The “I’s” have it. And they have begun to run with it.
The “it” is business momentum, sweeping the ascendant iGaming world in the wake of a landmark judicial victory seven months ago. When the United States Supreme Court struck down PASPA (Professional and Amateur Sports Protection Act) in May, legalizing sports betting in the world’s biggest market, ripple effects ensued.
Operators see a vast, untapped niche; vendors view a bevy of new customers; regulators eye new tax revenue; and gamblers seek brick-and-mortar convenience at home. They can even have a new acronym for PASPA, like Play Any Sport, Practically Always. Poker, football, baseball, and classic gambling action now unfold, at the touch of a finger in the United States. So do teases and parlays. Online gaming today reaches far beyond its original hubs of Gibraltar, Malta and the U.K.
This is a prosperous time for iGaming power brokers. They race to provide product for a market ready to burst at the seams during the next wave of online gaming approvals. State by state, the barriers seem ready to fall like dominoes. The Roaring Twenties, in this century, may come early.
In the long term, the industry views mobile as its catalyst and may see blockchain technology (which allows digital information to be distributed, not copied) as an important security infrastructure.
Yet right now, the atmosphere is giddy. This was the year the shackles came off and iGaming soared to life. Bring on the next vendor. Bring on the next bettor.
The I’s have it.
The Science of Digital
A prime industry stalwart is SG Digital, a division of Scientific Games. It was formed in January 2018 through the combination of NYX Gaming Group and SG Interactive, offering expertise in SG online gaming, sports and iLottery. SG Digital provides an unparalleled suite of engaging game content and product solutions, according to Dylan Slaney, the company’s senior vice president of gaming.
What better time to be relevant?
“The iGaming market is flourishing right now, bolstered by the everyday player’s thirst for new and interesting entertainment methods,” he says. “We’ve seen huge changes in regulations and a real focus on responsible gaming, which gives players a higher degree of trust in the operators, platforms and content they are using.
“Our global presence sets us up for success in any regulated market,” he adds, “and our Open Gaming System content aggregation platform gives choice for our customers with more than 2,000 premium titles available on our platform. The true scale of this platform is one of our unsung strengths, as we have over 130 customers accessing games from over 40 content partners worldwide. We process over 1.5 billion game rounds per month.”
Slaney says the looming American market expansion requires more supply, and lets SG Digital showcase its content library.
Product depth, and timing, will be critical to serving the enhanced iGaming arena.
“We are competing for the leisure time of players with the likes of streaming services such as Netflix, gaming consoles and social games,” Slaney asserts. “Players want the best, most thrilling and entertaining content, and our new product library provides that by adding a refreshing twist on typical iGaming titles with various mechanics like crosswords, word searches and hidden tile puzzles. An industry that fascinates me at the moment is esports, with viewership in excess of 40 million to 50 million people watching these events. The growth has been astounding.”
Slaney says iGaming mirrors the lifestyle of many of his company’s patrons. The ability to play in the comfort of one’s own home and switch to mobile instantly is a major focus. He predicts an exciting product rollout for ICE 2019.
Right On (Line) Point
For IGT, meanwhile, the beat goes on. Or maybe that’s online.
The company is already renowned for enabling players to experience their favorite games across all channels and regulated segments, from gaming machines and lotteries to digital and social gaming. It has both a strong local presence and relationships with governments and regulators in more than 100 countries.
In the fourth quarter of 2018, IGT secured two major deals. The company signed a five-year agreement with Penn Online Entertainment, LLC, a subsidiary of Penn National Gaming’s Penn Interactive Ventures (PIV), for its PlayDigital division to provide a full suite of digital gaming products, including the platform and services for the newly regulated Pennsylvania online gaming market.
IGT’s digital gaming platform, PlayCommand, will enable online gaming for Penn National’s Pennsylvania-based customers via its online gaming portal, HollywoodCasino.com. Penn National will also leverage IGT’s PlayCasino to offer an expansive library of player-favorite slot games like Wheel of Fortune, Elephant King, Ocean Magic and Cleopatra. Penn National also agreed to deploy IGT’s PlayBingo and PlayPoker online solutions.
