Industry predictions for 2024: Customer retention to be vital as bonuses face an uncertain future

Stuart Simms, Oddschecker Global Media group CEO

Retention strategy will become increasingly paramount 

The focus on acquisition by the industry’s big players has been well-reasoned in recent years, particularly with the rush for a US footprint, but with CPA skyrocketing and customers becoming more educated on the betting propositions available to them, it’s going to be a year of maximising returns from existing audiences. 

That’s not to say that it’s not already a key strategy for most operators, but I’d expect to see a renewed push in both investment and creativity by retention decision makers. Internally, operators should be taking the time to understand why their committed customers have hung around and adapt those learnings to those that have just come through the door. Externally, supplier partners are becoming evermore equipped to provide the data and complementary betting tools that keep customers returning to the same well-performing operators time and time again. 

Additionally, 2024 isn’t a time to be frugal on the marketing front, but it will be the year to start thinking about cementing core customer segments which provide the sustainable revenues to be relied on when looking to scale up or enter new jurisdictions down the line. 

Better tech and big data will be the key to operator scalability 

Operator resources are being stretched by new market entries, regulatory evolution and a trend to limit marketing activity. This shouldn’t necessarily mean building out bigger departments internally, with access to quality talent increasingly difficult in the post-pandemic world. Instead operators, no matter the marketplace, should be looking to tap into the tech and data tools that enable them to be more effective in scaling operations in new and existing markets. 

Not all bookmakers are equipped with the technology in-house – or the data that underpins it – that supplier partners working across multiple global markets and with hundreds of operators do. There’s obviously the buzz around AI, and before that, machine learning, which will inevitably become a core part of the trading and marketing function, but for now, my priority for growth would be looking to tap into external tech partners who have been there and done it, saving both the cost and risk of implementing internal tech investments. 

External betting tools will further shape the betting interaction 

With the US market able to tap into the established best practices of operators across the pond, its customers have been fortunate enough to engage with slicker betting sites from the off that prioritise straightforward functionality when it comes to finding and placing a bet, as well as the payment integrations that go with it. 

From my experience in other markets, when this tipping point is reached – in terms of a customer being comfortable with both using and trusting a set of operators – they look elsewhere to complement their betting activity, primarily in the name of reducing house edges and maximising value across their portfolio.

While certainly not limited to the US, I’d expect 2024 to be the year where a broader segment of bettors across its open states begin incorporating third-party modelling, price comparison and statistical analysis tools to ensure they’re giving themselves the best chance of beating the operator.

Those operators who embrace these customers with better prices and on-site widgets, for example, will be those who limit the friction for them and keep them coming back for longer. 

Jamie Walters, CEO and co-founder of QiH Group 

The use of AI will grow exponentially 

There’s been a lot of talk about AI recently and from our early experiences, we see it as having a lot of potential, both for our business and the wider gambling industry. There is no end of uses for AI in areas such as modelling and data science, as well as the obvious potential in content creation. Therefore, I expect its use to become much more widespread in 2024. AI has the potential to lead to serious productivity gains by taking away a lot of the legwork in many areas of business, although finding the right balance between AI and the human touch will remain vital. 

One area where the industry needs to exercise caution though is player protection and responsible gaming. There are serious risks to deploying AI here and regulators want to see evidence of human intervention when dealing with players who may be at risk. Any company relying too heavily on AI in this area will be taking a big risk. 

The US market will further rationalise 

The announcement of Kindred’s exit from North America was yet another sign that the gold rush is beginning to subside in the US. There has been a lot of talk about how many operators can really succeed in the US, with some predicting the market will eventually be dominated by five big operators. The battle is currently being won by Fan Duel and DraftKings and it seems likely they will maintain the number one and two spots in the market for the foreseeable future. 

As the landgrab slows down, acquisition costs will fall and the money available to affiliates and other suppliers will probably reduce off the back of that, so I expect there will also be losers in the affiliate space. On the other hand, the cost of being an affiliate is not as high as the cost of being an operator, and this leaves more space for affiliates to service those fewer operators. And while there might be less money available per player, the number of consumers joining the market will continue to increase and new states will become available as well. 

Regulation will lead to a switch up in UK bonusing trends 

The recently published Gambling Commission consultations contain a couple of proposals that look set to have a significant impact on the bonuses offered by UK operators, namely the plans to limit or even ban wagering requirements and prevent the mixing of verticals within bonus offers. 

In reality, the former may end up being a financial advantage to operators. Bonus costs are a significant acquisition and retention expense and by levelling the playing field by capping everyone’s upper limit, the arms race will effectively be constrained. 

There are alternatives to bonuses with wagering requirements that are very attractive to consumers as well; we can see from our own data that free spins and no wagering bonuses are already widespread and very popular.