Industry predictions for 2021: cowboy era over as crypto payments go mainstream

Christer Fahlstedt, CEO, Paf

Cost efficiency a must

In the regulated part of our industry, there is a clear trend towards declining revenue per customer – a natural and inevitable consequence of stricter AML and responsibility requirements. This is putting the spotlight on the ability to convert revenue into bottom-line profit and the industry will be forced to critically review all items in the cost base to protect profitability going forward.

Fewer shades of grey

It will be increasingly difficult for industry players to ‘play both sides of the fence’. Respectable, serious actors will no longer get away with unlicensed revenue in their earnings mix. We will increasingly see a divide between larger ‘white’ companies and smaller and very much ‘black’ companies. Targeting regulated markets, regardless of what you think about the laws of that jurisdiction, must be done by the book. That also goes for the supplier part of the industry that has too long been able to profit both on regulated and unregulated revenue from the same markets.

Cowboy era over

Both the increased focus on cost efficiency and the trend towards fewer shades of grey are part of the same theme: the cowboy era of quick wins and exponential growth is over and the era of cost efficiency, building for the long term and playing by the book is here.

Glen Bullen, CCO, DAOGroup

CEE and CIS will power Europe’s growth

A new tech-savvy, crypto-friendly player is emerging across Eastern Europe and the CIS, which are going to be key for operators’ player acquisition and retention strategies in the year ahead. My predicted surge in potential customer bases here is two-fold. First, we’re looking at a demographic that ticks all the boxes in markets that are only just really starting to regulate. Potential players are most likely in their 30s, with plenty of disposable income and less propensity towards debt given the region’s lower cost of living. They’re also ardent sports and poker fans too. Secondly, we’re dealing with a unique environment that holds a crypto market waiting to be tapped by gaming operators. Whether you’re in Ukraine, Armenia, Georgia or Romania, there’s plenty of reasons not to be using local currency for the majority of your digital transactions. Offer players a way of gaming that cashes out faster than local currencies and you’ll be onto a winner.

Crypto payments go properly mainstream

Looking at PayPal’s endorsement of crypto payments last November, alongside just about every other major PSP already having crypto payments aboard, and we can arguably say that crypto gaming has already entered the mainstream. Given all the recent chatter about bitcoin’s run with just about every major financial pundit predicting astronomical levels, we’re also now at a point where it’s a verifiable mainstream asset. Inevitably, we’re at a point where regulators are already looking to stake their claim as first past the post as a continental hub. We’ve seen the Maltese Financial Services Authority issue its first crypto payments licences, which is likely to quickly accelerate the process it originally started in 2018. It might sound sceptical, but when you look at Facebook, with the launch of Diem slated for January, as well as Morgan Stanley looking at its own coin, change is clearly imminent – as well as Silicon Valley and Wall Street ready to put their weight behind it.

2021 will be the year of adapt to survive

If lockdowns persist throughout the first half of 2021, online operators are going to need to start radically rethinking their acquisition and retention strategies. This is simply because of the effect the economic situation will have on their existing player bases. December has already brought about a sense of urgency among operators to be more encompassing to different players needs in terms of content and the ‘customer journey’. They want to be fully covered as places such as the UK are likely to be in for a long winter. This means integrating products that will allow them to be adaptable for future challenges, as well as appealing to a far wider demographic. Whether that’s live casino or esports – or a radical shift in the nature of your platform and the payment options you provide – it’s going to be all about attracting a broader spectrum of customers than ever before. If you don’t adapt now, you’re no longer going to have the luxury of knowing your competitors are also in the same boat as you, as they just spent Christmas building a lifeboat.