Analysis: What happened to innovation?

Two stories from the sports betting sector caught the eye recently as an indicator of where things are headed in terms of product innovation. The first was Smarket’s SBK app and its new Auto Acca feature and the second was Kindred’s deal with free-to-play provider Sportcaller. Both speak to an industry trying to innovate and push into new areas, with the recreational customer at the front of mind, but both also speak of an industry that has been more focused on platform than product in recent years.

Since around 2015 this has been an industry geared up to solve the platform problem. Operators have worked to pull more functions in-house, take greater control of their own destiny and in many cases tackle the complex and demanding integration tasks that come with big mergers. We’ve also seen a big focus on the mid-layer technology with huge gains made on customer profiling, CRM and personalisation, as well as creating a faster, better user experience. These are all hugely important issues and have undoubtedly enabled some of the current leaders to rise to the top and are why some others are struggling to keep pace.

But in some cases this has come at the expense of customer-facing innovations. The mobile arms-race of the start of the decade, where operators were falling over themselves to launch new features and new apps, seems like a long time ago now. Incremental changes are the order of the day and innovation is more around marketing than product. That’s not to say this is a bad or regressive thing for the industry, and its arguable whether the mobile arms-race helped or hindered operators. However, it does place the sector at a curious inflection point.

The brand leading the way

What we are now starting to see is marketing leading not just trading, but also product. Kindred’s deal with Sportcaller for a range of free-to-play apps is part of the segue between the two where offering users something new, immediate and free can act as both a great acquisition and retention tool. It’s a softening of the sports betting experience in an attempt to appeal to less engaged consumers and it will be interesting to see how far they push the concept in their varied European markets. But it’s not yet anything new. And its role seems to be much more as a feeder into existing products.

Smarkets recently unveiled its Auto Acca feature for its SBK sportsbook

But SBK’s Auto Acca is perhaps the most interesting here. It allows customers to quickly set up a multiple bet after defining a few simple criteria. It got a positive industry reaction and it’s a nice execution of concept that fits squarely into the modern recreational market, but it’s also remarkably similar to William Hill’s shake-a-bet from 2011. SBK’s auto-acca feature is just one aspect of a new app still in beta, and we’d expect a lot more to come from them before its full launch, so the critique is not on them. They are trying new things and experimenting. But that it stands out is telling.

The common thesis now is that online gambling is simply a function of gambling activity moving from the land-based environment, with the newer generation skipping land-based entirely and accelerating this trend. The same could be said for Amazon in terms of destroying the high street, but, in both cases, it skips the rather important aspect of the user experience. Part of the online gambling growth story has been creating accessibility and availability, but another part has been the creation of a new type of gambling experience. Compare and contrast football gambling pre and post-internet, or even post-mobile for some evidence of this.

The scale weighs heavily

But in the modern gambling world where scale, regulation and a quick raid on some grey markets to pay for it all is all that matters, there seems to have been a dip in enthusiasm for pushing the boundaries. There is plenty of incremental innovation around the UI and bet presentation and even more in terms of marketing but there is an increasing sense of conformity around the core product at a time where everyone claims to be trying to revolutionise betting for the modern recreational customer.

It’s unlikely we’re going to see any radical reinvention of the sports betting experience from the current market leaders, and it’s arguable whether that is even needed or wanted. But the egaming sector has always thrived on creativity and much of the present top tier found themselves there by taking a different approach, whether that be a total reinvention like Betfair or a more subtle shift like Sky Bet. Either way as growth slows, it’s imperative the industry begins to start pushing at the boundaries once again to create the next step forward.