Five years ago, ICE London was a showcase of futuristic concepts in the gaming industry. Attendees observed innovations ranging from immersive virtual reality slots to smart gadgets that promised a new era for online betting. The vision encapsulated a world where our everyday experience coexisted with augmented (AR) and virtual (VR) realities and where blockchain technology heralded an age of transparency in gaming, with households equipped with smart fridges featuring betting apps.
However, many of these trends have not materialized as expected. It raises questions about whether businesses have diminished their enthusiasm for groundbreaking technologies or are merely taking a more cautious approach to future trends.
According to Matt Howard, a partner at consultancy Propus Partners and CEO of OrbitalBet, the decline of many once-promising trends can be attributed to the fundamental question of utility. "What it always comes back to, for me, is what is the improvement you’re gaining or the problem you’re solving by building this new product feature or using this new technology?" he explained. "If you can’t answer that question, to be perfectly honest, then you’re probably not in a good place to start throwing money at those things."
Howard points to the initial excitement surrounding VR as an example. When Google launched its Google Lens headset in 2017, many anticipated rapid adoption outside of the hardcore gaming community. Within the gambling sector, developers explored novel ways to integrate VR, showcasing it at prominent trade events.
"Unfortunately, these things didn’t take off in the way the world expected them to," Howard remarked. "Perhaps with the VR and AR stuff, the industry wasn’t necessarily asking for them. People weren’t sitting at home thinking that these were things they wanted to do with gambling."
Conversely, not all emergent technologies have been sidelined; some, like cryptocurrency, have significantly gained traction, though primarily in instances of clear necessity. Since 2019, Bitcoin, the leading cryptocurrency, has appreciated over 2,500%, with countries like Malta and Japan incorporating it into their financial systems. For online betting, cryptocurrencies offer rapid, low-fee transactions while ensuring anonymity, benefiting both operators and customers.
The application of blockchain technology, however, is less straightforward. "Loads of companies have looked at whether we should build an entire platform on blockchain. But what’s blockchain doing? Why is blockchain better than the technologies we’re using now?" questioned Howard. While blockchain assures secure transactions, its practicality is debated within the dynamic betting environment.
Howard elaborated, "It’s providing an answer that we haven’t needed in terms of sports betting as a whole. But it does solve a problem with payments."
Understanding consumer readiness for technological engagement is crucial for innovation across sectors. Everett Rogers' 1962 work, Diffusion of Innovations, outlines five stages of technology adoption, highlighting that while innovators represent just 2.5% of the market, the late majority and laggards comprise 50%. Rich Criado, formerly VP of product development at Fanatics Game Studios and Penn Entertainment, emphasized the importance of matching innovation with consumer readiness.
“In online casino, there has been a lot of innovation in some areas and not so much in others – and a lot of that is due to the customer base,” Criado noted. He pointed out that fans of mobile and video games are generally more receptive to change than traditional casino customers. As an example, the complexities and requirements of using VR headsets conflict with the preferences of average gamers who prefer simpler, immediate access to games via their phones.
Criado believes innovation within the igaming sector will be gradual rather than revolutionary. He said, "I don’t think the innovation is going to be some big giant new killer app. I think it’s going to be incremental add-ons to what you see today."
In the burgeoning U.S. market, Criado has emphasized a slow integration of new features, gradually introducing innovations to gauge what resonates with players. These could range from new multiplayer features to gamification elements that elevate engagement, producing a market closer in sophistication to the EU.
“This trend of acquiring agile startups, like DraftKings’ deal with Simplebet for micro-betting, highlights the industry's adaptive approach,” Howard stated. “Innovation probably comes from the startups rather than the incumbents.”
As the U.S. igaming market, traditionally led by land-based casinos, evolves, significant features enhancing user engagement, such as tournaments and bonuses, began to gain traction. Criado explained that casinos have realized the importance of providing tools to enhance retention and engagement.
While operators are poised for innovation, they still face challenges in replicating the lively social atmosphere of physical casinos in online settings. Streaming live games from MGM casino floors is a step in the right direction, but Criado believes breakthroughs in this area could define future market leaders.
Drawing from his experiences at Fanatics, Criado sees potential in creating games that allow for a sense of player control, enhancing the overall experience. “The thing that excites me the most right now is that the runway that’s in front of us for innovation is so great,” he concluded, noting the industry's potential to engage younger generations who expect more interactive gameplay.
Developing a sense of agency in games of chance will be crucial as new players enter the market. Criado shared examples from his career, illustrating how minor adjustments can lead to more engaging player experiences.
As the industry's landscape shifts and adapts to new demands, the research into player preferences and gameplay mechanics may prove instrumental in attracting the next wave of gamers, ensuring the long-term success of the sector.