“We’re excited to leverage IGT’s platform and content for our online gaming launch in Pennsylvania,” says Chris Sheffield, the managing director of PIV and senior vice president of Penn National Gaming. “The flexibility and reliability of the PlayCommand platform, coupled with the proven game library within IGT’s PlayCasino, give us confidence HollywoodCasino.com will deliver the same caliber of world-class gaming entertainment that our players have come to love in our land-based casinos.”
“IGT PlayDigital’s vast portfolio of proven digital solutions enables us to quickly address our customers’ needs across online gaming, sports betting and on-premise mobile gaming,” adds Enrico Drago, IGT’s senior vice president of PlayDigital. “The newly regulated Pennsylvania online gaming market presents an exciting opportunity for IGT to extend the success of our PlayCommand platform and PlayCasino to Penn National as it expands the scope of its entertainment offering.”
IGT’s PlayDigital solutions for Penn National in Pennsylvania are targeted for deployment in the first quarter of 2019.
And, late in 2018, the company has launched the first cross-platform online wide area progressive in the United States. Multiple online casinos in New Jersey now offer IGT’s MegaJackpots WAP games.
Players in New Jersey can now vie for progressive jackpots playing IGT’s MegaJackpots games on the several gaming websites. They include CaesarsCasino.com, HardRockCasino.com, MoheganSunCasino.com and ResortsCasino.com.
IGT PlayDigital introduced the MegaJackpots Slots family in New Jersey with two games, MegaJackpots Cleopatra and MegaJackpots Siberian Storm. More games will follow. The jackpot pool starts at a base amount of $500,000 that is seeded by IGT, and increases in value as players wager on the games.
Positioned to Prosper
The growth of iGaming features a strong heartbeat, according to Henrik Fagerlund, the chief product officer of NetEnt and managing director for NetEnt Malta, Ltd.
“This is a thriving and exciting sector,” he says. “It is in the forefront of tech, innovation and a big part of the online entertainment industry. iGaming is very much a global industry, with a regulated market worth tens of billions of dollars. Due to revenues growing and a steady flow of new markets opening, we expect this to continue to increase at a strong rate. The digitalization and the demands from people to consume their entertainment online put us in a great position.”
In the American market, NetEnt waited for a ship that came in. The company was founded almost a quarter of a century ago when online casinos weren’t even around, he notes. Fagerlund considers NetEnt a prominent pioneer and contributor to this industry sector. NetEnt has a worldwide footprint involving more than 200 customers serviced by more than 1,000 employees across offices in Sweden, Malta, Ukraine, Gibraltar, the U.S. and Poland. The company’s gaming systems alone handled over 41.2 billion gaming transactions in 2017, he says.
And the hits, particularly in the market-rich United States, keep coming.
“We are particularly excited about our progress in the U.S. and across the Americas, where we have signed numerous partnerships and are now regularly launching our games, which are proven to be the most popular on the market,” he indicates. “This includes a leading range of branded titles that will soon feature a couple of huge new names—Vikings and Narcos, two of the world’s most popular TV series.”
Fagerlund says that after years of promise and expectation, progress finally unfolds at a faster rate in the United States for online sports betting and gaming. He refers to the last G2E as an accurate market barometer.
“There was a tangible sense of heightened momentum and confidence for iGaming at this year’s conference,” he says. “A lot of that can be accounted to the decision to repeal PASPA earlier in the year.
“Certainly, the initial opportunities are going to be bigger when it comes to sports betting, but we already have games live in New Jersey with all seven licensed operators across 19 brands… The U.S.—and the wider Americas region—is a high priority for NetEnt.”
Fagerlund cautions against unrealistic expectations, citing high tax rates in jurisdictions like Pennsylvania. Yet long term, he foresees a windfall. The company also adjusts to different work climates between Europe and the United States.
“A key difference between Europe and the United States is the way in which the games and operators are branded and marketed in order to meet local expectations,” he says. “It is vital to ensure this happens in a culturally sensitive manner, with sponsorship and advertising leveraging appropriate assets.”
Fagerlund says NetEnt is about to take efforts up a notch with the launch of Vikings, a video game based on the acclaimed TV series, featuring immersive footage and imagery inspired by the historical drama.
The 2019 forecast includes the addition of the hotly anticipated Narcos video slot. Narcos is one of the world’s most in-demand digital series, available to watch in more than 130 countries.
