Opinion: Ushering in the egaming brand mash-up
Christina Thakor-Rankin, principle consultant at 1710 Gaming, explores the potential for UK egaming collaborations
The UK Gambling Commission’s decision to ban egaming operators from advertising in the country unless they have a licence there could be about to take the strategic partnership into uncharted waters.
We’ve already seen signs of the new brand mash-up, whereby ‘powered by’ is the new way of entering and capitalising on newly regulated markets, such as Gamesys forging an alliance with Trump in New Jersey.
Aside from reduced operational and regulatory challenges, this route oÂffers businesses all the advantages of being an early market mover but without the exponential costs of creating brand awareness within an established market.
In Europe, the often prohibitive costs of market entry have seen UK brands align themselves to established local brands in a bid to continue to capitalise on their previously grey-market activities within a now regulated environment, but without the extra burden of regulatory expense and commitment in a new unproven market.
The net result has been an increase in brand licensing and ‘powered by’ sites. This time the message is closer to ‘we’re still doing it but now without the legal ambiguity’.
But I believe the UK GC’s latest announcement is about to see the ‘powered by’ brand mash-up reach new heights. The fact that certain operator associations are even attempting to challenge the changes to the Gambling Act shows exactly just how lucrative the UK market is in its own right.
We can only assume that the high cost of the challenge is nothing compared to the cost of having to apply and operate under a UK licence, and finding a cost-eÂffective way of continuing to operate here must surely be a priority.
Taking shortcuts
But what of all of those non-UK operators currently reaping the rewards via the soon-to-be-abolished White List and already committed to regulatory costs elsewhere?
The short-cut is to take something that customers are already familiar with. In those territories where gambling is not openly permitted, for those who do indulge and actively seek out gambling sites, names like William Hill, bet365 and 888 will already be familiar.
Cue the ‘powered by’ model. The UK has a long history of brand licensing deals, under the umbrella of ‘powered by’, ‘in association with’ or ‘betting partner’, but I think many more operators will jump onto this bandwagon.
Just as established UK brands have forged brand-driven alliances with regulated local entities in Europe, what is to prevent non-UK operators building brand-based alliances with UK-licensed businesses?
If the cost of operating in the UK in an operator’s own right is too high then, comparatively speaking, a ‘powered by’ or ‘in association with’ deal with an operator that is desensitised to the 15% cost might be a very lucrative way of continuing to build on past eÂfforts and still come out with a profit.
Better yet, it may provide an opportunity for those who have remained in the UK while others have enjoyed oÂnshore advantages, to now redress that imbalance by turning their brand power to their advantage.