Time to Play: what Google's further easing of its gambling app store ban means for operators

Google have thrown a hand grenade,” mkodo MD Stuart Godfree tells EGR Intel. He is, of course, referring to the technology giant’s decision to lift its gambling app ban in 15 additional countries, including the US and huge swathes of Europe, come 1 March. After an initial repeal on its ban for markets including the UK and France which came into effect in 2017, there has only been radio static interjected by whispered rumours as to when the next set of jurisdictions would be given the green light. Now, the starting gun has been fired for operators and app developers to get Play Store-perfect products ready for Android customers who have been waiting for easy-to-find apps to rival their iOS cousins.

Self-serving strategy

Multi-billion-dollar companies rarely act out of altruism and Google’s decision to open more of its Play Store territories to real-money gambling (RMG) apps is no different. Sadly, the Alphabet-owned firm has not looked at the average Joe and imbued them with a Play Store option out of the kindness of its heart. Instead, the decision opens a wealth of opportunities in terms of advertising revenue. Google posted $37.1bn in Google Ads income in Q3 2020 alone and the addition of RMG apps in 15 new countries will surely set the dollar signs spinning in eyes. Richard Wagstaff, Degree 53 managing director, says that it is in Google’s best financial interest to cast a wide net. Wagstaff says: “Google will gain advertising revenue as operators will want to promote their products and stand out from the competition. Therefore, it’s in its own interest to allow developers from as many regulated countries as possible to start distributing their products on the Google Play Store.” On the surface it seems a simple equation for Google. Opening more regulated markets for RMG apps equals more ad revenue flooding in. But after waiting four years since 2017 to unveil the latest batch of repeals, what was the catalysing factor behind the decision? Matthew Balch, app store optimisation specialist and company director at Sound Bet Media, says despite Apple being far more accepting of RMG apps in the past, issues with native-built requirements have left developers frustrated, creating a vacuum for Google to fill. Balch says: “Where developers historically had to rely on mobile web to reach Android users, we may start to see brands and developers re-route their app development resource from iOS to Android to take advantage of Play Store distribution to a larger audience size. “It’s also worth remembering how scarred many brands have been left by Apple’s native shenanigans in recent years, so this step from Google could be the biggest green light yet to all but abandon iOS apps,” he adds. Godfree suggests that like many other industries, Covid-19 has come into play with the repeal and praises the move. “There’s a classic answer to that: I think it’s the pandemic. More and more people are purchasing products online and it has just forced their hand. I think it’s a demonstration that Google really want to support this industry, which is great. It’s great news for all of us,” he says.

Space race

Everyone will tell you, from students to journalists to politicians, a looming deadline is a daunting spectre. But in this rarest of occasions, the actors in this scenario appear prepared and ready to launch when 1 March comes around. Not needing to adhere to native functionality as with their iOS apps and experience of building Android apps for existing markets should see developers be prepared well ahead of D-Day, with the major requisite being that developers are licensed in respective countries. Wagstaff says: “If existing Android apps have been developed according to Google’s requirements from the start, developers shouldn’t have a problem adding them to the Play Store.” Meanwhile, Balch comments: “Most brands will be all but ready and with less pressure to build native functionality, it’s going to be much quicker and easier for operators to adapt their already highly advanced mobile web products into Android apps.” Alternatively, Godfree notes that the potential impact of transactional sideloaded apps (apps that aren’t available on app stores) and non-transactional app store products, arguing that it could set back roadmaps by as much as six months. “[Operators] have a dichotomy because they potentially have two products sitting side-by-side. They would have their non-transactional one and their transactional one. Now that creates a level of confusion for their audience. So, the problem they’re going to have is blending those two products together. “That’s what most of our customers are now doing. We’ve got our non-transactional app. How do we move that into becoming a transactional product and effectively overwrite our existing product? And that’s the challenge and, if nobody’s kind of there, that’s a six-month bit of work.”

