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Q&A session with Alpha Affiliates CPO: Navigating key iGaming trends and regulations in 2024

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We’ve sat down with Irina Pisanko, CPO at Alpha Affiliates, and talked about the key iGaming trends and regulations in 2024.

Our Q&A session will help to understand the state of the iGaming industry globally – whether it is affecting economies around the globe and how regulations and trends are affecting it.

How has the iGaming industry evolved globally over the past decade, and what are the key trends driving its growth?

IP: With the development of technology over the past decade, the iGaming industry has experienced pronounced growth. We have seen a shift in users from desktop devices to mobile, especially as 58% of online casino players are users on mobile devices. It is also important to note that cryptocurrency has changed the world and taken significant positions in our business. Almost every online casino now allows deposits in a variety of cryptocurrencies, and there are also separate casinos specializing in crypto, with the currency itself being used in the games.

In addition, it is impossible not to mention that in the early 2000s, operators primarily obtained licenses that allowed them to operate in multiple countries simultaneously. However  many countries, especially in Tier-1, are now introducing their own local regulations, reducing online casinos operating across borders with one license, and therefore, the whole iGaming environment globally has become more regulated.

 

What are the major economic contributions of the iGaming industry, and how does it affect local and national economies?

IP: An increasing number of countries are now adopting local regulations, which means new economic implications. Firstly, there are tax implications. Every operator working in markets with a local license is required to pay taxes. Secondly, upon obtaining a license, the operator needs to establish a company in the operating country, open a bank account, and, accordingly, make a deposit of a significant amount of money. Of course, these factors positively influence the economy, as, otherwise, the taxes would go to the country issuing the license rather than the country where players spend their funds. Countries like Malta, Gibraltar can maintain their economies at a commendable level through tax revenue generated by the gaming industry. Regulation leads to the creation of jobs, thereby contributing to an improved standard of living in the country.

Which countries are currently leading in the iGaming sector, both in terms of market share and technological advancements?

IP: Currently, leading positions in both the iGaming industry and technological advancements are held by countries such as the United Kingdom, the United States, Japan, China, and Australia. These countries have well-developed online gambling and land-based gaming sectors, contributing to the growth of the industry as a whole. During the COVID-19 pandemic, the majority of market players opened their online casinos, not only retaining their player base but also expanding it several times over.

Additionally, these countries were among the first to implement local regulations, thus securing dominant positions in the market. Advertising online casinos with local licenses has become more accessible, providing the opportunity to reach and engage a larger audience.

 

Can you elaborate on the key factors contributing to the success of these leading countries in the iGaming industry?

IP: The development of offline casinos in these countries is likely the biggest contributing factor to their success. People in these nations are accustomed to see online casinos as a form of entertainment rather than a means of earning. The advancement of information technologies has propelled the development of online casinos, eliminating the need to spend time on travel, expenses, and so forth. Now, the casino is in your pocket anytime. This has largely contributed to the rapid growth of online gambling in these countries.

 

How does the iGaming industry influence job creation and employment opportunities in the regions where it operates?

IP: First and foremost, the establishment of local regulations contributes to job creation, as licensees, legal firms, payment companies all require personnel. And, of course, we should not forget about the operators themselves. In one online casino, specialists from various fields such as marketing, development, traffic management, finance, and more can be involved, meaning more jobs need to be filled. Local language support alone creates a significant number of jobs for low-skilled professionals.

Additionally, industry events taking place in different countries provide employment opportunities in the event organizing sector, which inevitably impacts overall employment.

What are the potential future growth areas or untapped markets for the iGaming industry, and how might these affect its global presence?

IP: In my opinion, the new potential markets for the industry include Latin America, Asia, and Africa.

Looking at Latin America, the population in this region is very large, and the overwhelming majority of residents do not have access to offline casinos, making online casinos more accessible to them. The nation has a strong affinity for gambling and enjoys sports betting, bingo, and lotteries.

Asia is one of the most densely populated regions globally. Many countries, such as Thailand, Vietnam, and certain regions of India, are in the discussion stage of regulation. While Japan restricts online gambling, sports betting is highly popular among its residents. In India specifically, the growth of iGaming has become evident with the development of the internet. Among players, sports betting is popular, especially for cricket and the local IPL, as well as live dealer games.

