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Cheltenham: Next steps for horse racing

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Cheltenham: Next steps for horse racing
Reading Time: 6 minutes

 

 

Horse racing is one of the oldest activities in the world and the Cheltenham Festival is one of the spiritual homes of the sport. While the meeting is guaranteed to deliver strong engagement rates for UK-facing operators, there’s less interest among sportsbooks further afield in Europe. However, as horse racing continues to grow on the international stage, are European operators missing a trick by not identifying ways to make Cheltenham Festival and other UK meetings appealing to their own audience?

With the festival kicking off this week, European Gaming spoke to experts in the field on how the sport can make an impact internationally and the best practices required to make it relevant to a wider audience, while maintaining its status in the UK.

Alan Casey, CEO of AllSported

Adam Conway, Head of Trading at SIS

Dylan Casey Head of Paid Media, Checkd Media

 

Huge opportunities abound throughout the festival which brings a great deal of competition. How can horse racing operators make sure they stand out from the crowd during the event?

Dylan Casey: Too many operators allow their messaging to become like wallpaper throughout Cheltenham week. The ones who succeed are those that offer something unique or present their offer in a way that captures the customer’s eye and paid social advertising can allow operators to do just that.

A major advantage of paid social for horse racing operators is the guarantee of eyeballs and the sequencing of the messaging. The control of adverts being seen in a particular order can allow operators to get creative and even allow them to tailor the offer a customer sees based on their behaviour.

When running paid social for partner’s during the festival, we like them to refresh their messaging and offers daily. By tailoring it to certain races, horses or even jockeys, the messaging is always fresh and can help to avoid ad fatigue.

Not all operators will have the flexibility and resources to promote a different offer for each day of the festival. However, even if an operator’s offer isn’t unique enough to stand out, paid social advertising provides them with a huge opportunity to present that offer in a way that will allow them to do so.

Alan Casey: Content is king. Creating a sense of familiarity and comfort is all-important in cross-selling. Time and again, we see that racecards that feature plenty of content, predictions and ratings improve dwell time significantly.

However, even when an operator has this all-important content, how do they balance the integration times with the results? Separate integrations and multiple API feeds can take time and a lot of resources to put in place. It’s true that content is not always the priority compared to revenue-generating add-ons like cashing out, but without the content to engage customers, it’s likely a sportsbook will only get customers who are there to make a specific bet.

As well as that, consistency and balance matters a great deal, operators don’t need to be stand-out price every race, but an operator needs to be competitive in every race in terms of pricing and place terms. An operator can acquire a lot of customers by having the headline offer of the day or week, but it leaves the door open for customers to exploit that offer and leave.

Adam Conway: Aside from the traditional marketing techniques that operators adopt for the week of Cheltenham Festival, such as attractive promotional offers, offering a vast range of markets that are appealing to both existing bettors and newcomers is important. This includes the use of derivatives, which complement classic markets and allows those with little experience of racing betting to get involved.

Through our partnership with RACELAB we can offer the latest in trading technology which can help operators stay ahead of the smart money and offer prices at opportune times that standout from the crowd.

 

To what extent is there an appetite for UK horse racing outside the UK and Ireland? How does the sport need to adapt to appeal to this audience?

Alan Casey: From a customer perspective, there is a huge appetite, especially with regards to Cheltenham. It’s an easy sell with the best horses, jockeys and trainers on show and there are always magical storylines that capture the public’s imagination around the festival.

The obstacle for international operators is that the sport requires a huge level of expertise to work within it. The time and financial investment necessary to building a team to monitor the landscape is formidable.

The obvious solution is to outsource, but even then, there are pitfalls. It’s possible that an out-of-the-box service will leave an operator open to inaccurate pricing and following the exchanges blindly is dangerous based on liquidity and latency issues. It can be difficult to acquire and retain horse racing customers and even more so if there is no differentiation in the offering.

Operators need to invest in a flexible solution with a great deal of two-way communication. It’s vitally important to be able to react to your own customers’ bets and factor this into pricing. If an operator is reacting to the market alone, that lag will eat away at their bottom line.

