betonliamcasey

Author: betonliamcasey

  • Cashout is at interesting times: Post #G2E.

    I wrote a piece a few weeks ago on cashout.

    I still have to do a final follow up piece on the potential size of a) the cashout market for Operators in the US and b) some of the risks associated with not licensing relevant IP – but post initial article & #G2E, I’ve had some interesting conversations around this space that I thought I’d share.

    Aggregation movement by IP / patent owners.

    This is interesting. A number of sources have indicated to me that there were meetings & conversations during G2E between entities that have various claims on cashout-focused IP.  Not all, mind you, just the ones that have been advised that they have the strongest claims, in particular backed by “first to file” and USPTO prior art filings.

    This is (I understand) a move to consider rolling up of cashout-related IP into a single entity.

    I can see this making sense as it takes an approach of:

    1. strengthening any overall IP portfolio to cover as many cashout related options as possible
    2. allowing a single high profile & experienced law firm to represent all relevant parties under a single entity and
    3. ultimately, make it easier for Operators & software providers to do a deal with an entity that is taking (and this is a direct quote from a source)

    “…a pragmatic & partnership-led approach that we hope will make it simple & clear for people that are using cashout to de-risk any potential IP infringement and clear up any concerns about the wider impact of significant costs, over and above simply licensing cashout relevant IP.”

    My translation of the quote in c) (and it’s just my opinion) – is that there’s deals that could be done probably a lot more cheaply in terms of IP licensing, in advance of both the Operator & Software Provider “wait and see” approach being trumped by “cease & desists” that focus on the wider business benefits that cashout accrues (to those operating cashout).

    The current noise and contractual challenges around the access to, and use of, “official league data”, as well as high profile partnerships – are sucking up much of the Legal & Commercial bandwidth for many of the US-focused Operators & suppliers. If something (eg: a general IP issue, and specifically like Cashout) can be punted further down the road….well, why not?

    So – what do I think is happening?

    Operators are taking a “wait & see” + “let the lawyers deal with it…” approach (to cashout IP claims).

    This is understandable. The current US state by state land grab that’s going on, is eating up time, resources & deal-making bandwidth, like no time since UIGEA dropped. A particular source at a T1 operator told me that “…if it’s not an enterprise media deal, a go to market plan, or a staffing issue – it’s a low priority in the US right now. We’re so stretched in terms of the fear factor around what (we think) we need to spend to get market-share – that that’s the number 1 priority.”

    There has also been questions around the “real” veracity of various claims. The physical cashout of tickets (via machines & terminals) etc is (in some ways) an easier “business method” for both legal teams & operators to both get & understand.

    Where it gets more subjective is when/where the IP claims move into the virtual realm – as a) this is where real differences between the USPTO VS EU treatment of IP is different and b) there is a lot less experience in new (gaming experienced) Legal teams in dealing with the USPTO type treatment of GUI type IP and c) cashout hasn’t taken hold yet in the same way it does in the EU – so defined customer experiences aren’t still 100% clear.

    (I think that there’s a chance that the more dynamic European operators will move on (re: the virtual realm) sooner than others and this will possibly preempt the industry’s current “wait and see” internal counsel approach).

    The US sportsbetting numbers are beating growth expectations & there’s a long way to go.

    Legal Sports Report recently described an “eye-popping” set of numbers out of NJ alone, that included a “hold” of 8.5%. (Hold = revenue or margin from total amount bet).

    The table below is taken from Legal Sports Report.

    Legal Sport Report also recently published an overview of all-state sportsbetting handle (betting turnover) and other financials. Link here.

    This is super-interesting because the September numbers (based on my own experience) give a really good indication as to how the whole Football (NFL) season is going to go for Operators.

    Why? Last two weeks of Aug and first two of September are when customers return, fund their accounts, and start betting NFL again. If you (as an Operator) can grab share of wallet (ie: people choose you to bet with) at the start of the season, and tick hygiene factors around good customer experience and offers – you will keep many of those customers for the whole season….

    NOTE: Numbers below are from June 2018 >> October 10th 2019.

    How do these numbers relate to cashout?

    If cashout takes hold (as people believe it will) in a manner similar to EU penetration, it could be next on the list, past NFL, College Football, March Madness – and then Cashout (4th) in terms of betting volume (handle). There is a belief (but little confirmed hard data) that cashout is the 4th biggest “sport” in sportsbetting in the EU (UK in particular).

    If the numbers above aggregate NFL, March Madness & College Football – and then other sports follow up from a “long-tail” perspective AND assuming that the ability to cashout is included over everything (ie: all sports) – that assumes (using an EU rough comparison) that cashout could (have been, if available) – as much as…a big number guess at best. (Sorry!)

    Without specific sports based granular numbers, and in particular, what parlays (accumulator bets) looked like (in terms of pricing & volume) at any point in time AND without seeing / understanding customer profiling and behaviours – it’s very difficult to get to an educated number as to what the actual volume of handle that cashout could have been out of the 10.7BN wagered (bet) since June 2018.

    If I had to make a guess – that was based on my early-career experience of the North American market + the penetration & popularity of cashout in a mature market in the UK – I’d peg a guess as cashout could have been applied across as much as 1.5 – 1.8BN of the measured volume since June 2018. This may be conservative – this may be way off. It’s a guess, but an educated one.

    The reason that I’m making these guesses is that whilst infringing on cashout IP could be correlated to a number (customers went through an experience cashing out, and the amount cashed out was XXXXX), where it gets murky (and possibly a bit scary for Operators & Software providers) is that cashout tends not to be a simple binary or stand alone action.

    It offers a two-sided marketplace where there are benefits to both parties. (Three sided if you include the volume-based cut of a software provider). The customers gets to lock in a “win” at (in theory) +EV to their original bet OR save a % of a losing bet. The operator gets to lock in guaranteed margin from a bet AND create new betting opportunities that (the cashed out volume) can be used again, against. As a feature – it;s a no-brainer win/win to offer.

    Where it gets even more interesting in the context of cashout IP + any infringement – is how any judicial view is constructed around the wider benefits to a business that is operating cashout – and by extension, generating further enterprise value (for the business) by offering cashout. Does it attract more customers? Do they spend more money? Does it keep customers interested longer? Does it (in simple terms) create more enterprise value by being available?

    In the conversations that I’ve had with those that own cashout IP, one of the takeaways is that “remedy costs” caninclude a calculation based on on the revenues generated (by the feature / the business method / the “thing”) and the value added to the business by infringement use. Value is not necessarily the revenues generated by each individual click (in the case of cashout) but value added as applied to the overall all beneficial impact on the business from infringing.

    The “click-based” experience is where the long-term game around the importance & value of cashout will really be won or lost. Online is where the hockey stick growth by state is expected – and the opportunity cost to those states with online/app access, of scaling online (product) – is far less than physical machines.

    Owning the IP around that online cashout experience is where the most significant battles (and costs) have the potential to be transformative – for both businesses that show/get/license – or own, that IP.