In Africa, the most potential markets are South Africa, Tanzania, Nigeria, and Kenya. The region’s potential lies predominantly in sportsbooks, and with the growth of mobile phones and the internet, online casinos and betting platforms are increasingly entering these markets.

As for growth areas, cryptocurrency casinos are undoubtedly one of them. Cryptocurrency removes restrictions on the movement of funds, and with a high approval rate, it increases the number of players worldwide. Crypto casinos don’t care about the player’s location; what matters is having a way to deposit and a good internet connection.

Another interesting idea, albeit for the distant future, is the transition of online casinos into metaverse universes. There has already been an experiment where a casino was opened in GTA, and it gained overwhelming popularity. After all, our lives are moving increasingly online.

 

Can you discuss the challenges and risks associated with the iGaming industry’s expansion, both from a regulatory and market perspective?

IP: The most significant risk to the development of the iGaming business is the proliferation of so-called “Grey” online casinos. These establishments operate without obtaining a license, and unfortunately, at times, fail to pay out winnings to their customers.

This primarily impacts the reputation of online casinos since users, after encountering such issues, may become hesitant to make deposits in other platforms. This, in turn, can decrease the overall number of online players. Secondly, such casinos evade tax payments, leading to a shortfall in government revenue. Thirdly, these operators might prove to be unscrupulous employers, potentially depriving their employees of their rightful wages.

 

How do advancements in technology, such as blockchain and virtual reality, impact the iGaming industry, and which countries are at the forefront of adopting these innovations?

IP: The future lies in such technologies, significantly simplifying the lives of both players and operators. Cryptocurrency provides us with payment anonymity and a 100% approval rate. As for Virtual Reality and Metaverses, they have the potential to replace offline casinos, offering real interactions and the sensation of being part of an event. However, this is not in the immediate future and more something we can expect further down the line.

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Interviews

From Esports to Emerging Markets: Deep Dive into Sports Betting Trends 24’ with Alexander Kamenetskyi

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From Esports to Emerging Markets: Deep Dive into Sports Betting Trends 24’ with Alexander Kamenetskyi
Reading Time: 3 minutes

 

As each new year begins, there is a growing interest in anticipating the trends that will shape the months ahead. Could you provide insights into the sports betting trends that are expected to be relevant in 2024?

Our SOFTSWISS Sportsbook team has reflected on the past year and observed that the sports betting landscape largely maintains its trajectory, with several key trends that the industry is already familiar with.

Firstly, esports is set to continue its solid rise within sports betting. Over the past few years, esports has steadily climbed the ranks, with games like Counter-Strike gaining significant traction among bettors. With projections indicating a substantial increase in viewership, reaching an estimated 640 million viewers by 2025, according to reports from Newzoo, esports presents a lucrative opportunity for operators to tap into.

Additionally, the dominance of mobile betting is expected to persist, with mobile devices driving the majority of operator gross gaming revenue (GGR). This trend underscores a preference for convenience, particularly in live betting scenarios. That is why we continually enhance our mobile applications and websites to cater to evolving consumer demands.

Also, with the emergence of newly regulated markets, operators are prioritising certification and compliance to ensure the integrity of their offerings. This includes obtaining certifications such as GLI-33 and licences such as MGA, which the SOFTSWISS Sportsbook received last year.

Overall, the sports betting trends in 2024 underscore the importance of adaptability and innovation. Operators must navigate an increasingly dynamic landscape driven by technological advancements and regulatory changes.

 

You have named a few trends that seem relevant for both casinos and betting projects. Does this mean that both types of projects should focus on the same aspects?

Yes and no. While the iGaming market shares common trends like regulations, each area has specific considerations. I would mention one interesting point between sports betting and casino betting. 

Last year, analysing the results of the FIFA World Cup and talking with our partners, I found out that there was a 10–20% drop in online casino betting turnover during this sports event. This shows that even casino-only projects have at least 10% of players interested in sports. In practice, it means that during every major sporting event, a casino will more likely lose a minimum of 10% of its turnover. That does not sound nice. 

That is why adding sports betting opportunities to online casinos would be a great option, especially since it’s now possible to give players a seamless experience. And I am talking not only about the SOFTSWISS Casino Platform. Our Sportsbook can be easily integrated with every casino platform on the market. 

