Opinion: Lessons to be learned

By now, the gambling industry should be aware that the younger, tech-savvy generation of players needs to be treated differently. These “digital natives” have grown up with online games and consequently expect high levels of functionality, speed, and choice from their interactive entertainment.

Over the last decade, the gaming industry has gone from a niche interest to one of the largest markets in the world. The biggest entertainment launch in history wasn’t a Star Wars movie: it was Grand Theft Auto V.

In terms of revenue and consumer expectations alike, games have raised the bar. If you provide fun or distraction at all, you’re not just competing with your closest industry rivals, you’re competing with Candy Crush and World of Warcraft. This is especially true for online gambling companies – and if they are to meet these increased expectations, they’ll need to do more than add bells and whistles to their existing products.

These old-school offerings may still bring in millions. But if you work in this industry, you know better than anyone that every hot streak eventually ends. To make your products appealing to the millennial demographic, it will be necessary to combine the innovations that have made gaming an undisputed success with the cash prizes of traditional gambling. At Geonomics, we call this “gamebling” – and here’s why it’s important.

Innovation starvation

A major problem facing the online gambling industry is that, instead of taking lessons from the burgeoning gaming industry, it’s entered something of a holding pattern. In 2015, companies are still content to port traditional casino games to the internet. It doesn’t matter if the basic mechanics are decades or centuries old (i.e. blackjack, poker), they don’t want to mess with what they think is a good thing.

This is not a future-proof strategy. The audience that plays these games is an audience accustomed to high street bookmakers; cross-selling to these guys is as simple as hawking 2-for-1 donuts to a compulsive eater. The younger demographic needs to be approached in a different way – with different, “gamified” products. Without the proper commitment and investment, the industry risks its very relevance.

Start it up

The lack of innovation from major industry players does, in theory, create an opportunity for start-ups. But there are still many barriers to entry for the types of small challengers that drive innovation in other markets.

Unlike in gaming, a start-up gambling company can’t simply develop a new product and place it in an app store to measure customer engagement. Rather, they have to adhere to legal and industry standards to get their offerings approved. This is expensive and time-consuming, and at the end, there is no guarantee that people will want to play it. For a start-up, this is risky business indeed.

There are further hurdles to vault in regions such as the US, one of the world’s biggest entertainment markets and home to many major tech hubs, where gambling is largely outlawed. Progress is being made, but the precarious legal situation forces daily fantasy sports companies such as FanDuel and DraftKings to use loopholes in order to do business.

As “fantasy” games – and therefore, games of skill – they can, at the moment, circumvent gambling legislation. But the problem with loopholes is that they are, more often than not, quickly close – both organisations are facing legal challenges at the moment. By emphasising player ability and progress (as online games often do), gambling companies may be able to abide by the law instead of work around it.

Times are changing

There’s no doubt there will always be a demand for gambling. That much is not up for debate. The thrill of taking a risk, the anticipation of the result, and the rush of winning (and losing) are emotions that have been served for millennia, and will go on being served long after today’s gambling giants are all distant memories in antiquity. The question then, is how can we adapt and evolve to stay relevant in a world that is changing whether we like it or not.

Luckily for the gambling industry, most people can’t see the future, so when it comes to predicting what the next big thing will be, your guess is as good mine. But the opportunities for growth and innovation characteristic of the online gaming market are also available to traditional gambling companies; they need only seize them.

True interactivity, real-time multiplayer games, rich graphics, slick user experiences, and above all, the ability as a player to affect your game (and that of others) are the hallmarks of gamebling, and I think embracing it is a pretty good bet.