Mind the gap: how gap analysis can help identify new market opportunities

Where next?

This is the question facing any fast-growing gaming company. Which market is best suited to repeating the success you have initially found? Sometimes the intuitive answer is not always the right one. The temptation to chase promised riches in exciting new jurisdictions – such as newly regulating US states – can outweigh more sensible, but perhaps less glamorous, alternatives. The international gaming landscape is a very different place to what it was even just 10 years ago. No longer is it as simple as securing a Malta licence and chasing the money. Instead, online gaming jurisdictions are erecting high barriers for entry, and nowhere is this more prominent than in technical compliance requirements. Meeting these requirements in highly regulated markets can be a significant challenge, so finding a way to reduce the burden and parlay previously done work when identifying a new target jurisdiction has never been more important.

Lightening the load

Gap analysis is nothing new and performing comparative studies of your business’ capabilities and requirements is a vital part of the growth process. But it is fair to say that the gaming industry has lagged behind other sectors, such as finance and banking, when it comes to utilising gap analysis to drive seamless entries into new markets.

Gaming firms, particularly on the supplier side, are leaving tremendous value on the table if they are starting from scratch every time they target a new jurisdiction. Take the example of one of Europe’s most established regulated markets, Denmark, and another which looks set to join it shortly by implementing its own regulatory framework, the Netherlands.

Slots suppliers that have committed significant resources to ensuring their products meet the technical compliance requirements of Denmark – a high bar by anyone’s standards – will need to be watching the Netherlands closely. While the requirements will be different, much of the heavy lifting is likely to have already been achieved by those certified to provide games in Denmark, with what appears to be an initial ‘Denmark +’ approach to the Dutch market. Conducting a thorough gap analysis between the markets is the ideal way to enter the Netherlands when the time comes.

This provides a great advantage for those suppliers live in Denmark who are eyeing up the Netherlands. With intelligent use of gap analysis, you are not only gaining additional value from the work already done in Denmark, but you are also getting a head start against competitors. Similarly, gap analysis can help identify markets in unlikely places. Colombia’s egaming licensing framework took inspiration from Spain, and other markets, including Buenos Aires and Brazil, look likely to follow. While a Latin American market-entry may sound daunting to a European-based supplier, gap analysis may show that there is, in fact, less to be done than one may intuitively think, especially if you are already active in Spain.

Of course, while gap analysis is a fantastic tool for identifying required processes, your compliance team – and indeed your entire company – needs to be able to act with agility if you are to capitalise on these opportunities. This means rethinking the way your company approaches compliance. It means being proactive rather than reactive in meeting requirements. And it means utilising the right tools to get the job done. But as part of a wider strategy, gap analysis should be a central part of your business expansion plans. With regulatory burdens only set to increase – from Europe, to the US, to Latin America – it is the only way to ensure the swift and optimal market entries required to scale your company.

Antonio Zanghi, MD, Maxima Compliance

Antonio Zanghi is an online gambling compliance expert with years of experience in the field. He has previously worked at IGT where he was involved with both regulatory and technical compliance, successfully managing compliance in the Canadian and European regions. He now runs Maxima Compliance, a full-service compliance consulting firm supporting online gambling businesses.