CCO Bobby Longhurst also talks about the pros and cons of operating in an emerging market and when it develops into a mature one with Gambling Insider
What ingredients make an emerging market appealing to gaming firms?
It’s an obvious point, but the most important thing is to have a population that is interested in betting and gaming first and foremost. That might be because of an existing land-based market, or the fact that they are very keen on sport. Good quality regulation, or at least the willingness to embrace it over time, lets everyone know where they stand, and a taxation system that is realistic are important too. We could go into some detail here and include socio-economic status, country GDP and demographic breakdown which are vital when measuring the value of an early emerging market entry. Lastly, and by no-means least, access to technology, whether that is wi-fi or 5G, desktops or hand-held devices, however it is not the be all and end all as we have seen in many African countries during our expansion into those territories. A product to suit multiple requirements is key though.
There are a number of prime candidates for emerging markets at the moment. But looking a few years ahead, which regions would you identify as future emerging markets that so far remain completely untapped?
There are still huge areas of the United States and LATAM that have yet to legalise any kind of online gaming of course, and many of those could be hugely successful if the ones that have regulated so far are anything to go by. History dictates that regulation (and the taxation revenue it generates) is ever evolving and huge swathes of governmental bodies are trying to tap into this, a lot of the time taking influence from neighbouring countries to expedite the process. Gaming is hugely popular in Asia already, but the regulation of markets in many of its countries would be hugely beneficial. I guess the holy grail among them would be China, but they are not showing any signs of wanting to legitimise the industry there any time soon, in fact quite the contrary is true, sadly.
When does an emerging market stop being an emerging market? I.e. a mature market or otherwise?
There’s probably not an exact answer to that one, but possibly when the industry is up and running with established operators competing against one another and advertising in place to support their businesses. I think the customer base has to have reached critical mass too, when retention becomes as important if not more important as acquisition. I also think regulation plays a huge part in this, the more challenging the regulation the harder it becomes to operate in those countries (UK for example) this would show maturity in the simplest of terms as regulators look at further ways to improve AML and KYC functionality challenging B2B providers like ourselves to adapt and change to these requests more and more frequently.
What types of companies are best-suited to tapping into emerging markets?
Companies like Pronet Gaming are very well-suited and for two main reasons. Firstly, we listen to the requirements of operators and regulators alike, and understand what it is that will make the business successful. Secondly, we have a dynamic enough solution to make that happen. There is a regrettable tendency among some suppliers to sell what they have rather than what is needed, which is something we’ve always avidly avoided. Our platform has been built with flexibility at its core, with the most challenging of market conditions set as a benchmark for growth. Taking the know-how learned in an established market and applying it to an emerging one may be legitimate, but seeking to replicate it with a one-size fits all solution is the wrong approach.