Powerball to the People
Slick, sophisticated and accessible. Click on a tab and seek a $71 million prize on a $2 ticket. Register, download the app, qualify for a bonus. Sound like a cutting-edge private company?
How about a state-run program? The Michigan Lottery sports a highly effective online presence, and continues to fund education programs throughout its state by offering selections gaming companies would envy.
“Our focus from day one has been to provide players an excellent online experience with engaging and entertaining games and a system that’s easy for them to use,” says Jaime Guerra, the affiliated program marketing manager for the Michigan Lottery. “Since the online games launched in 2014, we’ve used a data-driven approach to adjust and refine it and add new games to attract new players and encourage return visits and repeat play from existing players.”
Reported numbers are impressive. The Michigan iLotto has signed up more than 800,000 accounts. Instant win revenue alone has climbed from $18.5 million in 2015 to a staggering $77.9 million last year, according to published figures.
Guerra says that while the Michigan Lottery can acquire a large volume of new players with traditional draw-based game favorites like Powerball and Mega Millions, its online instant win and keno games are where it discovers player loyalty.
The Michigan iLotto runs various promotions. Guerra says it has strong player retention plan and ongoing promotions to keep players engaged using various offers. Email and SMS communications are broadly used, as well as more personalized and targeted campaigns. It also found that the Welcome Offer promotion is effective at acquiring new players. The lottery offers up to a $100 bonus credit on a player’s first purchase.
Throughout the industry, iGaming optimism is unprecedented. The blueprint could be: pause, take a breath and sprint toward the next opportunity. For many people in the business, this could be the boom of a lifetime.
Big Picture, Small World
How boxing may be revived with special streaming service
There is a parallel universe for iGaming, which illustrates a broad movement in customer preference. A revolution has occurred in the boxing world, citing tablets, smartphones and computers as catalysts.
In October, Canelo Alvarez, one of the sport’s all-time revenue generators, signed a five-year, 11-fight deal worth a minimum of $365 million with streaming service DAZN, which had launched in the United States in September. It already had been in Canada, Germany, Austria and Japan. The United States deployment, ironically announced the same month of the PASPA repeal that opened the iGaming floodgates in May, proved to be seismic. The game-changing Alvarez deal shortly followed.
The Alvarez contract emerges against the backdrop of a whopping $1 billion deal over eight years reached between Eddie Hearn, the promoter of heavyweight superstar Anthony Joshua, and DAZN, a British-based streaming service known as the Netflix of boxing. Customers can sign up for roughly $11 a month and gain an avalanche of major boxing and MMA content on the device of their choice. They will receive at least 32 major events for that price, many involving the world’s top athletes. Skyrocketing pay-per-view prices of $100 figure to become extinct.
DAZN is the platform service owned by British sports media company Perform Group. Mirroring a successful gaming vendor, Perform has spread worldwide tentacles and intends to apply the streaming vehicle to many sports.
This formula, a small price tag aimed at scores of customers, delivered a shocking hit on HBO, boxing’s signature network for much of the last 45 years. In the fourth quarter of 2018, HBO announced its intention to withdraw from the sport, signaling a monumental departure and a vivid sign that devices outpace television in the world of demographics.
In retrospect, the Alvarez deal and HBO bow-out will likely be considered the 1-2 punch that ushered in boxing’s digital age. The parallels between boxing and gaming are striking. Customers will spend hours playing on their device, even more than they previously watched on television. This has formed the basis both for gaming and sports-related choices.
And boxing is not alone.
UFC landed a major media partner in a new multi-year deal with ESPN, which will showcase the sport on its new direct-to-consumer subscription service starting next month.
Under this deal, 15 live UFC events will stream exclusively on ESPN+, the new streaming service. Streaming rights are increasingly being valued by sports leagues and networks as key complements to broadcast deals.
The arrangement, a first between the UFC and ESPN, is a substantial new asset for the $5-a-month subscription service, which features a selection of Major League Baseball and National Hockey League games, plus a grab bag of other sports.
The companies’ announcement also promises the action will appear on “a variety of ESPN’s television, social and digital platforms,” in English and Spanish. Each event will deliver a full card of 12 UFC bouts. Again, streaming is not limited by network programming commitments. Fight cards can go on, seemingly endlessly.
