eGR 10th anniversary column: The last 10 years

I have seen my fair share of highs and lows in online gaming in the last 10 years, and it remains a very dynamic and exciting industry.

Due to its relatively nascent nature, the majority of the low points I and colleagues at Sportingbet have had to deal with have been as a result of us reacting to the unforeseen activities of governments and regulators. As we have all seen in Spain in recent months, the backdrop against which we operate has been, and is likely to remain, predictably unpredictable.

That said, Sportingbet has had some exceptional moments in the last decade, when the firm has galvanised and excited the industry, customers and City stakeholders.

A good example of this was in 2004, when we acquired ParadisePoker.com in the US. This was a landmark deal in terms of raising bank debt equity, and demonstrated the immense power of cross-selling and the desire for customers to be able to move seamlessly between sports betting, casino, poker and games all on one site with a shared purse. Operating the world’s largest sports betting website, US facing Sportsbook.com, we immediately saw the benefit of offering players choice.

Soon after this, we saw a flurry of new gaming companies floating on the stock market, including 888 and PartyGaming, as they too tried to capture some of the investor excitement in online.

Sports betting has and will remain the core focus for Sportingbet. In 2000, we typically offered five pre-match markets on 50 football matches on a Saturday afternoon. This all changed in 2006 following the introduction of in-play, which radically changed the way we were able to offer sports betting to customers, and has meant we are able to provide an industry leading breadth of product offering with events on which to bet on every minute of every hour of every day. We currently offer more than 300 in-play markets during the biggest football matches, such as Euro 2012.

Another technological breakthrough that was a game changer for the business was our ability in 2009 to offer live streaming next to our in-play service. Sports wagers now account for more than 70% of group revenue. Of that, football accounts for more than 35%, followed by horse racing in Australia, tennis and then basketball. And now we have mobile. Over the years, the industry has advanced beyond all recognition for the customer from where it started.

Another high for the business was the acquisition last year of Centrebet in Australia. As an integral part of our strategy to maximise earnings from regulated markets, we saw the opportunity to buy a market-leading sports betting operator that would fit well into our existing platform in Australia. We also saw this as a key opportunity to expand further out of recessionary Europe.

The theme of technology and its importance to the industry cannot be overstated. We have finally seen mobile come to fruition in the last 18 months, with the advances in handsets and network capacity. Sports fans now have the ability to access content and bet wherever and whenever they want, and we expect much more from the channel. I do, however, see a time when the rate of technological innovation will begin to slow down and the ability to differentiate by marketing will be the way to succeed.

Outlook for the next 10 years

I predict that the next decade will be as exciting as the last, as new markets open up and, as a result, sports fans can expect an even richer betting and interactive experience. Due to the burden of European taxes and the industry maturing, mergers will become increasingly likely as companies chase scale.

I am confident about the long-term growth prospects due to global demographics, increased broadband penetration, ever increasing confidence in transacting over the internet and mobile, and sport’s rising global popularity. These factors, combined with the emergence of mobile and the move to regulation, bode well for the industry and sports fans alike.

This article is the third in a four-part series. For part 1 – from Coral Interactive MD John O’Reilly, click here, and for part 2 – from Sports Gaming CEO Joe Saumarez Smith, click here.