Key takeaways from ICE Totally Gaming 2017

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As the premier event of the European gaming year passes into the rear-view mirror, here are some of what we feel at GamCrowd were the key takeaways from the exhibition and attendant conferences. Part of the show came, of course, from ourselves. First, we put a blockchain session at front and centre of our Pitch ICE sessions – look out for our separate report on that – and second we also gave a taster of our Digital Transformation course as part of the Totally Gaming Academy. Other, though, were also talking about transformation and here is our round-up of the commentary we have seen.

Ralph Topping - talking ‘bout a revolution
The ex-chief executive of William Hill has become something of a must-follow on social media for his often insightful, and certainly contentious, comments on all manner of general, and sometime specific, market developments. It was no surprise, then, that when given the opportunity of the opening session at the ICE VOX conference that he should fire some well-aimed barbs at an industry which, he clearly believes, is in danger of falling behind in terms of tech developments. “I'm a wee bit concerned there’s a bit of complacency creeping into the industry,” he told the assembled audience. “You are seeing people fretting about regulation and compliance. They’re not talking about artificial intelligence; they’re not talking about machine learning; they’re not talking about native apps.” Of course, GamCrowd would counter that by suggesting that we are indeed talking about just these things – it is the premise behind the site to talk all things innovation and indeed next month our newsletter will be dedicated to exploring the potential impact of artificial intelligence on the sector. But generally we take his point. Compliance is, of course, important but the obstacles that can be put in front of the innovators in the sector are indeed fearsome and, particularly for startups, can be hugely expensive to overcome. “It's all about balance, balancing compliance with new technology,” Topping added, suggesting that the pressure on mid-tier companies would become “real” in the next few years. Topping himself is involved in an as-yet unnamed project with a couple of Goldman Sachs executives to build a bot-driven ‘Bloomberg for sports’ and we can’t wait to hear more details. All we heard from Topping was that the new company was “streets ahead of everybody else in the sector.”

The sportsbook of the future
Sticking with innovation in sportsbook provision, another session at the conference featured Heath Cram, director of business development for the Managed Trading Services division of Betradar and Dina Zafirovska, chief executive of BtoBet which was displaying its artificial intelligence-inspired platform at this year’s conference. Cram pointed out the days of manual trading were on their way out, though he added that the industry was still only scraping the surface with the data that was at its disposal. He added that legacy tech at most of the operators remained an issue as the sector strives to add more innovations to its few successes, such as in-play and cash out. “The foundations of any new sportsbook can now be fully automated,” he told the audience on day two at ICE. “Due to models and algorithms, quantitative analysis, and the technology at hand today, the idea of having a large team of people compiling odds is somewhat archaic, and thanks to automation and technology, other areas of risk management, monitoring and supervision will soon also be a thing of the past and become a service that doesn’t need as many bodies in a trading room.” As for looking further ahead, Cram also suggested a new area of interest would be what he called surplus trading. “Data science modelling and historic data has allowed us to remove commercial inflexibility and gone are the days of being limited to fixed fees or revenue shares. Our new model of guaranteeing a margin, on a bet-by-bet basis, allows us now to provide 100% risk-free trading, and in future also allow us to take on bets that operators otherwise wouldn’t want (due to their liability limits), or would otherwise hedge. With our customer base numbers growing, more and more operators are benefitting from being part of a larger aggregated book, and this offering is really challenging the status quo as its relates to legacy trading.”

Morgan Stanley pays a visit to ExCel
Speaking of sports-betting, the analyst team from Morgan Stanley paid a visit to ICE Totally Gaming last week and came away clearly impressed by the number of firms working away in the sector. In particular, they noted how the sports-betting supply sector had seen an increase in the number of firms exhibiting at the show from 40 in 2015 to 180 this year, including sports-betting infrastructure products, risk management and data feeds. The commentary from the Morgan Stanley team will encourage any startups looking at this area. “The numbers suggest barriers to entry in the sports betting industry continue to fall, with many of those suppliers offering full turnkey solutions.”

Gonzo goes VR
Away from sports-betting, Paul Leyland, the analyst at gambling consultancy Regulus Partners lamented the lack of true innovation among the games providers. “The gaming side of the exhibition featured a range of product launches, but little in the way of material innovation,” he said. Indeed, it is notable that the gaming industry has borrowed a trend evident from the film industry of relying on re-treads of old blockbuster’s for much of its new content. Playtech made much of its new deal with DC Comics while NetEnt’s new title announced at the show was a Planet of the Apes-inspired game. However, the latter did suggest it would be launching a VR version of the company’s popular Gonzo’s Quest game later this year, a first for the company.

We have previously noted how the GamCrowd Pitch ICE event featured once again a handful of eSports innovators – four out of the 11 participants – and it was noticeable in the rest of the show the prominence given to the format. Among the large suppliers on display, the aforementioned Sportradar was once again prominent along with Genius Sports, Ultraplay and Vermantia. Much of the discussion within the supply world centres on the potential for offering true in-play capability in eSports, and area that is very much not a ‘gimme’ despite the fact that the games themselves all take place in a digital environment. It was also notable that the week kicked off with the news of the convictions in the FIFA Coin case in the UK, a warning that online gaming developments that disregard the regulatory side run the risk of ploughing into some very choppy waters indeed.

The tech challenges for the industry
Back with Leyland from Regulus, he identified in the wake of the show four “central problems” for the industry when it comes to tech. These include the significant impact the tech revolution is having in consumer goods which will inevitably have an impact on how consumers want to bet and the fact  that the level of R&D going into consumer electronics means the gambling industry is beholden to attempt to piggy-back any trends that appear worthwhile (such as mobile in recent years). As Leyland summarised the dilemma for many in the industry: “Keeping up in a rapidly changing environment is expensive, risky and culturally demanding; however, the price of not keeping up is becoming much greater.” Such is the message that underpins the thinking behind our Digital Transformation course coming up in May; you either get up to speed with technology and run with it or you get run over.