What are your first concepts and insights regarding the impact the coronavirus pandemic is having on the igaming industry globally? What effects, patterns or trends have you identified so far in that sense?
There are currently some 2.6 billion people on lockdown- that is a third of the global population. This is unprecedented, but thankfully due to the digitalised nature of the online gambling industry, this could be one of the few sectors that will not suffer an economic pinch. In the long term, if we sink into a global recession we could see a negative impact across the industry. In the short term there will be, and already is a big surge in demand for online gambling and casino services. People are at home, running out of things to do and unable to bet on sporting events or in a land-based casino. This combined with the increased prevalence of smartphone technology and high levels of internet connectivity creates a big demand for online casinos and betting platforms.
Of course, some unscrupulous actors are using the pandemic to their advantage in a morally dubious way. We have already seen regulators in the Netherlands and parliamentarians in the UK crackdown on those pushing bad betting options but these do not represent the industry as a whole. Going forward I expect continued growth in the online gaming sector combined with a measured response from regulators in terms of advertising, ethics and implementations of rules. I expect to see increased innovation and development in the industry. More users from a wider demographic means increased demand for different kinds of games, immersive technologies, and better delivery across more platforms. Operators that want to keep up, need to move fast to meet the expectations of their new client base.
What are the main demands or concerns you've been receiving from your customers since the outbreak?
Overall, clients are looking at the further digitisation of their existing services. They are expressing the desire to be able to react to the changing face of the market and to be able to meet their clients' global needs during this uncertain time. We have had many inquiries relating to licensing applications and the incorporation of companies for online gambling. People have also been questioning how best to protect their assets or ensure that their corporate and fiscal structures are structured efficiently. The fear of recession is very real and we are providing measured, level-headed and professional advice on how to prepare and mitigate any potentially negative situations. Right now, that is all we can do.
What are in your opinion the possible scenarios this could bring for that sector, both in the short and the long term?
I am an optimist and while I recognize the devastating impact this pandemic can have on many industries, I believe there are always opportunities to be had. In my view, this pandemic will speed up the inevitable almost-total shift into the digital world of entertainment industries. I see iGaming, blockchain, cryptocurrency, eSports and various other fintech industries in a position where they have great potential to benefit from this change in the way our world is working. Long term, I hope we can avoid recession. I do not know what the future holds but I believe that those who are willing to adapt and be flexible as well as take risks are the ones that will come out on top.
What role is land-based segment shutdown playing? What about sports events cancellation?
The land-based shutdown has been a godsend for existing online gambling providers. As we all know, these land-based casinos have seen a big decline in numbers over the last few years but this could be the final nail in their coffin. Mobile use is up, more people are connected to the internet than ever before and the selection of online games is far more enticing.
You also have to consider the emergence of technologies like VR, AR and AI as well as live dealer games and cryptocurrency gaming- once people experience these from the comfort of their devices, I see little incentive for them to go back to land-based casinos after the pandemic. That said, I think there will always be a place for these conventional casinos but a large percentage of consumers will shift to online alternatives.
In terms of sports betting, there isn’t a direct substitute for this in existence. Yes, customers can bet on other things aside from sporting events but this will only satisfy a small number of users. I do expect to see eSports emerge during the pandemic. An already flourishing sector, betting on it will increase in popularity and I am already fielding inquiries from providers wanting to branch out into it. There will also be those who move away from sports betting and opt for online casino games instead.
What’s the best approach for gaming operators and providers facing this global crisis, to minimize damages and even leverage the shift to online business? What external resources could these companies turn to?
First and foremost, if they do not already have one, it is time to get an online gambling license. We would advise clients to opt for a jurisdiction such as Curacao or Costa Rica so they can get the necessary documents in hand in a short period. We would also advise operators to conduct a review of their corporate structures to make sure revenue is being managed effectively. Generally, we are keeping a calm and level head. We are telling our clients to prepare for a paradigm shift in the way that the gambling industry works and advising them that the online world is where their future lies.
Thankfully we have over two decades of experience in online gambling so helping them make the transition in the most efficient way possible, is second nature to us. Of course, there will be inevitable negative consequences for all businesses as a result of this pandemic, but we believe preparation and innovation can overcome many of them.
What precautions and further actions should be in place in terms of compliance and CSR?
That remains to be seen and much will depend on the response from regulators in each jurisdiction. We are still in the infancy of this pandemic and if predictive models are to be believed, we could see even more of the world being shut down temporarily. This will result in some knock-on effects but it is too early to know what these will be. I am not one to speculate but we are working with our clients already to prepare for worst-case and best-case scenarios.
One thing I will say is that as we see more and more online users flocking to gambling sites, security will need to be tightened. There needs to be increased protection of customers but also more stringent KYC and due diligence processes in place. This kind of situation is ripe for the picking by unscrupulous actors, businesses and consumers must be prepared.
How would you assess the existing resources, approach and measures taken by iGaming jurisdictions such as Malta, Gibraltar, Isle of Man or the UK? Do you see the need for further regulatory actions to be taken?
The jurisdictions you have mentioned already have in place some of the most stringent rules and regulations in the world. I believe in self-regulation as well and I think it would be a mistake for these countries to take things even further. There needs to be a balance struck between responding to the new demands of the industry, providing the service people want, and protecting all stakeholders.
What special measures is Fast Offshore taking as a company?
We pride ourselves on being prepared to assist our clients in any kind of situation- this has not changed. We continue doing what we've done during the last 22 years to assist our clients, listening to their concerns and providing them with advice based on our extensive experience and knowledge within the sector.