    For example, Colossusbets recently announced a deal to license their patent portfolio to bet365 in the US. bet 365 is a marquee name for any provider to have above the door but (in my opinion) it’s not necessarily clear what specific parts of the proven (EU) cashout sportsbetting experiences the (Colossus) licensing  covers. We’ll have to wait and see.

    Get Out Ahead LLC is another firm claiming cashout IP. My reading is that its primarily offline / machine focused – but does include some interesting online processes under the IP claims.

    For example: (As part of the exchange of %’s of tickets & counter-offers…this is included…) You can see the IP claim here.

    Step 2—Bidder clicks on Counter Offer button and a sliding scale appears. The sliding scale will offer Bidder a range from $600 to $999 (minimum bid is 60% of ticket list price).

    I still find the claims Marketmaker to be the most interesting, even if it’s purely based on a) prior art dates (2007) & the fact that they are b) referenced by the likes of  Winview and others in terms of other patent filings. “First to file” and prior art are the two most significant factors in how the USPTO makes decisions around whether / how someone “owns” a business method of process – and Marketmaker seem to be pretty strong here. The USPTO treatment of business methods (as referenced in previous article) is very different from the EU – and this is why ownership (and patenting) of cashout, is such a potential issue in the US market.

    Finally – one of the most famous US federal court cases, (that’s cited as case law by US IP lawyers) around point of damages assessment – is very interesting as it potentially relates to the wider “remedy” piece that may impact in US-facing sportsbook operators & providers that infringe on any IP.

    The  case related to a sit-on lawn mower machine with patent infringing baffles (underneath) for routing grass quicker (out the back) which effectively made the motor and engine run smoother and more efficiently in heavy wet grass.

    The guys who designed the baffles, sued the lawn–mower machine manufacturer that added (the baffles) without licensing them. The court decided that the value-add (the infringing baffles) was so important to the overall machine’s increased performance, that damages were awarded as a % of the entire revenues from the infringing lawnmower machine company. This is a case that they teach as a basics of IP infringement law in the US.

    This is where the really big impact could be, in terms of impact on those companies that infringe in (sportsbetting) IP in the US. It’s an area that is at early stages. It’s an area that if the relevant companies are relying on a) their experience of the EU market and b) not retained experienced external US IP-focused counsel – and c) don’t think that the different US treatment of IP (and business methods) is going to have any impact on their US businesses – that this will be a saga worth watching from the sidelines.

    Cashout is at interesting times. I’ve said it twice now. I hope that some people are listening. It could very expensive, otherwise.

  • EGR OP ED: Will ‘Stutter’ be Peter Jackson’s next blockbuster?

    @betonliamcasey

    (NOTE: This Op Ed was first published in EGR Intel. I’ve put interesting links & other opinions in from people, at the bottom of this piece).

    (I’m currently available for consulting or interesting work / jobs / projects – focused on Marketing, engagement, structures & culture & general business performance).

    “Deeds will no be less valiant, because they are unpraised.” JRR Tolkien. The Lord of the Rings.

    I loved Peter Jackson’s early work. The scale of the Lord of the Rings was truly epic – but is a Flutter / The Stars Group – a blockbuster too far? Or will US box-office be the new, new thing?

    This is the deal that puts the rest of the industry on the back foot.  The headlines we’re all used to seeing in terms of industry mega deals can summed up by “bigger is better & scale trumps all…”. But IS bigger better? And what happens to culture? I spoke to mid-senior people in both organisations and the general reaction was big picture positive, but followed with a biiiig sigh and observations around “more of the same battles to the death for people & teams.”

    There are some areas that I think are really interesting here.

    DOES SCALE & REACH SUPPORT POSITIVE CULTURE? The merger of (TSG & Flutter) cultures will be both a) fascinating and b) something that will drag on the culture for the next 2 years. Both companies have been there & done that (in terms of mergers) – but it’s the foot-soldiers / middle management that will both bear the brunt of the cuts and have to struggle through whilst “synergies” get negotiated. High level costs & targets will already be known (in terms of synergies / 140M) – but (I know from experience) that Steering Groups will be kicked off / egos will surface & Game of Thrones will have nothing on internal meetings over the next 12 months. Flutter is the boss here. Dublin is now the head office. Dublin has tended to be more of an historical (Full Tilt related) outlier for TSG, and they only introduced a site CEO this year. Scale & reach seems to be the new paradigm for the online gambling industry butthere is a big (unanswered) question – can positive culture or habits be scaled? Particularly in an industry that has struggled with negative newsflow + lots of M&A + uncertainty over the last few years.

    WHO MATTERS IN M&A? NOT THE END-USER: Speaking of Culture, IF “Culture =’s Brand” then this new organisation will be…diffuse. The reality is that 99% of consumers of Stutter brands will have no idea of any corporate change – or won’t care. This is a bigger news story in Ireland, due to Paddy Power’s brand heritage there – than it is in any other territory. The overall brand portfolio now stretches across Paddy Power, Betfair, Adjarabet, Pokerstars, Skybet, Full Tilt, BetEazy, FanDuel, Foxbet – as well as various sub-brands that sit within verticals in the brands. The best brands that I’ve worked on & with are aligned around a common purpose and mission to do XXX for the customer.

    The sheer scale, weight, technical & budget challenges (and overall integration) means that brand alignment & resource allocation will be a power game as to who can get what, based on their ability to navigate the organisational power structures in a way that puts their brand needs highest. My own experience is that when people are a) concerned for their jobs b) having to compete for shared resources and c) having to navigate new relationships and comms structures – that the focus gets taken off the customer. Only time will tell here – but you feel that there are opportunities for more agile, more aligned gambling brands to deliver greater customer focus (and results) in the short to medium term.

    RAFI WILL KILL IT AS COO: I first met Rafi when he was COO of Playtech. He was always viewed as the guy that would give you a straight answer, wouldn’t fuck around – and then deliver what he said he would. He knows gambling & the industry inside out, and there has always been a general feeling that if you were going to pick an industry COO – that he’d be #1.

    This is notin opposition to him being CEO of a large public firm – but a case of Rafi being most comfortable being down in the absolute detail of the days to day, and not having to be the “BIG VISION, BIG MISSION…” sprinkler of fairy dust on a large organisation. Richard Flint is a great example of someone who combined the ability to inspire (teams) internally, and have enough charisma and slickness to put an acceptable face on an industry that is struggling with reputational issues. My gut feeling is that Rafi will be more comfortable with an inward VS outward facing role. He’s one of the good ones. I don’t know Peter Jackson – but he’s already got a board (eg: Gary McCann) that has ‘been there/done that’ in terms of long term growth and debt management.

    I’m fascinated to see how Marketing gets apportioned out on a Group basis. Flutter moved to MD’s that were brand & territory focused. TSG’s (marketing structure) approach has been more vertically focused – both in terms of product & where the customer sits in the lifecycle. There has been a move from a general online POV, to break down the CMO role into complementary, but more technically focused areas. A Group CMO announcement? I wouldn’t be too sure about that.

