SPECIAL REPORT - PART 2
Reasons why operators ditch brands and focus their efforts on a few

The reading of the first part of this SPECIAL REPORT by INFOPLAY on the concentration strategy at the brand level in the online gaming industry, served to learn first-hand 6 paradigmatic cases of this reality. With the examples of GVC Holdings, William Hill, 888, The Kindred Group, Betsson and Flutter, we were able to remember the disappearance of some brands that were relevant for years and we also learned about cases where large operators owned by the same Group coexist in the same market.

In any case, taking into account the most immediate case involving Betsson, which is capable of dispensing with 8 of its brands in the United Kingdom, including the Betsson.com portal itself, we have confirmed that the prevailing reality is that of concentration in few and powerful brands .

Below we review the reasons behind this strategy so different from the one that only dominated five years ago.

1- THE STRATEGICAL APPROACH

First of all, we must talk about the strategic approach that most operators have taken in recent years. Both in the annual results reports and in the interviews and statements of the most important executives in the sector, we can constantly read how this idea of getting rid of brands to concentrate energy in a few pocs and seek excellence has been forged.

So by focusing on regulated markets (something we'll talk about later), most large operators have an annual strategy is to grow their strongest brands in sustainable markets where there are regulatory frameworks that protect customers and provide clarity to customers. To achieve this, effective marketing must focus on a few objectives.


2- FOCUS ON PRESTIGE AND BRAND RECOGNITION

As happened at the beginning of 2020 with the goodbye of Winner and Titanbet from the United Kingdom, the large operators have no problem getting rid of the brands that have been involved in some rumor or scandal of any kind. The most paradigmatic case was how The Stars Group began a process of disintegration of the FullTilt Poker brand after being one of the worst unemployed operators left "Black Friday" in 2011.


The large holding companies in the sector flee from anything that has been peppered with an unclear situation.


3- REGULATED MARKETS VS INSTABILITY

Now more than ever, getting new customers is not based on the strategy of creating numerous brands and saturating the market so that the player finally "falls" on a Group operator. That was possible in the golden age of Google as a channel for the acquisition of online gaming brands in the phase prior to the regulations that have marked this second decade of the 21st century.

Currently, the strategic process to attract recreationalists is to make the customer identify with an attractive, highly promoted brand that generates the greatest possible trust. Hence the huge amounts invested in branding simply to enhance brand recognition. A reality that we have seen very closely in Spain with enormously expensive sponsorships such as Bwin at Real Madrid or 888 at Sevilla CF even before having a regulated market.

Escaping the instability of unregulated markets but also those that increasingly promote more aggressive measures against advertising or at the tax level is also a reality that has shaken the sector in recent years and has caused some operators to lose interest in an expansion in markets that until now were considered very profitable, such as the United Kingdom.

This is the case that explains Betsson's decision to relinquish the licenses of most of its brands in Great Britain due to the inability to deal with the multiple regulatory changes that have been introduced in the local gaming space in recent years, as that required large investments in technology, regulatory compliance and marketing. Betsson acknowledged in this regard that such investments were not sustainable with their current configuration in that market.


4- A BETTER USER EXPERIENCE

Gaming companies focus much of their success on staying at the forefront not only in marketing and advertising but in product development. As in many other areas of entertainment, consumers' lives depend on their user experience.

Faced with the impossibility of prioritizing several brands at the same time while maintaining a level of differentiation and product development, many operators have chosen to constantly innovate and raise the standards that consumers expect from gaming services, but only from one or two brands.


5- COMMUNICATION AND PROMOTIONS

If we have already pointed out the difficulty of many operators to differentiate themselves at the product level and improve the user experience, the communication of promotions and campaigns is also a field in which it is increasingly difficult to comply with the demanding regulatory frameworks regarding sponsorship and advertising. That is why many operators tend to focus their efforts on fewer and fewer brands.



Once a customer joins, backed by sophisticated data insights, statistical modeling, and customer insight, they interact with their customers in a personalized way. And that is achieved by working well in the communication protocols and in the promotional campaigns of each market, something that is difficult to replicate at a multi-brand level.


6- THE SUBSIDIARIES MORE FOCUSED ON DEVELOPMENT

Business diversification in the online gaming industry is not only understood as the process of expanding the segments and areas of entertainment offered to customers. We have seen it with the Covid-19 crisis: where Virtual Sports and casino and slot games have had to replace the non-existent sports betting offer for two months. But large corporations are increasingly choosing to allocate resources not to the creation and development of brands but to having companies that are capable of developing games.

This is the case of 888, which in recent years has already acquired Betbright to have its own platform and each time, acquisitions by large companies in the sector of small and medium-sized video game developers to become suppliers are more common.

The Holdings behind the gaming brands of The Kindred Group (Unibet, MariaCasino), William Hill or 888 prefer to invest more and more in product and SUBSIDIARIES focused on gaming platforms (Kambi, iPoker or their own betting platform respectively) than to do it in new brands.



In short, the current operator and that of the next decade is one that, although it may have different brands well positioned in different verticals and markets, should not necessarily prioritize this form of growth. There is a much more effective approach that is based on an improvement of existing brands while consolidating a communication strategy appropriate to the reality of the market in question while trying to comply with regulatory requirements and customer demands.

That is why we are certainly facing a change of direction, at a time where the growth of the sector based on the multi-brand idea has slowed and the centralization in products and objectives is the great trend in the industry at the brand level.