he SBC Digital Summit online conference, which runs from 27 April to 1 May 2020, had a panel Monday with four gaming companies executive leaders speaking about “Business continuity in the face of COVID-19”.
Jordan Levin, CEO of SG Digital, moderated the discussion, which kicked off with the first responses to the COVID-19 outbreak. All panelists agreed the first step they took was to secure working from home across their organizations.
Shay Segev, COO at GVC Holdings Group, said the company’s focus was to ensure business continuity, and while the scale of the situation and how it would escalate was not clear for the firm, it put in place a task force to make sure their employees could work from home.
He said retail became much more difficult, and GVC started to look how to make sheet balances stronger, specifically with cash management under a lot of pressure. “So we started strict and detailed reviews on a daily weekly basis in terms of revenues, and we’ve been running this process for the last four or five weeks,” Segev said. The next steps in GVC's approach were to focus on cash management, scenario planning and exit preparations, being the latter what most of the industry’s stakeholders are trying to know what it will be like.
He also noted that because of this uncertainty, communication became very critical, so GVC increased its level of communication through the organization, which he considers another key factor in the company’s response to the crisis.
This concept was shared by Tim Heath, CEO and Co-Founder of Coingaming Group, who said it was important to keep the staff involved about what is going on. His company also enhanced communication with its our marketing and affiliate partners, and has been trying to empathize with the players.
Speaking about the retail segment, Segev said in the UK, Italy and Belgium GVC decided to close all of its retail shops, bringing about a zero-revenue situation: “We decided our priorities were our colleagues’ safety and well-being,” and preserving jobs specially for retail was set as one of the top priorities. The company is now discussing how it will open retail. “Opening will be more challenging than closing,” he said, regarding all the protection measures to implement.
Betsson Group CEO Jesper Svensson said the company’s situation was relatively positive because around 75% of its business even before the outbreak is the casino vertical, and they are almost 98% online. “It has been working out surprisingly well to have all the organization working remotely. I’m really pleased to see the productivity level that we have had. From the production point of view we have been coping up well,” he said.
He said the industry has a responsibility to protect its customers in this time, and added that Betsson is committed to contribute to the local communities where it is operating. “In times like these we do offer entertainment (...), and if it becomes clear that we do this in a healthy way, at the same time that our businesses can remain relatively healthy, we can keep the people working for us, then we are doing something good,” he explained.
In terms of player behavior shifts and innovation strategies in that sense, Heath said they have seen a spike in table tennis, a massive increase in esports, and the company had a change in narrative and marketing to encourage different competitions. Amid the lack of major sports and its impact on sports betting, the firm quickly included table tennis, eFIFA, NBA 2K, and it also developed an e-cricket product.
This spike in esports and table tennis was also noted by Segev, and agreed with Heath that many consumers who tried this product now will continue even after the crisis. Amid an increase in gaming revenues, he sees many more players taking gaming and specifically poker, where he sees a new spike, with volumes going back to many years ago. He also remarked a lot of players spending more time, mostly recreational players.
Segev said this surge also brings a new responsibility for them as operators, in terms of not only offering all of those contents, or being too aggressive trying to promote gaming or casino in general. Hence he said GVC took even further measures in terms of responsible gaming, player protection, via behavioral tracking, restrictive responsible gaming marketing rules, banners for deposit and time limits, among many others.
George Daskalakis, CEO of Stoiximan, said one of the most important elements of this crisis is the switch from retail to online. “Things will not be the same for quite a while when it comes to consumer habits, and we expect this shift to online to become more rapid after the latest developments.”
In that sense, he sees a lot of people coming from retail, and believes some will like it and get used to it, and others will also stay longer because of the restrictions after retail reopening. Another insight he shared is that the company has seen an increase in the average time of every communication with customer services. He also said his company has completely changed its internal communication with its teams.
Both Segev and Svensson referred to M&A processes in the gaming industry facing this crisis, and they agreed there could be some valuation difficulties these days, though the consolidation will continue when there starts to be some clarity. “Probably in the next three to six months we might see some halt or slow down in new M&A. I expect to see it back somewhere in Q4 or Q1 (2021), when we start to see more clarity about the exit from COVID-19,” Segev said.
“Some people won’t want to sell at current levels because they are hoping they will get into stronger position later on. Though there will be some companies that have to sell, which is different,” Svensson said.
By the end of the panel, Heath and Daskalakis agreed that work from home seems to be more productive and that in the future there will be some element of remote work, but they stressed the importance of human interaction in the company’s culture. “We cannot achieve the same things working only from home,” Daskalakis noted. “However, working from home has been a positive side to this crisis. I expect a mix of the past and the present when we work forward in the future.”