    MARGIN MATTERS. WILL POKER MATTER? TSG’s debt weight has been a killer. TSG has consistently delivered some of the best margins in the industry, but over the last few years hasn’t been able to touch it – due to the requirement around  positive cashflow. The converse of this is that TSG’s marketing spend has been the lowest of its (industry) peers – as a % of its online revenue. The theory is that less drag of debt, deeper pockets (budgets) and rationalised Marketing overhead (people & partners) will allow an increase in the % of spend VS revenue – that can help drive top line revenues. However – it’s never as simple as this. I know Poker (for example), has tended to be at the bottom of the list of priorities for Flutter – as general category growth has tended to be focused on the Sports & Casino verticals. ‘Stars has always taken the lead in terms of category-widening (for Poker) – but my gut-feeling is that the Group focus may not allow this (for Poker) – and that x-sell will now be #1, 2 & 3 in terms of Poker focus.

    This probably creates even more of an opportunity for Partypoker (& GVC) in terms of building on the real authenticity that it’s built up in the Poker space over the 18 months or so.  Party’s challenge here – is to maintain Poker authenticity, whilst building more holistic and seamless Poker-driven gambling experiences  – for the more “recreational” type of player. Stars Rewards is a beast at doing this – very interested to see if their model and player experience with Stars Rewards gets used on a wider Stutter group basis.

    THE TERRITORY OPPORTUNITY: I think that this is where this deal gets most interesting. Industry people tend to forget that online sports betting is still a) nascent in many territories and b) has tended to be behind online poker in terms of (early) online adoption. Pokerstars was a truly global operator, before Paddy Power (for example) was of any significant size. If you look at the US as a territory – Poker has been the more “acceptable” face of online – and sportsbetting is only catching up. If you look at the territories below – I’d have a belief that Poker as an entry point – is going to be far easier to gain an (initial) toehold and expand from there. It’s where Flutter are probably most looking to growth – outside of the pure US story.

    THE US IS WHAT MATTERS. Fox Sports + Free To Play. Fanduel + Poker. A Pokerstars legacy that goes back to the early ‘Noughties. Even Full Tilt as a secondary brand? Boots on the ground already in key markets. An Exchange in New Jersey. US fantasy sports marketing experts as part of the Management team. There is very little not to like about where this positions Stutter in terms of the overall US opportunity.

    I’m familiar with the people from TSG that are over there. (Less so with the Flutter team). They are some of the smartest guys in the room & highly motivated to succeed. BUT – there is a question now, as part of an even bigger organisation that has an updated vision & mission – as to whether there will be organisational challenges that will slow up what they want to do. Decisions that have already been made in terms of budgets & resource allocations will be picked over again. Flutter will want to have some of Peter Jackson’s men up close & personal with everything that’s going on. Trust will have to be built up – at the same time that a 10 figure marketing spend is marching out the door in the pursuit of market share / land grab.

    There are still some outstanding questions over who owns what IP, that relates to sportsbetting business procesess (eg: cashout) due to how the USPTO treats IP versus the EU. Firms are circling that one, and it could prove expensive. Positive newsflow about the US will the petrol that will drive the engine of the share price here. It’ll be one to watch that’s for sure.

    SPORTBETTING PLATFORM FIGHT TO THE DEATH: Openbet. Skybet. Betstars. Betfair. Migrations. Integrations. Trading teams. Margin. Trying to see the wood for the trees in terms of technology / market fit – is as much of a political game, as it is in terms of the best technology and capability winning. I know that if was Skybet – I’d be concerned that my expertise was complementary to a core Paddy one. I know that the Trading overhead (in terms of headcount) at TSG. was punching well above its weight in terms of markets / scale per trader. Their challenge was market / platform fit due to TSG historically being a Poker business. Stutter have the luxury of choice, but that brings hard decisions around the big picture. Shoe-horning US sports and the required differences in exotics etc – is not an overnight job & that’ll be the focus in terms of core platform market development for the long term. If you have a “one territory, horse-racing focus” your horizons are…limited.

    FINALLY – the industry is a state of flux. Mega deals have become more the norm than not. If it’s a mega deal to simply acquire tech or skillsets (a la Uber, a la Google or Facebook), it makes sense – as those deals increase capabilities that serve the customer. The mega deals in the gambling industry are driven by “synergies, reduced marketing costs because we can scale more efficiently & greater brand access to territories we don’t currently serve…” – and the reality is that – whilst the drivers are real =====- the clear outcomes as a result, unproven, at scale.

    For example, performance marketing is not binary. Just because you own more brands, and have a smaller Marketing dept(s) doesn’t mean that your acquisition costs will go down. You are still competing against your own & competitor brands. Your (corporate) scale doesn’t mean anything to your end-users other than a greater ability to deliver hygiene factors around security and safety.

    New management + revised territory marketing plans, based on new priorities + decisions around technology + integrations + internal politics + lack of clarity around future structures + the challenge of owned or licensed IP (in the US) + responsible gambling focus + regulatory pressure – all at bigger scale – do not suddenly become easier problems to solve, just because you are the biggest. Unfortunately – creating scale, scales your challenges too.

    I’m looking forward to watching how Peter Jackson’s next epic unfolds. It’ll definitely be big box office – but will it be…good?

    I’m available for full-time work or consulting – details here.

    **********************************************************************************

    Other good articles & resources that are linked to this deal:

    Here is the Flutter-Entertainment-plc-and-The-Stars-Group-Inc – corporate-doc that gives an internal >> external rationale of the deal.

    Here is the investor presentation from Flutter – here.

    Here is the link to TSG’s last investor roadshow and set of strategic priorities – here.

    @brettsmiley breaks down greater specifics on Foxbet and Fanduel & the US opportunity – here.

    @gamblinglamb (Alun Bowden) gives his expert analyst take on his four pillars of risk – here.

    @DustinGouker looks at what it means for everyone else in the US – here.

    Here is where I break down the US IP piece that relates to Cashout – here.

  • Cashout is at interesting times: Part 1.

    MAY YOU LIVE IN INTERESTING TIMES is one of those sayings that people get confused by.

    The phrase is actually a misconception and nothing to do with wishing one well. It’s a curse, not a blessing. And the genesis of it, is confusing, at best. More background on it here.

    I can see the same type of confusion around some of the claims & counter-claims related to the genesis, development & rights ownership of sports betting Cashout functionality, particularly as it relates to the fast-growing US sportsbetting market and a generally litigious US commercial and tech IP environment. It’s interesting times.

    This piece focuses on some of the companies that have some sort of cashout offering that is targeting the regulated US sportsbetting market, patent history & what the challenges could be.  I’m going to follow up this piece (Part 2) by trying to dive into the overall numbers to get any sense of the size of the cashout market & what its worth to people.

    But first…

    A recent Twitter conversation flagged a tier 1 CEO (unofficially) saying Cashout is “…the 4th biggest global sport (by betting volume)…” In simple terms, that puts it in the billions (globally) in terms of turnover. That’s a significant number. (Ref: @GuyHardingOC on Twitter, a good industry follow).

    Here are some examples how the likes of Fanduel, Foxbet, are already talking up this “4th biggest sport” to their customers.