Operator view

While Google expects its ad revenue coffers to bulge as app developers set their sights on the finish line of 1 March, what do the changes hold for operators and the regions themselves? Kindred Group’s new channels owner Michael Franklin tells EGR Intel that the decision will result in an almost instant revolution in customer behaviour. Franklin says: “Ever since the beta markets opened a few years ago, we’ve been looking forward to this expansion and so it’s great to see it happen, especially in so many of our key European markets. We expect similar behaviours to iOS and an overnight shift in channel mix of how customers play our products – both for newly acquired customers and existing customers who would have preferred to use apps, but up to now have relied on mobile web or desktop.” Godfree reveals that one of mkodo’s customers, which includes Tipico and Danske Spil, records more than 40% of its total revenue via apps, with that share continuing to increase, confirming Franklin’s own evidence on the growing hunger for app-based experiences for customers. The switch to app-based play will not only benefit existing users but will in fact entice new customers in markets that have previously been devoid of a Play Store official option, something that Wagstaff says will have operators licking their lips in anticipation. Wagstaff notes: “Regulated operators will be thrilled, as this opens up a major distribution channel for their product, gives them a new marketing channel and encourages healthy competition. Operators that have a good product and a strong marketing plan will have the opportunity to increase their customer base and revenue.” For the US, Google’s decision could act as a shot of adrenaline to the arm of an already hyper-excited market. Godfree says existing compliance measures will be a boon to the Android market, with many American operators already owning a quasi-Android version of their mobile app, which is essentially a small amount of code around a website that acts as a geolocator to abide with individual state legislation. “Quite a few North American players have an Android version. One of the main reasons for that is geo-compliance in North America is much more stringent than what we have in Europe. If you’re in New York, and you’re providing a service, and that person goes out into New Hampshire, the CEO of that company will very soon be wearing orange. “The only way you can really get that level of geo-compliance is in an app so a lot of the North American sportsbooks, although they are what we call web views, really, they are small amounts of code basically around a website and what that amount of code is doing is geolocation. So, the North American market is actually in a good place and I see those guys very rapidly putting stuff into the Play Store because they’re ready for it.”

We expect similar behaviours to iOS and an overnight shift in channel mix of how customers play our products – both for newly acquired customers and existing customers – Michael Franklin, Kindred Group

With the US market share being dominated by DraftKings, FanDuel and BetMGM, Balch believes the repeal could boost the chances for the less prominent operators looking to make a dent in the market. He says: “It goes without saying, but the biggest opportunity will be in the US. For operators who have invested heavily to date in the US market with either poor or middling results, this will undoubtedly be a shot in the arm.” Elsewhere, Balch highlights poker as a potential one to watch following the repeal. Online poker play skyrocketed in 2020 thanks to Covid-19 and Balch suggests that European and Latam countries with high Android usage will be markets worth keeping an eye on. According to data published by IDC in December, Android accounted for 84.8% of global smartphone shipments in 2020, with that share set to increase to 85.7% by 2024. The likes of Germany (64% Android market share), Italy (73%) and Spain (80%) are three countries Balch earmarks. He says: “I think it will be interesting to see what this does for poker in mainland Europe, particularly in countries like Germany, Italy and Spain, where you have large majority Android market share against big populations. “Colombia is another obvious market to watch, where Android has a 72% market share against a population of 50 million,” he continues.

Next please

The 15 additional countries to be greenlighted by Google came as a slow snowball, rather than a rumbling avalanche after the first set of Play Store restrictions were lifted in 2017, which poses the question of whether the tech giant will follow a similar strategy moving forwards, or if this move will open the proverbial floodgates. Balch looks to pour cold water on giddy expectations of mass repeals. “Probably not for a while, mainly because they will be conscious of measuring the impact of this round of changes and also because they will be led by local regulation,” he forewarns. However, Wagstaff and Godfree remain more positive in their crystal ball gazing, with the pair anticipating rollbacks across Africa and Asia as the next frontier for Google. “They could potentially add African countries where Android usage is huge versus iOS and other areas of Europe where gambling markets are growing and becoming more regulated with a focus on online products,” Wagstaff says. The Degree 53 MD notes that there are a number of countries with regulated gambling industries that will “currently be frustrated” at not being included in the latest list of permitted jurisdictions, so the pressure will be on Google to extend the rollout further. Godfree reminds EGR Intel that changes are not as simple as flicking a switch, and Google needs to establish significant infrastructure before giving the go-ahead. He notes: “If they add further regions, they’re going to have to add further infrastructure to support it. And it’s not just changing their terms and conditions, it’s actually building out more of a team. This is quite an investment by Google to undertake this. “I see some of the outliers in Europe, probably Switzerland is a good example, and I think we’re seeing more of the ASEANs [Association of Southeast Asian Nations] coming on,” he adds. From the operator perspective, Parimatch chief marketing officer Ivan Liashenko is hoping for a CIS explosion in the next batch, citing improving regulations and a growing customer base in the bloc. “We believe that the main countries in the post-Soviet markets can claim a place on the list in the near future. Markets in the CIS are steadily evolving, constantly engaging new audiences along with changing rules and introducing new legislative initiatives, and we expect the inclusion of key countries in the list with the next updates,” he says. Whatever Google’s roadmap looks like, stashed under lock and key in a Californian safe, operators, developers and customers across the globe continue to wait on tenterhooks for their turn to join the Play Store party.