfair is well underway with its plan to move the Paddy Power business onto the Betfair technology stack. Ladbrokes Coral look the least problematic with both sitting on a combination of Platyech and OpenBet technology, but it would be optimistic to assume integration here will be simple.

These are all hugely disruptive projects that will take considerable resource to complete, although the benefits, both in terms of cost savings and future development ,will be considerable once they are complete. In the meantime, however, they do present an opportunity for rivals in the sector and for some of the newer firms emerging into the sportsbook space.

On its Q3 results call PPB CEO Breon Corcoran noted the re-platfoming of Paddy Power was “consuming a lot of resource” with the integration set to be completed in H2 2017. “That is something that we will be anxious about until it’s done,” he said.

Interestingly this answer was in response to a question over whether PPB was spending enough on new product development with the implication being this project would take priority over any major updates for the time being.

But with the likes of Sky Bet and Bet Victor constantly rolling out innovative product updates it can’t afford to stand still for long. And neither can the likes of Ladbrokes Coral or GVC. William Hill theoretically seems well placed to capitalise here, but it still faces its own internal issues and the City seems to feel it needs to pursue some form of M&A as a first priority. Perhaps it will be bet365 that benefits most?

As Hills’ recent troubles proved, new product innovation and front-end slickness count for naught if customers can’t access your site. And while DDoS attacks are thankfully still rare, downtime isn’t and nobody should underestimate the scale of some of these integration and migration tasks; nor the scale of some of the platform updates underway at some other large operators.

What we may have is a small 12 month window where rival operators can look to steal a march on the mega-merger giants. Once PPB is operating on a single platform and can pour its considerable resource into product innovation then it will be a brave man who thinks they not have the firepower to blow the smaller players out of the water.

But for now there seems to be an opportunity for some of the many new entrants such as Sun Bets, Leo Vegas and Mr Green to make their mark. The question is whether they will take it.