    Since the “opening up” in the US sportsbetting market (on a limited state basis) there has been a number of companies (that I’m aware of) – that are specifically focused on the Cashout IP space. Some have claimed “invention”, some have claimed “first to file” and some have claimed nothing generally, but definitely have plans to file claims around the cashout experience.

    Some of these sample companies include Colossus Bets (patents here – first filed Aug, 2013). Get Out Ahead LLC (patents here – first filed Feb 2016). Marketmaker Software Ltd (patents here – first filed April 2007) and some that have more a secondary market cashout focus include Bet Prophet & Prop Swap. Prop Swap is live and Bet Prophet is due in the next few weeks.

    Regarding progress in the US, in particular (because of the different treatment of IP), there have been claims & counter-claims (in particular, on social media) regarding the “invention” of cashout – and this is where it’s worth looking at the differences between the EU patent system, and what’s happened in the US over the last 20 years.

    (An important thing to note is that claiming “invention” has little to no value (in terms of the IP/patent process) VS actually being “first to file” – ie: being on the record with the Patent office as filing a patent and thus (in their eyes) – “inventing” something).

    The internet can get pretty heated in terms of some of these conversations. Regarding the EU (and UK in particular) my own opinion is that anyone can claim “invention” (in particular) for something like Cashout – as there isn’t the same paper trail as there is (now) in relation to the patenting of business method(s) IP for the US. There is varied opinion as to whether the first (obvious) enterprise versions were front-ended by Betfair / Extrabet / bet 365. I don’t know – but lots of people have an opinion on it!

    My interest here – is about where the growth from a US perspective may be.

    ************************

    Some background:

    About 15 years ago, the US Supreme Court (and by proxy the USPTO) made a far-reaching decision in the “Bilski case” that allowed business methods to be patented (a case won by US attorneys Finnegan IP).

    Previously, only physical inventions “for machine or transformation” were allowed (to be patented).

    The European (patent) system doesn’t confer the same weight to business method or UX IP – and thus, methods that may be outside the patent system in Europe, can actually be patented in the US. This has both protected (companies in the US) and resulted in massive investments in overall IP ownership.

    The world’s leading tech innovation companies of the last 50 years are all correlated USPTO IP owners, and include companies like IBM, Google, Apple, Intel, Microsoft and Qualcomm. The US had slipped back in the global rankings for IP, but a new more protective regime has (been) refocused since Trump came to power. We’ve also seen tech-focused household names step into the sportsbetting IP arena with the likes of Microsoft (filed Oct, 2014) & Sony targeting the sportsbetting space, in advance of the legal movement we’ve been seeing.

    The ownership, licensing and aggregation of sportsbetting (and related) IP, is something that’s not particularly familiar to EU operators & firms. So, the standard approach (that I’m aware of) has been to sit back and “let the lawyers deal with it.” Which may not be the smartest approach – given how the US subsequently deals with breaches of IP ownership & remedy.

    The most important element in terms of setting an initial bar (around IP ownership) is “first to file” VS “first to invent”. The reality is that a claim to “invent” something, that also confers ownership of the IP requires an individual (or organisation) to be first to file around the (invented) IP with (in particular) the USPTO. (There was a good recent Twitter example of claim VS counter claim re: cashout ((in the overall betting space)) – butgiven that it (cashout) wouldn’t have been patented in EU – the argument could only really have been resolved via looking at a “first to file” with the USPTO, for the US Market).

    Typically, as far as patent offices are concerned – the person or organisation that files the patent first, is classified as the owner of the monopoly right to exploit. This is where “prior art” is so crucial in the field of patents – and talk of “invention” is cheap VS actually having a verified date and staking a federal claim to inventing a method or process that has been officially recorded.

    A good recent example is the GAN ownership of offline loyalty card linking to online accounts in US casinos (patent awarded Sept ’14). Offline loyalty has existed longer than the online gambling industry – but GAN were smart enough to recognise the power of that technical link between on-property/in-house behaviour, before other organisations got there.

    Brad Allen from EGR – commented on a recent article that looked at this area “”For betting and gaming firms without key patents then, the US system could present major cost barriers in the future.”

    …and this is where Cashout starts to get very interesting.

    Given that we know that there are key differences between patenting business methods and UX’s in the EU (in this case, the Cashout method) VS the US – there no “single source of truth, (ie: first to file evidence) for Cashout in the EU. However, the landscape is different with regard to the evidence in the US.

    There is (current) evidence that suggests that Oddsfutures (Marketmaker Software Ltd) have actually been first to file around the broader business methods (April, 2007) that relate to Cashout IP in the US. Their US patents are also cited as “prior art” by a number of other companies that include: Winview Inc, Colossus Bets, Bspot and Wall Street software provider Trading Technologies International Inc. Marketmaker’s original incarnation was as a betting exchange back in ca. 2007 – so there seems to be historical  direct experience of the design of a sportsbetting product here.

    My understanding is that while it’s possible to claim “invention” of a UX  for a business method or process, it doesn’t really have any validity (in the eyes of the USPTO) if a) you haven’t been first to file (for that “invention” and b) you (or your business) refers to the invention that you claim as “prior art” in any filing (which seems to be the case for Colossus Bets).

    Where I think that this gets really interesting is that my own experience (of large betting & gaming operators) is that when something gets flagged from a potential “legal issue” (in this case, IP) point of view – that it gets passed over to internal legal teams to deal with. Not product or commercial people.

    My own experience also reflects that there can (sometimes) be a disconnect between a legal understanding of what a simple piece of bet functionality is VS or even what a UX or business method is VS how that business method is made real from a product or commercial POV. There can be a disconnect between a legal team’s theoretical understanding of the impact of something VS the “real world” application of the “thing”. In the case of cashout + UX + graphical user interface – this could prove to be a very costly error for firms that don’t join up communications between the product & commercial side of the business & the legal side.

    Colossus Bets have been pretty vocal in terms of claiming significant ownership of the cashout space in the US. My understanding is that they’ve built a portfolio across multiple countries with ca. 12 patents that relate to the US – and ca. 20 on a global basis. My sources tell me that there has been a significant 7 figure investment in getting to this point. Current licences (to third parties) are focused on pools & slots.

    Marketmaker have had much media coverage, in terms of their earlier (ie: first to file) claims around more general sportsbetting / cashout IP. Their historical experience in the Exchange space, is supported by the early filing of cashout specific IP claims. Their (current) approach seems to be less adversarial & more partnership driven, as my sources tell me that their preference is to partner and build on their historical industry experience to develop an IP focused business that works in tandem with industry leaders – that can then strategically align with Operator’s long term sportsbetting plans.

    The challenge for Marketmaker (in my opinion) is bridging the gap between a business that’s active from a sportsbetting market POV (eg: like Colossus) VS being seen as a company that’s currently not developing it’s own solution (eg: Bet Prophet / Colossus) and is attempting a pure “IP focused” play in talks with (US facing) Operators.

