Online Gambling Industry Outlook for 2010

I wrote this article below in late 2009 and it was published in the IGamingBusiness magazine and distributed at the London Affiliate Conference in January 2010.

Online Gambling Industry Outlook for 2010

Welcome to 2010. Are you ready for some changes in the gaming industry and have you made any plans or strategies? If you are not sure what is in store for the next year you might miss out on some opportunities that are presenting themselves now. I will attempt to give my perspectives and outlook for 2010 based on my research, discussions with affiliates and competitors, and my eight years in the industry.

Computer Users, Habits and Technologies

A few years ago, I bought a MacBook just so I could see what the hype was about and to get inside the heads of some of my future players. Sure enough I have made the switch to Mac and in the last few years Mac has exploded. Keep in mind Windows is still the number one operating system but things are changing very fast; changes you absolutely need to stay on top of.

I can’t really say that these are truly my predictions because they’re based on the predictions and estimates of others, but it’s time to know your players.

Netbook sales will dominate in the next two years and that means Google’s Android operating system is going to become a big player in the operating system market. Ubuntu (Linux) users will steadily climb, along with more Mac converts meaning more competition. Netbooks typically use fewer resources than regular laptops and desktops so this includes graphics. The screens are smaller and while I have seen designers discuss how having a larger page is acceptable since desktop monitors have gone from 15” to 19” very quickly, your netbook users are looking for something different, smaller, compact and, of course, browser based. If you could somehow geo-target if the user is on a netbook, perhaps you want a simplified page that doesn’t use any flash and replace download links with instant play links. Another option would be to make landing pages for users on the Safari browser.

Affiliate Strategies and Planning

Networking

Of all the affiliates I talk to and meet it is a rarity if any of them do any affiliate to affiliate networking. If any affiliate wants to move forward in 2010 I highly recommend you find some affiliates that you can trust and be willing to exchange information.

It seems that most affiliates feel scared about giving away their secrets or sharing their mistakes and failures. When I was an affiliate manager I  watched a lot of affiliates re-invent the wheel.

Some important and beneficial things you can share are:

· how much money you make from each program

· which ones perform best

· your list of things that have failed and succeeded

· last but not least, try to find a mutual benefit you can provide each other

Here is an example: an American affiliate partnering with a European affiliate.

European affiliates usually know a few languages and understands the cultural differences between countries and the marketing differences as well. Americans know their market the best and it’s a large market. This presents a great opportunity to share some skills and knowledge. If American affiliates want to diversify and get a piece of the EU markets it would be best to partner with someone who is from there and lives there. The potential for resource exchanges is worth it, whether you need US English content writers, mods for any language and of course any region and of course translation work. The potential for networking doesn’t stop here, you could trade casino knowledge for poker knowledge or even network with someone from outside the gaming industry; I personally learn a lot from these people.

Implement geo-targeting and browser tracking

You have to ensure you are maximizing your own conversions and traffic. The applications and uses will expand as programmers and companies write more code, landing pages and useful applications. Set up landing pages for your mobile traffic and capitalize on other languages. Target browser programs like Safari and mobile devices and track and target their browser language settings.

Test your programs

Sign up to all the programs you promote as a player and figure out which programs have the best set up and the best emails. It also wouldn’t hurt to try to get another account to deposit with, under your tracking. Not only will you see if the tracking works but more importantly, you want to see what every gaming company is doing to acquire and retain that player. Your new depositing player hasn’t deposited in three weeks, what has your program done for that player? Doing this may be a small violation of the terms and conditions but do it discreetly and just for yourself to do some testing. This is one great method for determining which gaming company is going to give you the best ROI for your traffic and might be a better method than sending traffic then waiting for results.

CPA versus Revenue Share

Always a hot topic: CPA versus Revenue Share. In theory, affiliates would make the most money on revenue share but I see some top affiliates opt for some CPA deals to mix up their revenue sources. The pros of adding some CPA deals instead of just being completely revenue share are that you are locking up the income from your players regardless of whether that gaming site stays in business or not. This is especially true for new casinos where you’re unsure of whether they are backed by money, experience, or both. Sometimes it’s a gamble to take revenue share especially if it is a new software type or a new casino group. For the gaming programs that have the highest player values, you should stick to revenue share. If you are not so confident about the player values then switch your new players to a CPA plan that will give you a better value.

Search Engines

Where do I start? Search engines will evolve and hopefully for the better. Google’s caffeine update seems to have tossed the results for everyone. I believe part of this reason is that Google was tired of giving higher rankings to people who knew the SEO game well but were not making an effort to give good content. That is these people would buy domains that look like www.keyword1-keyword2-keyword3.com and throw up some content, follow the rules and rank well for those keywords. I think Google’s way of deterring this is going to be done by giving more weight to your rankings based on the age of your site and content. Remember, content is king!

Google will still own the market but as Microsoft spends more money on Bing, expect a little bit more competition. I think too many affiliates spend all their time on Google results but I think it’s time to look at how you rank on Yahoo!, Bing and to stay on top of news on search engines.

Predictions & Recommendations

New sites that are focused heavily on keywords are going to have a harder time achieving fast and top rankings. I would recommend if you have 50 domains that are not doing anything to load it with some content and let it sit. At least the domains will gain value over time and age like a fine wine, plus you might make some money.

