Navigating the three key challenges of regulation, retention and acquisition

“I got a business to run. I gotta kick asses sometimes to make it run right,” said Moe Greene in legendary movie The Godfather, referring to his casino business.

Fiction indeed, but what is true is true, and running a casino was never an easy job, either 50 years ago or now and still equally valid for offline and online.

Profitable as it may be, it is a damn hard one. If you want to run it well, you have to kick ass (solve problems) in so many different directions all the time.

Alive and kicking you must be, but also tremendously adaptive. Because hurdles in the online gambling space change every year and sometimes even more often.

There are three general hurdles that will probably continue to lead the table for the next few years. Handling these top three of challenges should be a cornerstone of all industry strategies for the years to come.

Without a strong and innovative action plan for facing these challenges, every operator will end up in the mediocrity scoreboard for market share, at best.

Regulation

Legal frameworks for online gambling have been ferociously developing for the last 10 years. All around the world, many countries have gone from zero to hundreds of pages of law acts. The old days of operating everywhere under a licence from an offshore territory are gone and now a lot of key countries have their own legislation, licence issuing procedures and restrictions.

In many aspects, these restrictions differ from one another, from slots betting in the UK through to forbidden cross-channelling in Germany, to a total ban of ads in Italy. It is a very long list and international operators face different regulation “punches” every month.

Moreover, lawyers and consultants are often still unsure of what is allowed and what isn’t, and so they are regulating the authorities in many cases.

In these dynamic times, whoever wants to remain in the big leagues must prepare to invest heavily in compliance research, analysis and expertise. They must also be able to balance and plan well, adapt on the go and move fast.

It’s best to analyse in advance the pros and cons of entering or remaining in a certain market. Not long ago, a board member of a tier-one operator stated it would have been more profitable for their group if they had opted to operate in non-regulated markets only. So, it never hurts to invest more in pre-action research and scenario planning.

Acquisition  

The war for traffic out there has never been more serious. Rev share percentages to affiliates are hitting an all-time-high and easily reach upwards of 50%. Such numbers speak about operators being desperate for fresh traffic.

A lot of well-planned newly born projects will stop developing due to traffic issues. No wonder CPAs for a single depositing user reportedly reached more than €500 for 2020 in some European markets.

Things are going in a wrong direction with media buying and black hat SEO playing a bigger and bigger role, having turned into a vital source of traffic for some operators. Not good for them and not good for the industry in the long run.

What we need in this case is creativity and new ideas. For ads, for messages, for channels, for strategies, for partnerships. With so many channels, networks and platforms stepping up so often, talented marketers could surely come up with innovative in-house solutions, that may go slow and stumble at first, but will definitely find their way eventually.

Retention

Even the best traffic numbers by no means guarantee stable, satisfactory results in terms of loyal customers with regular activity. Visitors need to be taken care of if you are aiming at building a sustainable business. A lot of companies neglect the need and the significance of retention. With such tense competition these days, it’s far from being enough to simply get a registered user.

Once in your house, such a guest should be treated with great care and enthusiasm. You need to build a rapport, create trust and offer fresh food and drinks every week. In online gambling, you do this by providing immaculate customer support, a smooth payment process and creative tricks to enrich the customer journey on a regular basis.

Investing in these three directions will not guarantee, by itself, profitable operations. But not making them top priorities will definitely lead to costly problems and tons of missed value.

Georgi Stoianov has spent almost 10 years in online gambling, mainly in risk management, operations and affiliates. He is currently head of operations at WINBET.RS.