What the gambling industry can learn from Silicon Valley

It’s over a quarter of a century since the release of the first commercial web browser heralded a new model for commerce and communication. And it’s over 10 years since ‘compound’ breakthroughs in smartphone, cloud, big data and social media changed how we live and work forever.

Yet our sector seems to operate in splendid isolation of the potential innovations such breakthroughs herald. Sure, we’ve ‘optimised our channels’ and ensured we can deliver our product over these new gizmos, but – especially compared to the best of the consumer internet – our core propositions are pretty much the same as they were in the 1970s.

The operating practices and competitive demands for many sectors have been changed forever in recent years by a new generation of companies and leaders who have ignored the corporate rulebook: adopting new technologies, new working practices and serving customers whose lives now revolve around their mobile phone.

The Silicon Valley roll call is almost trite now in its familiarity, (Google/Amazon/Facebook/Apple), but there are also nearly 270 tech businesses founded since 2003 that have reached a $bn valuation (Atomico). What Netflix did to the entertainment industry; what Airbnb did to accommodation and what Uber/ Lyft are doing to transportation are all clear indicators of the shift towards a software-driven operating model – that the core asset of the ‘winning’ organisation is it’s code (not buildings, infrastructure, fleets).

Like incumbents in other sectors, established betting operators find it difficult to keep pace with change due to their size and the fact that they still make considerable amounts of money. To explore new business models could cannibalise or compete with their existing one. Unlike a start-up, they don’t have VC capital to burn while they experiment their way to the next big thing – this quarter’s results must be delivered, regardless of long term considerations, and the company’s best/core resources are dedicated to maintaining the status quo (this dilemma is perfectly outlined in Geoffrey Moore’s Zone to Win). They also find themselves hamstrung by legacy: legacy technology, legacy processes, and often, legacy thinking.

So instead, scattergun ‘experiments’ are adopted by isolated (quarantined!) ‘innovation labs’- infused with paranoia of ‘disruption’ but only diluting overall focus.

Barriers to entry

Whenever this debate arises the challenge of compliance is often raised – that our industry’s requirements are so much more stringent than the ‘valley’ has to deal with, so change just can’t be as quick/agile. It’s probably the case, however, that the legislative burden is one of the barriers to entry that has prevented a new breed of startup from challenging the status quo.

Rather than seeing regulatory controls as a burden, our industry should be taking the lead in showing how new technologies and fresh regulatory perspectives could set benchmarks for customer care and diligence that other sectors would envy. Yet even the much-maligned banking sector is ahead of us here – for instance the PSD2 initiative that requires banks to offer open APIs – a clear signalling of the importance of open platform models to the propagation of diverse, dynamic markets.  Our equivalents could be the adoption of blockchain to secure industry-wide data integrity and identity – underpinning true self-exclusion and fraud prevention. Or the standardisation of a cloud model that assures far better data security and (global) business continuity than any single operator’s in-house datacentre.

As the giants in our sector blend and merge into betting mega-corps (slowing down their own rate of change through sheer mass?), the time is right for a new kind of operation, led and staffed by customer-focused digital natives – the whole operation organised around product development with customers at its heart. A culture of experimentation and learning allowing small multi-disciplined teams to explore new business models, with an operating system driven by APIs, embedding it in a network of value-added services. This entrant is transparent in its policies and practices to establish the trust of customers who are sceptical of the betting industry. And it is constantly improving its services and rolling out improvements for a generation raised on the biannual upgrade.

The forces driving this model are undeniable. It is a matter of ‘when’ not ‘if’ betting is reinvented.

Finbarr Joy is group CTO for Superbet, a new challenger in the global betting and gaming industry. In prior roles, he has led technology transformation for global operators such as William Hill, BT and Lebara, previous to which he co-founded and ran a start-up software development company. Joy’s early experiences included two years with Netscape, enjoying a front-seat view of the first web revolution.