    In my own opinion, their (Marketmaker’s) patent portfolio looks the most interesting, in terms of the clearest application against new sportsbetting cashout product in the US – BUT, this application is probably going to mean that Legal depts (in particular) are most likely to try and put it on the “broad application” category (ie: “we think that this mightnot be applicable to cashout in general but we can’t be 100% sure…”) Personally, I see this as different to more niche cashout that relates to pools or slots (a la Colossus).

    Some personal observations:

    Getting a view on what IP owners have done / are doing in terms of enforcement actions of cashout IP, is not easy. My understanding is that yes, some of the companies in the space have commenced initial “cease & desist” actions against those they believe to be infringing.

    I also know that some are taking a longer term view in terms of building the most compelling long-term partnership based vision for the space – and this is where there are still opportunities available for Operators to bridge that disconnect between legal opinion VS future cost of remedy by partnering / licensing the relevant cashout IP – not to mention a number of available tax benefits, with the right structure.

    From my conversations over the last few weeks, my opinion is that Colossus seems to be taking a more aggressive approach (in terms of enforcement) and Marketmaker are taking a lower key approach (at the moment) in terms of pursuing partnerships with the largest T1 operators.

    The secondary market operators are more focused in terms of how they can build a compelling general proposition and worrying about liquidity, acquisition, retention, etc – and may not have really focused on the IP ownership piece yet. In my opinion, that’s an error – and they need to move that on.

    There are some big questions that need to be asked around secondary markets in particular. The likes of Bet Prophet & Prop Swap have significant challenges around a) building enough liquidity to offer enough depth and choice to make their offerings attractive from a consumer POV and b) do they have IP that is defensible? My own experience with Tailorbet showed me that the liquidity (choice) piece, combined with the challenges around building a compelling user experience that both simplifies and informs player choice and experience – are not small.

    Anyone who has ownership of business process IP in the US, that directly reflects the process & user experience of the typical cashout experience that has been so successful in the EU, is only at the beginning of the journey in relation to US sportsbetting claims. Given how the focus (by US-facing Operators) has been about getting on the ground with US companies & brand partnerships andthen getting go 2 market with plans agreed & signed off & in place and the lack of need in the EU to be as focused on the patent & IP requirements – I think that we will only start to see real progress over the coming quarter or two.

    My Operator experience also tells me that if there’s any chance that secondary markets were to have any impact on the volume / margin / customer numbers VS actual direct sportsbetting market operators that both a combination of repricing of cashout models, as well as a defensive push to shore up market share would happen very quickly. We’ll have to wait and see what happens there…

    Finally – for me there are some interesting questions that still need to be explored in terms of the Cashout space?

    For Operators targeting the US & planning to use cashout:

    Given how different the US IP space is VS learned (sportsbetting product) experience in the EU, is there enough focus (by Operators) in terms of a clear understanding of the difference between a historical EU experience VS operating under a new IP paradigm in the US?

    As an Operator, are you comfortable / happy that you are relying purely on an internal Legal opinion in terms of veracity of any IP / patent claims?

    Have you walked / talked through what’s being claimed (not just with Legal but…) with sportsbetting and/or product + UX people too?

    Has there been a financial risk assessment of the impact of remedy (ie: not licensing, pushing ahead and then being found in breach) VS the upfront cost of doing (even a limited term) licensing deal with relevant (claimed IP) owner?

    (OBSERVATION: Companies that have signed multiple US facing deals and are B2B sportsbook suppliers & dependent on revenue share could be strategically exposed to infringement claims (from IP owners).

    This is an interesting area in the US, as with the rush to a) get to market and b) gain market share – there is a question as to the financial exposure of Operators (that are using 3rd party software) to potential (IP) infringement via the offering of Cashout to their end-users.  My own understanding is that the USPTO federal framework can be aggressive in terms of significant “remedy” if a 3rd party is in breach. How comfortable are the decision-makers that their organisation is not exposed to IP infringement claims? This will be very interesting to see who liceneses what over time.

    For secondary market operators:

    How will you build enough liquidity to make end-user experience interesting at scale?

    How do you make the user experience so simple, that a typical recreational market punter can buy/sell ideally more quickly & simply than at a typical bookmaker?

    How do you acquire customers in the first place? Is there a super clear USP as to why the secondary market should be an option in front of the primary market?

    What US facing defensible IP is there that can be patented / owned? Does the secondary market provider know what prior art exists in terms of their offering?

    Finally – I had direct experience of the North American bettor, early in my career. The drivers of value or perceived value, the ability to de-risk (particularly in accumulators) coupled with the Operators’s need to lock in margin, as well as driving overall turnover – mean that, in my opinion, cashout willbe in the top 5 “sports” in the US, over time.

    It’s going to be very interesting to see whether the overall USPTO treatment of IP has as big an impact as I believe it’s going to – particularly where we’ve seen the market share that has been taken by both Operators and software providers (eg: Kambi) in the fast-growing and developing US market.

    There will be winners & losers. Just like every day in sportsbetting. How big will those wins & losses be? Only time will tell.

    (Part 2 to follow with a focus on the numbers).

    Twitter follows that are relevant here:

    Tweets by BradAllenNFL

    Tweets by ColossusBets

    Tweets by GuyHardingOC

    Tweets by betonliamcasey

    Tweets by MarcButterly

    *********************************

    Based in Ireland, I’m available for consulting / advisory projects focused on marketing, leadership, betting & gaming, ecommerce. Contact me here.

  • Everybody has a plan until they get punched in the face.

    “You can’t have everything you want, but you can have the things that really matter to you.” —Marissa Mayer, former president and CEO of Yahoo.

    My career has been really important to me. And I’ve loved what I’ve been doing. But sometimes, to the detriment of the things that really matter. Kind of like punching myself in the face. For no good reason.

    I’ve spent a large part of my career both travelling or being away from my (growing) family. I’ve missed birthdays & days out & sickness and all the ups & downs that go with the greatest adventure of them all – bringing up a family.

    The bulk of my experience has been in an industry that is currently going through seismic changes. Consolidation, large M&A’s, re-organisations and regulators banging at the door, like never before.

    My plan was to leave the Stars Group and move into a Marketing leadership role in a (new to me) large blue-chip organisation. My leaving was accelerated by the business I was helping run, being folded into another part of the (Stars) Group – but the new job was offered, I met the people I’d be working with, plans put in place, and a window of a couple of months before the right structure put in place – to bring me on board. Happy days.

    But sometimes, time off can do funny things.

    For the first time in years, I was at home in Dublin for 7 days a week, taking on my share of the ups & downs and really appreciating the amazing job my wife has done, in doing the toughest job of them all – bringing up healthy, happy, well-balanced kids.

    During this very recent period, the right house, in the right place in Dublin became available. “NO – we won’t buy it because I’m going to be working overseas again, and we need to make other plans…” – was my first reaction. And it was the wrong reaction.

    It was typical of someone who was more focused on their own tunnel vision needs & wants around work & career – and less about making what should be the right long-term decision around the most important job of all. Being the best Dad & husband possible.

    So – fast forward 3 months, we’ve sold one house, bought a new dream house in an area where my kids have already spent more time in old-school, outside water fight, ‘don’t come in until we have to send out a search party’ play – than ever before. I’m at home. We are together. And my wife is….content.