Adam Conway: The cultural significance of major UK horse racing meetings means less for international operators and their customers, but there are still opportunities for non-UK sportsbooks to make the most of these events. The betting product needs be optimised differently for markets where there is less racing heritage, otherwise bettors are not going to be as likely to engage. This means promoting certain markets that can be more relevant to them. For instance, derivatives are becoming increasingly popular with international operators, with markets such as match betting and odds vs. evens far easier to understand. Ultimately, these types of markets don’t require as much insight into the sport itself, which encourages a wider audience to engage with the product. Horse racing needs to attract a new generation of bettors, and outside of the UK these kinds of markets are important to this approach.

Of course, establishing an in-house trading team to cover 24/7 racing events can be costly. In addition, the availability of traders that have the specialist knowledge required can be difficult to find in markets where there is a modest racing culture, which means they cannot efficiently manage pricing and risk. Our SIS Trading Services can help operators in these markets by offering them a fully outsourced solution that leaves the entire racing proposition in the hands of our experts.

 

How can international operators capitalise on UK horse racing meetings like Cheltenham Festival, which are proven to generate strong bettor engagement in its home market? What can domestic operators do to maintain a slice of the action amid such intense competition?

Adam Conway: One of the main challenges that UK operators face during major UK meetings such as the Cheltenham Festival is profitability. Promotions which include offers like extra places paid can impact the overall margins they can make. These sportsbooks require products and tools that can grow business and maximise margins. At SIS, we are working hard to make this possible by enhancing our Trading Services with the addition of next generation trading tools. In partnership with RACELAB, our traders now have the very latest technology advantage, ensuring we can stay ahead of the smart money and produce more intelligent prices. This includes the Odds Engine compilation software, which has the biggest breadth of content and the most sophisticated trader controls and the highest number of priced horses (including all the local pools).

For international bettors from regions where there is less racing heritage, we have found that it has been useful to offer additional levels of support to operators new to the sport. This means increasing the emphasis on those betting markets that are simpler to understand and don’t require specific in-depth racing knowledge. We can offer operators a managed trading service to help them manage their risk.

Alan Casey: A little education goes a long way. A huge number of people that aren’t full-time racing fans flock to bet on Cheltenham every year because of the status it holds. Investing in the right odds and pricing package that includes content as part of the deal can go a long way towards engaging these fans, as well as seasoned ones.

Cheltenham simply lends itself to this kind of content with some captivating narratives every year. Rachael Blackmore and Henry de Bromhead combining throughout last year’s event and taking the festival by storm stands out as a great example. There are always interesting narratives surrounding Ruby Walsh and Willie Mullins as well. It all captures the imagination and if international operators can gain the means to educate their customers on the ins and outs of the sport, they will be on to a winner.

Domestically, it’s about finding the right balance between trading and marketing teams. Consistency is essential in this product offering throughout the week. Single race odds boosts or acquisition offers don’t guarantee you a customer’s wallet for the four days of the festival or even for an entire day. The key is giving customers a choice of races that spreads out the positions more evenly and then helps the operator engage the customer in each race throughout the festival.

How is price latency and odds generation different in horse racing compared to other sports betting activities? What challenges does this present for operators?

Alan Casey: If we take a traditional sport like football, the teamsheets are announced an hour before kick-off and we see the market shifts as a result. Outside of that, there isn’t a lot of other information flowing into the market.

In horse racing however, there is more information in the market and operators are exposed from the minute they put bets up with no set times as to when information will enter the market. Latency issues become far more apparent in horseracing, dealing with large bets can result in loss of margin from a day’s racing. During the final minutes before the off, any latency or speed issue can result in operators being left badly exposed.

With the market constantly flocculating like this, Push APIs that inform operators the instant a price has changed can be invaluable, leaving no time for incorrect pricing on a sportsbook. Mere seconds of inaccurate pricing can be the difference between profit and loss.

Interviews

Making a lasting mark in a new territory

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Making a lasting mark in a new territory
Reading Time: 4 minutes

 

We talk to Michael Bauer, CFO/CGO at Greentube, to discover the key elements to a successful entry into a new market.

What has to be taken into consideration before entering a new market?

Michael Bauer: The first aspect to consider is whether or not our games already have traction in a particular region, this can be in either social casino, or the land-based environment. If we see that this is indeed the case, then the decision-making process is a much easier one as clearly, this is a positive sign as to our potential within that jurisdiction.