We have cases when casino projects not only opened a sportsbook but also migrated to our sports betting platform. By the way, promoting sportsbooks is much easier than casinos, as sports events help a lot. Also, player conversion in sports betting is many times higher because, in my opinion, it is more socially accepted.

 

What do you mean by seamless experience?

A player simply sees no barriers moving from casino to sportsbook. In most cases, it looks like an additional tab on the website. The most convenient thing is a seamless wallet. Players can use the money they deposited at the casino for their sportsbook activities. 

We make the experience seamless not only for players but also for our partners. Our suite of products offers operators a comprehensive range of solutions, including Affilka, the Casino Platform, the Game Aggregator, the Jackpot Aggregator, and a payment gateway. These products are designed to integrate with each other, creating a cohesive ecosystem.

 

Going back to trends and predictions for this year, which markets would you say are the most promising?

In our market focus, we are looking closely at Latin America, especially Brazil, and Africa, with a specific eye on South Africa and Nigeria. These regions offer exciting growth opportunities, and our strategy is geared towards unlocking their potential to better cater to the unique needs of these markets.

This year, SOFTSWISS has already acquired a majority stake in Turfsport, a leading South African provider of multichannel wagering software for sports, horse racing, and lotto. It helped us officially enter the African market and extend our product portfolio.

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Paving the Way for Regulated iGaming market: Will India See the Rise?

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Paving the Way for Regulated iGaming market: Will India See the Rise?
Reading Time: 4 minutes

 

By Dr Aruna Sharma, Practitioner Development Economist & Retd Secretary GoI

 

Could you provide insights into the current market potential for iGaming in India, and what key challenges do you anticipate the industry facing in the near future?

The popularity of online gaming as a form of entertainment in India has surged with the widespread availability of inexpensive smartphones and affordable internet access. Global investors, developers, and other industry stakeholders are keenly watching the growth story of the Indian online gaming industry which has witnessed a 28% CAGR between FY20-23 and holds a market valuation of ₹16,428 crores.

However, instead of direct contribution in the economic growth story of India the online gaming industry is contributing in terms of increasing revenue (direct and indirect tax) collection (year-on-year). Additionally, the sector has attracted budding tech developers and entrepreneurs by providing them employment opportunities and fueling innovation to keep up with the rising demand for AI and other such immersive gaming experiences.

After some crucial and elucidative changes in the regulatory and taxation policies by the government in 2023, one can hope that 2024 for iGaming will thin the clouds that are shadowing accelerated growth of iGaming in India. 2024 holds promise for iGaming in India. While full regulation may take time, positive court ruling and increased focus on non-RMG segments could cause a casual gaming boom, potentially unlocking a multi-billion dollar market. However, regulatory uncertainty and potentially high tax rates remain a hurdle for attracting investments and interest of other stakeholders in this growing market and industry.

 

What are the main challenges facing Indian iGaming and how different are these challenges within the different regions of India?

  • The government is focusing on reducing threats like false information, mental health problems, money laundering, and financial losses for users by bringing rules and regulations such as the IT Rules, establishing SROs and SRBs.
  • Adequate regulation, that is conducive to doing business, is needed, first of all, to protect the Indian players. Because in the current situation, Indians are being abused by countless nefarious parties. Checking and curbing the illegal gaming platforms and enhancing mechanisms to ensure increased user awareness and behaviour while indulging in online gaming.
  • A pressing concern that requires governments urgent attention is to put in place parameters that differentiate between games of skill and chance for taxation.
  • As a fallout of high and retrospective taxation the industry is facing job losses, advertising and spending cuts and reduced investments in research and innovations.

Additionally, policy and regulatory compliance for the platforms have become increasingly complex with both center and state governments legislating on the same subjects and multiple ministries regulating the industry.

 

Delve into the necessity for a regulatory framework that is both balanced and adaptable.

Unregulated framework where user base is large leads to spread of iGaming in gray market with all its vices. By regulating the iGaming industry, the government can unlock other positive outcomes, such as increased tax revenues, economic growth via attracting more foreign investment, job creation, and better consumer protection. A thorough regulatory framework will enable transparent parameters to distinguish and license the game of skill accordingly and rest will fall under game of chance.