    Me? I feel…brand new. And it’s great.

    Great, because I’ve got clarity in terms of what’s important. Great because my health is good, & great because instead of repeating the same pattern and disappearing out of Ireland again – I’m clear that this is where I want to stay.

    Being brand new sometimes means looking back, and making sure that you understand why you are, where you are.

    The gambling industry has given me a great living, I’ve worked with a lot of people a lot smarter than me, and learnt from them – and its given me the opportunity to travel all around the world. But – it’s currently facing into it’s most challenging period since it’s inception.

    The core challenge is clear – how do you operate a business that that has historically turned a blind eye to unhealthy behaviours that impact negatively on people’s lives? It may be a small % of customers / people – but that small % has historically over-indexed in terms of profits delivered.

    In an earlier part of my life, I had direct lived experience of the challenges of addiction. I’ve seen the damage that it can do – and I’ve seen good people familiar to me, losing a battle against life being unmanageable – and struggling to have the courage (or support) to change the things they could.

    I mention this, because this experience has probably given me a deeper insight into the more human side of the enterprise challenge, that is the online gambling industry attempting to change it’s own historical behaviours and genuinely put in place the right type of (both) internal attitude, and external safeguards – to protect the small % of people that are vulnerable to what the online gambling industry sells.

    The challenge (for the gambling industry) is not about designing & devising high-profile, media friendly, player facing support programs – but a deeper one. In my opinion, it’s about taking a value and human trait that’s been sorely missing – and making it core to every activity.

    The value and trait? Empathy.

    I’m not going to lecture on empathy. People and businesses have to be honest with themselves as to whether it’s a value that’s important to them. It’s difficult to prove or show, as it operates on many different levels – but it’s trait that I think that all businesses (particularly those with a heavy marketing focus) and gambling, in particular – need to ask themselves “is this core to our DNA?”. If not – you’re not putting your customers needs – truly at the heart of what you do.

    Empathy is something that I personally took my eye off the ball with, in terms of my own life – and I’m just working hard to reapply it to what’s important. If you keep it front and centre – you make more of an effort to understand (both) what’s important to other people andyou do your best to serve their needs before your own. For example, for me, if I look at the needs of the most important people around me – it’s about staying close to home, as much as I can – but balancing it with the type of work that gives me purpose and focus – so I can, personally, be happy – and spread that happiness around.

    I’m still a work in progress. I’m still working it all out – but I am proud of the work that I’ve done, with the companies I’ve done it with. I want to use that experience (and empathy) to help other people.

    I’m available for consultancy based out of Dublin, happy to travel but with some limits. Betting, gaming, ecommerce, brand, performance & growth marketing.

    Contact me here.

    Or Whatsapp / call on +353 87 1234 371.

    You get the empathy and experience at no extra charge.

  • Full text of my recent EGR article on the (betting & gaming) industry innovation struggle.

    Innovation – why & what’s next?

    Here is the full text of the recent EGR article that I was approached to write on “The industry innovation struggle…”. This was published in the year end EGR magazine (December Issue – link behind paywall here).

    The industry innovation struggle.

    Why & what’s next?

    1996 was a breakthrough for the betting & gaming industry. We saw both the first recognised online sportsbook (Intertops), and the first online casino (InterCasino). Interestingly – not related. Bingo appeared in late ’96 via Bingo Mania. The first recognised Poker Room product was Planet Poker in ’98.

    It took a leap of faith, investment, risk-taking, and significant innovation to get these products to (initial) market, and as the industry has grown and matured, we’ve seen other vertical additions that have included Virtual Sports, Live Casino, Financials & Lotteries.

    These verticals are between 15 and 20 years old. We’ve seen little that’s been adopted into the mainstream of the channel verticals since these eight.  Sample areas of (attempted) vertical product innovation that have had significant investment included Social Betting (PP + BetDash, 888+Magic888 and apps like BetYou and YouBetMe) and Financial Trading, yet neither of these areas command any significant real estate today on the bulk of mainstream Operators.

    I’ve at on boards & in meetings for companies that have products that they believe may be either “disruptive” or brand new for the betting & gaming industry. The first question from industry incumbents & Operators tends (without fail) to be “who are you live with?” – and if the answer is “no-one yet…” the reply in virtually every case tends to be “…come back to us when you are…”.

    If I look at my betonexperts experience, combined with conversations that I’ve had over the last few weeks and months – there is a consistent level of opinion (from Senior industry people) that the industry is really struggling with obvious innovation.

    Reasons? Primarily, the industry is used to clear & consistent ROI from the “easy money” of incumbent products and the industry has been slow to embrace people from outside the industry. We’ve been choosing people from inside the industry to oversee innovation – and that’s meant that the horizons being explored are potentially too inward-looking.

    Some opinions? William Mace, Head of Innovation for Unibet believes that one of the reasons that the industry has struggled with innovation is because “…the industry has simply taken an offline (betting) experience and simply moved it online…”. Carla Maree Vella, CEO of Optimizer Invest (who have invested in multiple start-ups) believes that “…aligning a gaming company to entertainment formats people are familiar with will be key (to innovation)…”. Ari Lewski, Director of Digital Sports Tech (who’s customisable prop bets product has recently been integrated by Coral) said “…the feedback to us (so far) is that Operators see a large untapped area for player betting as there is a disconnect between demand and supply (of markets)…”.

    From a wider industry perspective overall business innovation has been driven via two key areas. The first is the very public M&A environment that’s been prevalent over the last 2 years or so. The second has been the move whereby we’ve seen the powerful Affiliates move directly into the Operator space.

    The most obvious example of how M&A can drive business innovation is the Paddy Power / Betfair merger. The former Paddy Power CEO, Andy McCue was quoted as saying “…The combined company will have increased capacity to develop new betting products and to distribute them across more than four million active online customers in Europe, the US and Australia.” Having a core fixed odds brand (Paddy Power), combined with an exchange brand (Betfair) allows the combined entity to cover all the bases in terms of the gambling demographic. Without this merger, both companies would have been forced to stretch their core competencies to develop attractive product offerings that stretched far enough to cover both the more casual and/or exchange punter.

    One of the best known (and successful) examples of affiliates moving into the Operator space was the CasinoChoice / Costa Bingo family – which has ultimately morphed into BGO Entertainment.

    The move from owning individual portals, to a group of complementary portals, and then making the leap to monetising players directly – has accelerated significantly in the last 24 months. The affiliates that make the leap may not be innovating in terms of product, but the move sends a message to the larger Operators that customers will go to where the best content is – and it’s this content area that looks like a key battleground in the coming quarters.

    Organic search has historically driven much of the highest value customers, and global SEO is rapidly changing to focus much more heavily on quality content VS more traditional SEO tactics. I expect to see even more strong content driven affiliates moving into the Operator space in the back of this, as well as more acquisitions by Operators (of affiliates with strong content) to drive their own content innovation.