Mobile Gaming

It was written that mobile gaming would eventually take over the market and be worth more than the regular online gaming industry itself. According to many articles written years ago, this should have happened by now but it is still a small slice of the industry. It doesn’t mean you should ignore it and you need to try it yourself to find out why it has taken longer than expected to take off.

Mobile gaming has the biggest potential for sportsbetting, next would be casino and bingo with poker being last. With sports bettors they could easily place a wager on their phone with little time involved especially if they are at the bar watching the game or even if they are at the game itself. It’s tough to concentrate on playing slots with a mobile phone especially when the graphics are good but not great. Poker is just even more tedious as it requires more concentration and it’s tougher to play even while in transit. You can’t afford to lose a connection during a game while with sports and casino products, it won’t matter.

My prediction: mobile sportsbetting will pick up in the next two years and become an industry worth making note of. Casino and bingo products will appear but they would never be considered as primary income, just something to increase player values and to make use of mobile traffic.

Poker is best meant to play for free if you are going to play on a mobile device. My recommendations for affiliates are to implement geo-targeting/geo-tracking on your affiliate sites and make a special mobile page for your visitors who are visiting your site via a handset.

Emerging Markets

It is important to understand the trends and predictions before they happen. There are plenty of articles available for you to stay on top of these trends. The trends I think are worth noting are the improvements in mobile phones and services, the explosion of netbooks and some trends on Internet usage. The two areas set for a large increase in Internet connectivity and usage are South America and Asia.

Netbooks, I have mentioned many times, will help regions like South America, Africa and Asia become more connected. There is room for increased usage in Europe while North America is saturated in comparison. Countries with room for improvement are Spain, Italy and Russia. Eastern Europe is on average less connected than Western Europe but netbooks will help change things for everyone.

Netbooks will explode in popularity around the world due to the low costs. Developed countries will buy them because they are cheap but very convenient for traveling or short trips. I think netbooks will also enable the baby boomers to get more connected online than they ever have been. In developing countries, these devices will flourish because they are more affordable than any other computer before it. This is why I think markets like China and Brazil are going to open up fast.

Legal Perspectives

IANAL (I Am Not A Lawyer) so take what I have to say with a grain of salt and maybe hire a lawyer if you need one. I don’t predict too much activity on the legal front especially with the laws in the US. I do see the marketing opening up in the near future but not in 2010. The UIEGA was passed in 2006 and over three years later, many aspects of those laws haven’t been implemented. If this law is going to be overturned I think it will take as much time again. I expect 2010 to continue without problems but always expect the unexpected. I am hearing a lot of companies that had left the US market are making their plans to return, so that when the US market does open up, they will be fully ready with their campaigns. Those gaming companies are making plans… are you?

Recession and the Economy

As the word ‘recession’ was being unnecessarily blasted in the media for over a year, the discussion came about that iGaming was immune from any dent in the economy. Well I was hoping that was true but I think all of us should be a bit realistic. If unemployment rates rise by five percent in the US, that’s a lot of money that people don’t have to spend on gambling. I think the interpretation at the start should have been that iGaming won’t crash but will do better than most industries.

Predictions

It will take two to three years before the world markets pick up again but by the time that happens people’s habits will have changed. Save your money when you can but by no means cut back on everything. There are more opportunities for hiring new employees, real estate and, of course, electronics. Expect netbook sales to skyrocket in 2010. Remember, history tends to repeat itself so learn your lessons from this period, diversify your business where appropriate and always have a plan B. Waste not, want more!

Industry Trends

I think 2010 is still going to be a year of growth for the gaming industry but not on the same as pace before the recession hit. The overall online gaming markets still have a long way to go which is promising for everyone in the industry. There still exists a large population around the world that does not believe online gambling is real. As more of their friends play online and with increased exposure in the media, more people will believe that it’s real and will start playing. It might just take more TV commercials and more football/soccer sponsored teams to prove it is not only legitimate but here to stay.

Sportsbetting

Expect a few more sportsbooks to come into the market and add a more competitive edge. Mobile betting on sports will grow and I predict 2010 will be the year that players will use their phones to place bets. I expect some of the World Cup 2010 campaigns to push these features on players.

Poker

The only trend I can spot in poker at the moment is based on the news that Bodog is creating its own poker network. If any new poker sites are going to launch they will almost have to launch it on an existing network. I think poker has the potential to grow in markets like Brazil and China. Is is currently taking off in countries like France and Spain.

Casino

The casino business is already very competitive and I initially thought this would be a great advantage for casino affiliates but there are pros and cons. There are going to be many more casinos being launched in 2010. Just when I thought the market was fully saturated, more casinos are starting to appear. I hear Top Game is launching a raft of casinos and RivalPowered casinos are springing up quickly as well. The pros for affiliates are that you have more selection and casinos will fight more for your business. The cons are that some casinos might not survive if they are not well funded or don’t have the experience to grow and stay in business. Perhaps this is a chance to take my previous advice and try these programs on a CPA basis.

Bingo

The bingo affiliates are telling me this market is treating them very well (maybe they didn’t want me to pass that onto you). Bingo players seem to be loyal with player values being generous due to loyalty and the use of instant games included in the bingo platforms such as scratch cards and slots. This market is definitely underrated when compared to other gaming products and another reason worth getting involved with.

May you all have a prosperous year in 2010 – and a bit of luck doesn’t hurt either.