2021 will be a year of increased and stricter regulation in the more mature markets, focus on and growth in the newer markets, and a greater emphasis on entertainment in order to retain the new customers taken on during the pandemic.
- Stricter regulation in the more mature markets. In the UK, following its consultations on online games design and (currently ongoing) remote customer interaction, the Gambling Commission will amend its Licence Conditions & Codes of Practice, perhaps in April. We will see a White Paper for review of the Gambling Act 2005 later in the year but progress is likely to be slowed by the need to deal with issues arising from both the Coronavirus pandemic and Brexit. The enthusiasm of some to prohibit or substantially restrict sponsorship and other advertising by gambling operators in relation to sports is likely to be tempered by sports’ need for funding to counter the effects of the restrictions imposed to limit spread of the Coronavirus. Operators will be encouraged to use all available technologies to meet their regulatory obligations, and there will be good opportunities for tech companies to help the operators comply with the new conditions and codes of practice. The Gambling Commission will stop short of endorsing any particular tech solutions. This picture will be repeated across the mature markets, and the new European markets such as the Netherlands will be subject to similar restrictions from the start.
- Increased focus on and growth in the Americas. The increased cost of compliance in many European markets will encourage operators to focus on opportunities in the US and Latin America, with a number of mergers between established US land-based and entertainment companies and European gambling operators. Caesar’s acquisition of William Hill will be the start of a trend to be played out over the next 12-24 months. Joe Biden has not yet focused much on the online gambling industry but the comments he has made suggest a more favourable environment than under President Trump, perhaps with federal rules on sports betting which would be easier for operators to deal with than a myriad of differing states’ rules, and no expansion of the Wire Act’s ambit.
- Entertainment and the new players. Operators will work hard to retain the new customers acquired during the pandemic restrictions. Many of these new customers come from a background of playing (video) games, and their preferences will accelerate the trend towards a greater focus on entertainment and social media. As pandemic-related restrictions ease and real-world social interaction becomes easier, the focus will shift from rapid release of new games to the quality of those games, but social networking features will continue to be popular and good user experience will be critical. As well as building-in player protections, narrative will be increasingly important in game design. I hope this will mean new opportunities for entrepreneurial games studios. Greater cross-over between games and gaming is likely to result in moves towards further regulation of the (video) games market.
- Enforcement. The Gambling Commission will continue to take action on breaches, to deliver on its stated objectives and also to rebut any suggestion that it lacks teeth and to support its request for an increase in fees to help fund its regulation of an increasingly complex industry. Loot boxes may finally be regulated, as recommended by the 2019 Parliamentary (DCMS) Committee and as pledged in the Conservative party manifesto – but probably not without further debate about which is the most appropriate regulator.
These predictions were previously published in EGR
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