    My own work, research & experience has shown innovation movement in a number of key areas. I’ve already mentioned innovation in content – but I see player betting (performance, head to head markets, etc) also an area that’s easily understood and is a clear fit with current Sports markets. It also has a clear crossover with eSports.

    There are also clear opportunities for Operators to improve overall customer experience by studying how the Social Media giants curate and present content. Give people what they are familiar with from another channel and adapt & improve it for betting & gaming.

    AI trading & risk management via improved managed trading services is also an area that’s grown hugely in the last 12 months, and I believe is the future of trading in the industry.  Keith McDonnell (CEO, KMI gaming) made the point to me recently that “…truly innovative areas like DFS and eSports will always be compared to core revenue generators.” And maybe (in my opinion) it’s partly this attitude of “if we can’t generate similar revenues as fast, from something new, we’re not interested…” that this is where the challenge lies with Operators in terms of changing their thinking.

    Final thought and potentially the biggest challenge? Be prepared to embrace risk and make failure ok. Now – there’s an innovation challenge for the industry.

    Liam Casey consults with betonexperts and helps betting & gaming businesses tackle common challenges & help Senior Management get no bullshit answers when they need them. He’s available on a contract, project or long-term basis.

  • Betting and Gaming industry reaction (and opinion) to the Trump win.

    Trump not online gambling. In a Casino.

    So – what’s the betting & gaming industry’s initial reaction to the news that Donald Trump is the President elect?

    (Like most people – I’ve been consumed by the political media over the last 36 hours – and it got me to me drafting this, early this morning, when a Trump win started to look likely. Will be interesting to look back on this in 12-24 months time).

    • Social media is in meltdown over Trump presidency.
    • Betting exchanges (and pollsters) and me, got it badly wrong (again, post-Brexit).
    • Trump is a businessman that owns Casinos and his been vocal about support of gambling…

    …but what could a Trump presidency actually look like for the legalisation of online gambling in the US?

    3 sections here. 1) My opinion 2) Things that Trump has actually said 3) Some direct quotes this morning from betting & gaming industry people who have given me quotes. (ED NOTE: I will add more industry opinion, as people come directly back to me…)

    First. My opinion.

    1. I think that there will be little to no change in current (US federal) policies – and if there is any change – that it may actually result in a tightening up of current regulation as Trump (personally) looks to shore up revenues at B&M casinos.
    2. The legalisation of online gambling in the US is (interestingly) one of the few issues that unite the far-right (mainly evangelical + big Trump supporters) and the (loony) left (gambling is a social evil and access needs to be curtailed).
    3. Trump is light on policies in general and the general belief is that he’ll leave the operational detail on divisive issues under discussion to the House & Senate. Progress there has continued to be slow, and shows little sign of current deadlock being broken.

    Interestingly – it was reported back in 2011 that Trump was getting into a (minority-owned) online gambling business – and was quoted as saying ““This has to happen because many other countries are doing it and like usual the U.S. is just missing out…It seems inevitable, but with this country you never know if it’s inevitable.”

    …but crucially – the Forbes piece also reported that “…Trump has no plans to move forward without a federal or state regulatory regime in place.”

    Historically – Trump has been pro-gambling in general butcomments have tended to either been a) targeted towards legalisation (or at least. loosening up) of gambling frameworks in states that have B&M Casinos or b) been very general comments around the links between Sports & gambling.

    Two important things to remember.

    a) Sheldon Adelson donated $25M to the Trump campaign. And he’s not keen on online gambling in the US anytime soon.

    b) Trump has some previous around being obstructionist and protectionist around his (gambling) properties VS expansion.

    Here are some of the things that he’s historically said around legalisation of sportsbetting (and gambling, in general):

    • “This has to happen because many other countries are doing it and like usual the U.S. is just missing out. It seems inevitable, but with this country you never know if it’s inevitable.” – Forbes Magazine.
    • “I like sports. I like gambling. The two obviously go hand in hand. And like I’ve said before “Money was never a big motivation for me, except as a way to keep score. The real excitement is playing the game.” If everyone adopted that philosophy we’d all be better off. I like Adam Silver’s new stance on sports gambling. He realizes there’s a lot of money to be made for everyone including the leagues and players and as I’ve said before “if you’re going to be thinking anyways, then think big.” And sports betting can be big. We also need it in New York and New Jersey to help our horse racing tracks and casinos.”
    • We do polls that show that 82% are in favour (of legalising sportsbetting) – Youtube interview
      (On legalised sportbetting) – We have to do it, it’s vital to putting the bookies out of business. – Youtube interview
    • “(I’m) okay with it because it’s happening anyways… whether you have it or you don’t have it, you have it… you understand that better than anybody. It’s all over the place.” Breitbart

    Here are some direct quotes from experienced betting & gaming industry experts – that I’ve been in contact with this morning.

    “When it comes to Trump and the gambling industry, he’s made vocal statements in support of online gaming but I don’t think he’ll push for or against. He’s got trade wars to start….The big issue will be the lame duck Congress and Senate. Will they try to sneak some RAWA type bill through before the inauguration or perhaps the new Attorney General flip flop again on the wire act. I don’t think there will be movement on the federal level but with the Republicans controlling the Congress, the Senate and the Presidency what ever happens good or bad will happen unopposed.” – Bill Beatty – Editor in Chief – CalvinAyre.com

    “If anyone can predict his actions – they are a better gambler than me.” David Sargeant – Innovation Consultant and Startup Incubation at iGaming Ideas

    “I suppose there’s a chance his election might be advantageous for online gaming. Especially if Christie is AG. But Adelson’s influence can’t be discounted.” – Sue Schneider – Partner at iGaming America

    “…to think he will be in favour of online gambling just because he’s owned land based casinos may be a dangerous assumption. Sheldon Adelson owns casinos. He donated $25m to trump by the way. The idea that an openly economically protectionist president will create a land of opportunity for foreign egaming firms is likely a little naive…” – Alun Bowden – Senior Consultant at Eilers & Krejcik Gaming & Contributing Editor, eGaming Review

    “Selfishly, the election results are a disaster for iGaming in the US. Fully expect the NJ, NV and DE industries closed within a year. + DFS?” – Tom Galanis – Director, Tag Media / Co Founder, GameOn Affiliates. (ED NOTE: update from Tom – “Sure. It probably is a tad pessimistic, but I’ll stand by the fact it’s terrible for the industry.”)

    “Pretty sure he’s in Sheldon Adelson’s pocket. But I’m not really up on whether Adelson is against sports betting, or just poker and casino. But hard to see Adelson not being a kingmaker at this stage. He was the big republican bankroller, and owns the only paper in the US to endorse Trump. On the other hand, Chris Christie, who is going to have a big say in policy stuff, was the NJ Governor trying to push legal sports betting through for NJ. so interesting i think.” – Jesse May – Campaign Strategist at Matchbook.com / The Voice of Poker.

    “I think online gambling will be very far down the list of what Trump will be worried about for the next 12 months. Despite being a (former?) casino owner my assumption is he wont be a fan of online gambling as he is a bricks and mortar man.” – Fintan Costello – Founder & Managing Partner at Revenue Engineers.