Regulations always bring in transparency and ensure there is no misleading advertising or non-payment of legal taxes. Additionally, regulations such as the IT Amendment Rules, 2023 have ascertained a robust grievance redressal mechanism by setting up of the SRBs and SROs.

Further a balanced and stable regulatory framework could provide assurance and confidence to the international iGaming companies in paying taxes while doing business in a regulated and transparent market, create jobs, and invest in the country and its people. Thus, comprehensive regulations, that are conducive to doing business and protect the Indian players, who are being abused by countless nefarious parties are necessary in the current iGaming landscape.

Consequently, foreign iGaming companies operating legally have consistently demanded that the Indian government establish an adequate and stable regulation and taxation regime. Instead, the government has consistently chosen to unwisely prohibit it, thus pushing this whole industry underground. Furthermore, iGaming companies face unfair persecution and baseless lawsuits from India.

 

The new 28% GST on online gaming has produced divided opinions about the industry’s future in India. How has the industry reacted to it?

Industry initially panicked at the 28% tax, fearing slow growth and reduced investments. The partial relief, clarification on the regulatory compliances have brought cautious optimism. Smaller firms remain anxious, fearing the high rate still discourages players and favors larger businesses. Long-term impact depends on pending Supreme Court judgment on game classification and potential tweaks to the tax structure.

The applicability of a flat 28% tax on the total value of bets placed in online gaming, irrespective of whether they are games of skill or chance has upset the applecart that was moving smoothly with the evolution of agreed principles among SROs and the oversight by SRB with clear distinction of the regulatory body between Games of Skill (permissible games) with that of Games of Chance.

The matter is now being reviewed by a Group of Ministers (GoMs) comprising of officials from ministries such as the Home, Finance, MeitY, etc. to reconsider the GST and how to counter episodes of money laundering and other such scams and frauds.

 

Finally, what can we expect from Indian iGaming as a whole this year, if you were to sum it up in three key points?

It is expected that 2024 will set pace by bringing in clarity in rule making, consistency of rules, inculcating a more stable policy environment that enables India to not miss the bus of becoming a hub for developers. The iGaming industry is expected to tighten its grip for filling the digital divide, enabling learning of cognitive skills and enhance conscious citizen messaging to further tap into the positive side of iGaming.

Additionally, iGaming industry should leverage technologies like blockchain to further the purpose of transparency and tracking of digital payment as a technical solution and for permanent storage of records to curb money laundering. Alongside formulation of regulatory policies, a stricter implementation of policies such as IT Rules (establishing SRBs), mandatory KYC, and compliance with Advertisement Standard Council in India (ASCI) norms for iGaming industry need to be inculcated in ensuring safe and secure gaming platforms.

The future of the gaming industry holds promise of growth, however, there is still a hazard that due to absent market regulation and destructive policies, international iGaming companies shun India, sending an unwelcoming signal to many other potential foreign investors.

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Software is complex and success hard to achieve, Q&A w/ Max Francis Founder of Black Cow Technology

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Software is complex and success hard to achieve, Q&A w/ Max Francis Founder of Black Cow Technology
Reading Time: 5 minutes

 

Online gambling operators continually engage with different software projects but the rate of failure remains incredibly high. This is usually due to time pressures placed on the project. To learn more about software development, and some of the pitfalls operators need to be aware of, we spoke to Max Francis, founder of Black Cow Technology and 25 year veteran of software development. Max also talks about Agile and Rapid Application Development, and how by adopting these approaches, and working with a specialist software developer, operators can hugely increase the chances of success of any software project.

 

What are some of the main challenges operators and suppliers face when it comes to software development?

Software development is about solving a problem and the very nature of this means that we don’t know how long it will take. This is one of the biggest challenges operators and suppliers face when it comes to software projects. They struggle to understand that software development is a creative process and that we are trying to solve a problem we haven’t tackled before and we simply don’t know how long it will take to do this. This doesn’t reconcile with the date-based mentality of most organisations when it comes to deadlines and completion. This often sees projects rushed and hurried to meet an arbitrary deadline and this usually results in the project falling short of the mark or failing completely. It’s much less painful for all involved if there is a universal, upfront understanding that we can never know how long a software project will actually take.

