A closer look: Paddy Power

Paddy Power is going from strength to strength in the UK and abroad, but competition from its rivals is hotting up

Paddy Power has become the byword for mobile gambling success, not least because they rarely stop reminding everyone about it. But the Irish operator has plenty to boast about with it already exceeding targets most operators have set for 2015. In its last interim results Paddy Power revealed mobile accounted for 54% of total online revenue in May. By a point of comparison bwin.party is aiming fro 50% of revenues to come through mobile by the end of December 2015. But with competition increasing all the time can the mischief making online giant keep up the pace as the mobile front runner?

Paddy Power’s revenue mix, with 73.% of online revenue coming through its sportsbook, perhaps flatters to deceive in terms of the true picture of its mobile achievements. Paddy’s UK sportsbook is its main source of players and that is an increasingly mobile driven environment with rivals such as Betfair reporting 64% of sportsbook revenue through mobile in recent months. For the record, Paddys reported 56% of sportsbook stakes through mobile in December.

It’s not just the UK where Paddy Power is having success, with both Italy proving strong for it on the mobile channels. Mobile is now responsible for half of its Italian turnover, way ahead of most of its rivals, and it is already live with mobile casino apps with more products due to launch in 2014 in Italy.

Australia is even more of a success story with over two thirds of players using mobile to place a bet with close to 50% of turnover coming from mobile. It has also launched tablet-optimised apps in Australia and has more releases in the pipeline for what is a crucial market for the operator.

The firm’s early focus on mobile has placed it in a strong position, but it now faces increasing competition from both existing rivals and new entrants. Mobile consumers are notoriously fickle with a propensity to breeze from one flavour of the month app to another and with no shortage of new apps to choose from Paddys faces a new challenge. Betfair’s product innovation with Cash Out+ and Price Boost the latest to hit its mobile platforms are one aspect, while major branding, download and price driven campaigns from the likes of William Hill, Sky Bet, Betfred and BetVictor present a different set of problems.

Paddys CEO Patrick Kennedy said the firm would be investing in mobile to remain ahead of the pack in its annual results back in March. “We continue to build out our industry leading penetration in mobile sports betting and eGaming,” he said..  Investment in mobile will continue to be significant in order to take advantage of our market leading position and avail of its exceptional growth potential.”

Big money plays

What this investment translates to in practice is a number of new apps and a host of new games from its Bulgarian subsidiary Cayetano. During 2013 the Bulgarian technology office developed 70 of the 200 games released by Paddy Power across all platforms, with the firm reporting revenue per player values higher on its in-house games than those from third parties. It helped drive mobile gaming net revenue up 143% during 2013 with 42% of active egaming customers using the mobile platform in December.

Mobile gaming has been a strength for Paddy Power, despite it being a weakness for much of its competition. The award-winning Roller app may have racked up the most headlines, but its more simple Games and Vegas apps have been pulling in the revenues. Mobile product releases in2013 included in-house developed native tablet apps for Games and Casino, the PP Vegas tablet app, a ‘Live’ Casino app, a revamped Games app and 40 exclusive proprietary mobile games.

Where Paddy Power has been clever is to place an early focus on tablets for gaming. Casino games work far better on the larger screen size and they are rapidly becoming the home device of choice above both smartphones and laptops. Tablets are a key area of focus not just in gaming, but also for the sportsbook app.

“Tablet devices will be central to future growth in mobile with their penetration amongst consumers having more than doubled in the UK last year.  We also added a record 200 new games last year, of which over 60% are mobile games and 35% are exclusive Paddy Power proprietary games.  This mobile leadership is enabling Paddy Power to effectively serve valuable multi-product mobile customers, who enjoy both sports and gaming,” the firm noted in its annual report.

Paddys released what it deemed the first sportsbook app designed specifically for tablets in December 2013, and more tablet enchangements are expected during the rest of the year. The app was developed in-house and its this flexibility that will help the operator in the next twelve months as yet more me-too betting apps hit the market.

Live streaming is a big feature of the app with racing streaming pushed heavily in its latest UK TV ads, but the deeper football integration is also a key proposition for future growth. Users can set up their own favourite team, which allows Paddys to send more targeted push notifications and offers. The key for Paddy is to be able to still stand out in such a crowded sector not just through brand but also through product.

Paddy Power’s approach to mobile product has been in stark contrast to some of the more mobile-first sportsbook rivals. While BetVictor and Betfred have a mostly single app strategy, Paddy Power had nine iOS apps in the app store at the time of writing including a Brazil-themed World Cup app and a legacy Deal or no Deal slots game app. The trouble with such a broad portfolio of course is maintaining it.

While eGR Mobile Intelligence understands Paddy Power is looking at wearables and some bold new launches the bulk of the work for its mobile teams is firefighting and smaller incremental updates. Bug fixing over nine apps is work enough for a large development team. The product road map is undoubtedly there, but it takes a lot of resource to cater to that and to maintaining quality for its existing product set.

If Paddy Power have a weakness then potentially it is on its mobile sportsbook. It’s not the most downloaded, that would be Hills, it’s not got the most payment options, that would probably be bet365, it’s not the most modern looking, or the one with seamless login or the one with the slickest navigation. In a very competitive marketplace it doesn’t do a great deal to stand out.

But with the strength of the brand, maybe this isn’t a problem. The app is still very good at what it needs to do. It’s easy to use, easy to get money in and out of and includes live streaming, cash out and very strong push notifications and in-app messaging. The smart customisable team functions are also a neat add-on and it would be foolish to assume it won’t get some significant updates in time for the new football season.

It would be wrong to doubt Paddy Power’s ambitions on the platform. “Over the next five years, we expect online betting markets to typically achieve double-digit percentage annual growth and for mobile betting to account for some 90% of total industry growth. Meanwhile, multi-channel customers will continue to grow in importance,” the firm said in its annual report.

It added it will continue to invest “substantially” in its in-house development specifically for mobile and tablet front-end interfaces.  “This ensures our products are differentiated, increases development efficiency and accelerates the pace at which we release product to our customers,” the firm said.

But that pace has picked up a gear since the early days of Paddys iOS adventures. It’s rivals have products with as much if not more functionality, more comprehensive payments and differentiated product and design. A lack of single sign-on and a product that fails to stand out may see it losing a battle or two, but the Irish operator’s smart focus on tablets could still see it winning the war. One thing is for certain, it’s unlikely to give up its hard-earned early lead without a fight.