Secondly, we have to take into consideration the market itself. How big is it, what is the overall population, how does that break down into demographic groups and what is the average income? All of these questions are pertinent. We also have to look at how the market is shaped by regulation, for example is it reasonable from a taxation perspective and in terms of products and content, or are there any major restrictions in place? All of these factors are in play when we are deciding whether or not a market is attractive to us.

By way of examples, looking at the Czech Republic and German markets, they have heavy restrictions in place on the product. Germany has a €1 limit on stakes and five seconds between spins, while in the Czech Republic, you also have maximum win limits. This can make products less attractive for players and from a supplier perspective an amended product, which is less scalable and attractive.

How important is it to utilise local expertise within a market?

It is usually very important, because markets are all different to one another in certain respects and this means a one-size-fits-all approach cannot be successfully rolled out across multiple jurisdictions. This is true for both suppliers and operators, and arguably even more crucial for the latter. Operators must have a detailed knowledge of local marketing networks, compliance aspects of regulation and local player tastes and preferences. Local expertise is an integral part of the growth journey towards being an important player in a market, there is the potential for an operator to buy their way to success through marketing, but it is a costly approach.

Are the current conditions in Germany an illustration of potential difficulties of entering a new territory?

Germany is the best current example of potential difficulties when entering a new market due to regulation. It is the first regulated market I have seen that has created an environment that is particularly unattractive for players, causing channelisation rates which are only around 20%. In addition, the regulators have struggled to issue licences. As things stand at present, what the regulation is creating does not lead to the desired outcome – the channelisation of the player base into a safe, regulated environment.

Is there an expectation for both operators and suppliers to enter every regulated region?

To a certain extent, yes. Our bigger, global customers are asking us to join them when entering new markets. We experienced this in both Argentina and Ontario, as well as other smaller regions. The issue here is that a market may not necessarily be attractive enough for us as we have too many other opportunities to tackle at the same time. When we are dealing with a smaller jurisdiction, the cost of entry and resources may be better funnelled towards the bigger openings.

Certain operators may seek to launch games on as global a basis, but this is a trend that is becoming less prevalent, which is down to different regulations and operators utilising various platforms in certain regions.

How long does it take to know whether you have been successful in a market? How is that success measured?

When a new region opens up and the regulations in place are crafted carefully, such as in the Netherlands for example, operators who gain a licence are able to ramp up quickly. We have also seen in Switzerland that markets can become very interesting, very quickly. Our measure of success is market share, where we receive feedback from operators on the success of our games. The other aspect is the GGR we are generating in a region and the number of players we are reaching. It may be that a certain jurisdiction has a weak currency, or low local purchasing power, but where there are many people playing our games. Colombia is an example of this, where the currency is not as strong as the European markets we operate in for example but we have a large player base, and can also be regarded as a success. Germany is a less than ideal example, because players are leaving the regulated market, and we cannot supply the black market.

Do you have any particular examples of successful or non-successful market entries?

The starting point of a successful entry for us is usually predicated on being first to market. We achieved that in Switzerland and the Netherlands, where on day one of regulation our games were available to play. In itself, this is a success because it’s normally very tricky to be that fast. Secondly, after a certain time you look at how big your market share is. Switzerland, the Netherlands, Poland and also Norway are good examples here, as we quickly gained market share through the latter with state-owned Monopoly holder Norsk Tipping. You also have high hopes of certain jurisdictions that don’t come to fruition, which despite best intentions and plenty of hard work can be out of our hands due to regulations requiring amendments of games and stakes.

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Interviews

Exclusive Interview: Vivo Gaming’s New CCO Neil Howells

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Exclusive Interview: Vivo Gaming’s New CCO Neil Howells
Reading Time: < 1 minute

 

Neil Howells, the new CCO of the live dealer platform provider Vivo Gaming, speaks about what he hopes to achieve in the role and the latest innovations the company has to offer in the live space.

 

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Gaming

European Gaming meets Gökçe Nur Oguz, CEO and Co-Founder of Playable Factory

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European Gaming meets Gökçe Nur Oguz, CEO and Co-Founder of Playable Factory
Reading Time: 4 minutes

 

Q: Tell us about how & why you came to found Playable Factory?