 

What do companies need to consider if they are to complete software projects successfully – on time, on budget and in a way that effectively solves the issue?

Operators and suppliers need to make business commitments of their own and they need to be able to rely on the software provider they are working with on the project. To be able to do that, both sides need to accept the project is going to vary and evolve over time, and that they will have to trade off three crucial dimensions if it is to be delivered successfully:  features, quality and timescales. It is impossible to secure all three and at least one will have to give. So, if a project needs to go live by a certain date, that might be fine, but functionality can’t be fixed for that date. If the project needs certain functionality, then you can’t set timescales. If certain functionality is absolutely required by a certain date then the quality will have to give. Most projects try for all three – features, timescales and quality; and this is why they fail.

 

It seems that being realistic about what can be achieved is key.

It is indeed. When it comes to it, a software development project ends up in one of three places. Good with all the features but not quick; good and quick but not with all the features; or all the features and quick, but not good. The latter approach, perhaps surprisingly, can be useful for prototyping and proof-of-concept projects but care must be taken when developing without quality. All too often, trial projects end up seeping into mainstream production and people wonder why the quality is so poor. In my experience, it’s much better to be realistic about what can actually be achieved rather than trying to run a project with blindly perceived “needs” that just can’t be met. This doesn’t mean scaling back ambitions, it just means understanding the compromises. That said, to be able to predict what can be done, we need to understand and deliver small useful chunks of what we know rather than failing to deliver based on what we want. It’s always best to be realistic, and Agile and Rapid Application Development principles help us to do this.

 

Can you tell us more about Agile and Rapid Application Development principles?

At Black Cow we have the mantra “something useful to someone, sooner”. It’s essentially about partnership-oriented iterative delivery. Satya Nadella of Microsoft put it quite nicely: “set and repeatedly meet short-term goals”. The central idea of any Agile development practice is that we don’t know what we’re going to eventually need, so expect change and collaborate to deliver for the biggest difference to the business now. Think vertical slices rather than layers: do some of it fully rather than lots of it partially. Everything flows much more easily in our projects once our partners understand that it’s ultimately about delivering to their imminent business need. For me, the most important aspect is the partnership – all parties are delivering this project. We’re not trying to ruin your day by telling you that it can’t all be done; we’re trying to help you plan! Choose the compromises before they choose themselves.

 

Can you give a few real-world examples of what these approaches look like?

So, it’s good to have a plan but make every effort to base your plans on what can actually be achieved now rather than what you ultimately want to achieve. Then you need to recognise that plans always change. It’s important to tackle small enough chunks to allow yourself a better chance of success by predictably delivering, then delivering to the imminent business need. And be sensible about what that need is. To determine this, look to solve today’s problems and not the problems you might have tomorrow (unless that is in itself today’s problem). Recognise that there will always be compromises.

Think progress and not perfection. Success comes from delivering as consistently as both sides can manage and seeking to optimise at all times. Adjust the process based on the progress you are making. Don’t believe anyone who tells you they will deliver on time – they are only saying this and can’t guarantee it. This includes the customer providing material to the software developer such as specifications and responses – this is also a form of delivery.

Finally, always treat timescale requirements with suspicion. You must ask if time really is of the essence or whether it is just a desire to get something done as quickly as possible. A real deadline means the project fails completely if it’s missed. This is usually not the case.

 

What do operators and suppliers need to look for in a software development partner? And what should the working relationship between both parties look like?

Working effectively and with the right software provider is mission-critical. The supplier and the customer need to deliver, support and commit to each other. There are no sides here, this is a partnership of equals. It’s a relationship that works best when the customer keeps the supplier focused on the requirements and the supplier keeps the customer focused on what’s technically possible. In this way both parties converge on a solution and are equally committed to the shared goal. “I’m the customer and this is what I want” doesn’t get software delivered. A more intelligent approach is needed.

Software projects are highly complex interactions between several parties with requirements that change on the fly. Projects also continue well after delivery – it’s never about providing a fixed bunch of requirements as a package and then you’re done. That’s why we ensure we take the customer on the journey with us, acting as a true partnership. This is why non-software businesses should engage good software experts for their software projects, allowing both sides to get on with what they do best and allowing the project to succeed.

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