Industry predictions for 2020 - including native apps, esports and UX

Chris Benstead, digital director at Degree 53

Higher investment in mobile apps

With the latest requirements from Apple to provide more app-like or native apps, operators will need to focus on the native experience of their products to be true to the platform. While I don’t see everyone redeveloping their container apps to native formats, I believe there will be a larger focus on improving the existing products and working alongside Apple to create better apps. There might be a divergence in operators who are going to commit to a mobile app strategy (and a subsequent increase in product quality) and those that will not.

Expansion into new territories

The US gambling market has opened new doors to the European operators and has offered lots of opportunities to expand their services state-side. With more emerging markets to follow, such as South America, I see more operators will try to move there in a similar way to the US. The UK market doesn’t offer much movement for existing operators and the legislation makes it much harder for new entrants too, so newly established markets will offer a much easier entry to them.

The continuing rise of the importance of UX

We see operators focusing more on ensuring that every user journey is optimised for acquisition and retention within their products. It makes sense to update the product across all platforms to provide the most relevant UX. Moreover, a lot of operators, particularly those entering the US, have relied on white-label solutions for speed to market. We predict that to differentiate, those operators will look to optimise their UX and front-end, favouring more custom options that will offer a better engagement and customer journey.

Andrew Tait, partner, Ince Gordon Dadds LLP

Esports regulation

The increasing publicised  phenomenon of minors succumbing to “problem video gaming”  is likely to pile on political pressure in the UK and elsewhere to regulate this sector or least aspects of it such as loot boxes. The DCMS has already started an inquiry into this and given the high participation of minors, it will only be a matter of time before the videogaming sector is forced to adopt similar controls to the gambling sector, to protect the vulnerable against compulsive spend and play sessions. The gambling sector therefore has an opportunity to accelerate game publishers’ understanding of this issue and build their own viable solutions before being forced to adopt prescriptive and customer unfriendly ones.

Step back into unregulated markets

The honeymoon period of targeting regulated markets only to ensure certainty and stability is over. There has been a general tightening of the compliance and tax in regulated territories, with the UK, Sweden, Italy, Australia to name a few. Higher taxes, restricted marketing and bonuses,  evasive money laundering and problem gambling controls and other such measures are frightening players away and squeezing many operators’ margins beyond the point of commercial viability. Many will simply surrender their licences and seek alternative unregulated markets. This will of course increase their risk profile but those flexible enough to  provide B2B offerings and/or radically restructure their business will not only survive but flourish as long as they can monitor and pre-empt the movements of the global regulatory landscape .

Squeeze on banking and payment methods

This is becoming a key factor on par with regulation & compliance , as many banks de-risk the sector completely or create significant hurdles. Operators will need to have an increasing array of contingency bank accounts ready in case their primary bank suddenly shuts down their account. The ability to penetrate new markets, particularly unregulated ones will first depend on the availability and standard of payment service providers (PSPs). However with PSD2 and the pulling out of main high street banks from the sector, the door has been opened to a new breed of opportunistic  PSPs. Operators will therefore need to research these new suppliers and align their money laundering controls and target jurisdictions to  meet their new requirements.