Poll: How can operators manage complexity in an evolving industry?
What is the best way to run an increasingly complex business?
In the past few years the online gambling industry has become an increasingly complex market, with a range of new products and distribution channels emerging.
Companies are being forced to expand their online offerings to cover channels such as mobile and social, while cloud computing and other new forms of technology emerge, requiring time and investment to develop an effective solution.
Unlike Bet365, which has built its own cloud-based system to run its in-play offering with the lowest possible latency, many operators do not have the funds to invest heavily in cloud computing.
While Gamesys may have struck out alone to create a social offering, other companies are yet to launch their own products, or are content to acquire smaller companies or invest in the sector rather than develop their own games.
Operators are also put in a difficult situation when looking to launch in new markets. Various models of taxation, combined with stiff competition from former monopolies, forces companies to invest heavily in advertising to grab market share, meaning the costs potentially outweigh the benefits. In a bid to increase its market share without an increased marketing spend Unibet, despite already being a significant player in Denmark, has acquired Bet24. Betsson, on the other hand, has created an entirely new subsidiary in order to grow its business in non-core markets.
Mergers have been seen as another way of consolidating operations and cutting costs, but the bwin.party partnership remains the only high-profile example, despite Ladbrokes’ talks with Sportingbet and 888, which ultimately came to nothing. As a result of bwin.party’s merger, co-CEOs Jim Ryan and Norbert Teufelberger split their strategic focus, allowing one to prepare themselves for the US opening, and the other to work on a social offering, as announced in the company’s full-year results presentation.
With a variety of different solutions to managing an increasingly complex business emerging, what do you think? Vote on this week’s poll on the left-hand side of the page.