British bookmaker Ladbroke opened its first high street betting shop in 1962.
1962 was also the year the Beatles released their first single ‘Love me do’, Marilyn Monroe sung Happy Birthday to President John F Kennedy, and The Century 21 Exposition (the Seattle World’s Fair) unveiled innovations including a pager, a cordless phone and a new thing called a ‘computer’.
It was the phone and the computer that went on to spark a technical revolution that changed the face of commerce across all sectors.
In the fifty-five years since Ladbrokes opened their first physical shop, the gaming / betting landscape shifted dramatically. So much so that in late 2017, Ladbrokes (now Ladbrokes Coral) agreed to a £4bn deal with GVC to create an online-led global gambling giant, combining Ladbrokes' high street and online operations with GVC's brands, including FoxyBingo, Sportingbet and PartyCasino.
In trends similar to those previously experienced across the retail and banking sectors, the number of land-based (brick-and-mortar) gaming outlets across the UK decreased by 3.9% between May and September. Similarly, the number of bingo premises went down by 1.4%.
Elsewhere around the world, the numbers show a similar drift away from brick-and-mortar premises. For instance, land-based revenue in Belgium fell from €127 million in 2011 to €102 million in 2015.
In contrast, online gaming is moving from strength to strength. In the UK, the online industry earned £4.7 billion between April 2016 and March 2017. And in the US, it’s expected to exceed US$4 billion by 2020, despite a complex and often contradictory patchwork of local, state and federal laws.
It’s worth noting however, that online gaming, while on the up, only comprises 34% of the UK market. Which means the other two-thirds still belong to land based operators. And in the US, the casino industry actually registered a 4% year-on-year growth between 2016 and 2017.
These numbers indicate that there are significant revenues to derive and players to delight across both online and land based gaming models.
Regardless of where or how players engage, operators must focus on continuously improving the user experience within each model.
Consider that the player’s journey, like the buyer’s journey in other sectors, is no longer linear. Players – particularly among the younger demographic - start on their laptop, then shift to their smartphone app expecting to pick up where they left off. They’ll walk into a casino and expect to be able to transfer the game they’re playing from the virtual to the real world – while still using their credits, bonuses and their favourite digital wallet to pay. So, as much as operators can thrive in the digital age by focusing on unique experiences, there’s also a case to be made for greater convergence between land-based and online spaces. Games developed with an omnichannel mindset – to be played across gaming machines, desktop platforms and mobile apps – consistently out-perform single-channel games.
The desire for omnichannel experiences, however, is not the only reason that synergies between online and land based gaming are increasing. According to a study, land-based and online gaming models attract different types of players and serve different consumer needs. Players who start in a land-based environment tend to be more brand-loyal once they move online — a distinct advantage in a fast-moving space that’s overloaded with choices. By contrast, online gaming tends to appeal to younger, more affluent players — the elusive Millennial and Gen Z gamers.
It’s the Millennials and Gen Z in particular that enjoy consuming entertainment on the go. They’ll play on their smartphone to pass the time during their commute. Then perhaps, they’ll dip in again at home to blow off steam after a long day. Having grown up with the most sophisticated games ever made, their expectations are high and patience low. And they tend to like games involving an element of skill, as opposed to the classic games of pure chance that are the gaming industry’s bread and butter.
Adapting to these tastes and expectations is critical for both online and land based operators, or as Valery Bollier, CEO and co-founder of Oulala games put it: “the gaming business will fall off a cliff...”
For online operators, this has meant fusing wagering with games involving decision-making and skill, such as arcade-style video racing. Offline, operators have been stepping up the experiential side of gaming, which is arguably where they have an edge. Case in point, William Hill have been developing a game, dubbed Get in the Race, that uses virtual reality to recreate the horse-racing experience from jockey’s perspective. The game is still a prototype. But if it’s successful, it could be a tipping point for the player experience in land-based premises.
Complementary, not in competition
The GVC / Ladbrokes Coral deal bets £4bn on online and land based gaming models being increasingly complementary, rather than in competition with each other.
Players are moving fluidly between real world and online gaming and expect operators to be present across both models. In both arenas, operators must surprise and delight their players - and not just in ‘play’. Equally critical to customer experience is removal of the points of friction around the mechanics of the wider player journey. Payment solutions partners such as Paysafe can offer the expertise and technological capabilities to smooth this path for both operators and players.