Over four years ago – when we founded the company – gaming was booming and it still is today. All our friends were working in the sector and we wanted to, too. We were new to it all. Monetization, LTV, CPI… sounded like another language to us but gradually we learnt from our friends and tapped into the scene. As we grew our understanding, we realised playable ads played an important role. If done well, they can add to the experience of gaming. But good ones were frustratingly hard to find. So, along with my co-founders, Berat and Omer, we started making them ourselves and the rest is history.

Q: What were you doing before that/what led to it?

After university, I completed a PhD in Fluid Dynamics, a subdiscipline within physics and engineering. There were a few gamification projects, like building games for people to play that would simultaneously have a background programme running to solve an operational problem. This part had me captivated. Outside of academia, I was always gaming and would gamify everything I did. Not just computer games, but card games, board games etc… So it felt natural to me to do something I enjoyed.

Q: Describe Playable Factory & Gearbox in a nutshell?

Playable Factory is a company that focuses on the creative needs of digital advertisers. The focus is mostly on playable ads and recently on video ads for gaming clients specifically. Our secret (or not so secret) weapon is Gearbox, an online editing and iterating platform for creatives. This is split into two: Gearbox Playable, create your own tailor made playable ads (create, iterate, download and repeat) and Gearbox Video, a tool that allows users to record gameplays easily and create/edit/tweak to their heart’s desire. You can generate hundreds of videos in an automated process with one click.

Q: What kind of support can a gaming developer (or brand marketer) expect from your
platform?

Gearbox is made for people who want to monetize their games. It’s a one-stop shop for advertising and promotional videos. No prior coding knowledge is needed so anyone can use it, which hasn’t really been done to this extent before – with full, fast-response, technical support. It’s like having the full agency experience on one platform. For developers, we provide them with market insights around playable ads, guiding them to the right concept in
a speedy manner. They can get creative with graphic filters, text to speech options, banners… and any feature that improves the performance of the playables or video ads.

Q: Who are your clients?

We work with top mobile game publishers: Zynga, Playtika, Dream, Voodoo, Lion Studios, Gram Games and lots more. Apps publishers like Funimate, Trendyol and Gopuff. And brands include Hasbro, LEGO, Unilever and L’Oréal.

Q: What is unique about the Turkish mobile market/why has it become known as the Silicon
valley of the mobile gaming market?

Turkey’s become a global mobile gaming hub. It’s amazing to watch it take off. Some of the best publishers and developers in the world are based here. I think it’s got a lot to do with the ability for rapid development. You’ll find teams of 4-5 young people making a steady stream of mobile games that they send out into the market. Thanks to home-grown success stories, the eyes of investors have turned towards us. But it’s also down to the culture here. Gaming is hugely popular in Turkey and you can feel the passion and drive among people in the
scene here. Local and global economic forces make international expansion lucrative and it feeds back into making the industry making it even bigger and better – and long may it continue.

Q: Have you always been passionate about gaming? When did you first get into it?

I’ve always liked games: console, board games, mobile games… For me, it’s cracking the puzzle that gets me hooked on a game. In my childhood, my younger sister and I were always inventing our own games. Now, business-wise, my co-founder Berat and I, enjoy gaming together and playing board games in our downtime. We actually got the licence for the hugely popular party game Codenames from Czech Games. Since then, we’ve published two more board games together. This was before we entered mobile gaming.

Q: What’s your favourite mobile game?

It has to be 2048. I like puzzles and numbers 🙂

Q: What’s been the biggest challenge you’ve overcome in your career to date? And greatest
success?

Without a doubt: building a company from scratch on a technology that we learned all by ourselves, with no training. I didn’t know how to build playable ads, I didn’t know anything about HTML5 gaming and coding so finding a good developer and establishing a business was the biggest challenge.

Q: What’s one piece of advice you’d give to start-ups in the gaming industry?

I never truly understood the importance of a team before I started working in gaming. PhDs involve mostly working solo and it misses the team spirit. The pressure is high because the success of your work is always dependent on you, and you alone. The gaming industry is totally different. Success reflects on the team who built the game. I wish I’d known that before joining the industry. So, my advice would be to evaluate your team, and believe in them because that’s the only way to reach success. If you don’t like the people you work with, it’s often much harder for you to fulfil your full potential. When your motivations align with your team’s, you can combine forces and focus to get the success you deserve.

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