    So – in conclusion – what will the future hold for a Trump presidency and online gambling?

    • Too early to tell what’s going to happen but…
    • Sheldon Adelson’s bankrolling of the Trump Super PAC points to significant influence (with Trump) from one of the biggest opponents of online gambling and…
    • Trump has been protectionist around shoring up revenues for his own B&M properties – and the perception is that online gambling takes revenue from those…
    • He’s light on policies in general, and the wider market opinion is that he’ll be leaning heavily on experts in the House & Senate to take the lead on more complicated issues (of which online gambling is considered one).
    • However – Chris Christie’s importance to Trump policy-making may open up a shorter near-term opportunity for legalised sportsbetting in New Jersey – which may have a knock-on effect into other states.

    (Liam consults with http://www.betonexperts.com – and advises a range of betting & gaming companies on commercial planning, product innovation & operational strategies.)

  • Ten betting & gaming industry predictions for the next 3+ years.

    I wrote a post nearly 5 years ago that gave some predictions around some of the areas where there would be growth in the betting & gaming industry.

    The summary from 5 years ago?

    • Operators would need to focus on real-time delivery of a data-based customer experience.
    • That there would be a huge focus on Operators focusing on the addition of more & more markets.
    • That “branded” content would be key to the growth in the egaming space.
    • That there would a struggle to harness Social properly.

    I’ll let you, the reader decide if those predictions were on the money or not…comments welcome.

    So – what does the future hold?

    It’d be too easy to predict further super-mergers, or a loosening up of the regulatory regime in the USA, instead I’m going to focus on some more esoteric and/or short / medium & long term outcomes I predict.

    Short-term (12 months):

    • William Hill & Amaya deal to huff & puff for a relatively short period – but ultimately a deal that doesn’t get done. (Too much grey market exposure for WH. Kentucky lawsuit still hanging over Amaya. Technology integration being a barrier.)
    • PokerStars to announce that they are moving to NYX / OpenBet as their core sportsbetting platform.
    • Fortuna Entertainment Group to gobble up market share on the back of their Playtech deal. (Only if they have the in-house capability & experience to execute though…).

    Medium Term (12 – 36 months):

    • Trading floors (and direct trading of sports volume) to be wound down by many online gambling operators and customer volume to be run through managed trading solutions from 3rd parties. {Trading is a) volatile and material to bottom line results b) expensive & requires highly paid trading floors and c) pricing is getting commoditised as Operators compete with a race to the bottom around “Best Price Guaranteed”.} Offerings like 3ET to disrupt the market. (Ed note: I have done some consultancy work for 3ET.)
    • Skybet to IPO. Their recent results are a clear indication of that. And they are owned by a private equity firm (CVC) that will want to cash out.
    • Matchbook.com to emerge from “mid-tier” Exchange status and start to challenge market leaders via industry leading tech & customer experience (Ed note: I have done some consultancy work for Matchbook).
    • Companies that understand the importance of full vertical integration in the online gambling space will start to dominate across regional markets. (Vertical integration = own the traffic via owning affiliates, own the brands that you send the traffic to, own the software & IP that sits behind the brand, own the payment processing.) Optimizer Invest are probably the best example here.
    • Big national brands that have attempted to build regional profit centres around their core brand – will potentially move to more local facing brands. Paddy Power’s experience with Sportsbet is an excellent example. Betsson Group’s multi-brand strategy will pay off in the long term too.

    Long Term (36 months+):

    • Blockchain to directly contribute to regulation in the online gambling space. (Who needs regulators when you’ve got a globally recognised standard of financial record? There’s a good piece that explains it here.)
    • AI & chatbots to start doing much of the heavy-lifting around basic customer interactions in the betting & gaming space – this reducing pretty large cost-bases (and OPEX) from companies. It’ll take at least this long for current technology to transition to these capabilities.

    What do you think about these predictions? On track? Way off beam? What am I missing?

    If you need to know more about me – you can find out here.

  • The importance of Brand Advocates (Infographic)

    Marketers have to realise that in the modern marketing paradigm that they no longer control the conversation.

    At best, marketers have to provide a framework whereby they can curate customer-focused interactions, measure the responses, and then optimise their brands for improved interactions & results.

    One of the most important areas to support has to the development of Brand Advocates.

    And, in my experience – Brand Advocates can be the difference between you understanding what are the parts of your brand proposition that the consumer truly values – VS a weak feedback loop whereby you can be feeling around in the dark to make changes that you may never know (if you are not data-driven enough) how impactful they are.

    I came across this infographic today – and thought it broke this area down well. Some good data there too.

    Brand Advocates infographic

  • Marketing as Science or Art. Which are you?

    Saw this today. Thought it was a good summary of the paradigm shift to data-driven marketing VS the ever-present need for engaging with customers on an emotional level.

    If you don’t have the right blend of both – you need to get working on it fast…

    Marketing-Scientists-vs-Marketing-Artists

  • Marketing attribution: A big problem for online businesses?

    I’ve been thinking about marketing attribution over the last couple of weeks.

    I’ve been talking to a some very interesting companies – and one of the big questions that I’ve been asking them, is how do they break down the online sales process and assign a correct weighting to the channels that contributed to the sale.

    The “sale” could be a sign-up, could be a deposit, or a purchase – basically anything that is core to how you’ve set-up your funnels or goals.

    What’s been interesting is that there still seems to be a real struggle to move away from a simple “last click” metric to a model that assigns a weight to the different online channels that may have significantly contributed to the sale.

    For example, let’s say someone was buying a new coffee-maker. They may Google it first, and end up on a coffee-maker site, browse a little and leave. They then go to another site that is on an ad network that’s retargeting and when they are on that site they are presented with a banner (from one of the coffee sites that they’ve visited), they click on that banner and go back to the coffee site.

    Still haven’t purchased though!

    Often the final step, when the decision process is done – is price comparison, so the coffee-buyer goes to a price comparison site, gets the best price and ends up on the first site again, as it has the product they are looking for at the best price. Now they decide to buy.

    Under the “last click” model – the sale is recorded under the affiliate channel (more costly to the vendor), and when the coffee site owner analyses the sales results, the assumption is that the affiliate channel contributed 100% to the sale – therefore we need to invest in the affiliate channel more.

    However, it’s clear that there were actually a number of different online channels that ultimately contributed to the successful sale. SEO contributed, paid media contributed, as well as the affiliate channel.

    This is where marketing attribution comes in.

    Adobe published an interesting study at the end of 2012 that offered some interesting insights into how companies attitudes and approaches to marketing attribution.

    700 companies surveyed. Only 54% carried out any sort of attribution but of those that did 89% said that it had a positive impact on the business. You can see the report in more detail – here.

    The #1 barrier to being able to implement successfully, seems to be a technical one. Based on my own experience, it’s newer, nimble, tech-savvy firms that have the technical smarts and the know-how to be able to implement marketing attribution better.

    Why?

    Knowledge is less “siloed” than it is in older, larger firms. There is a more holistic approach to data interpretation that older firms are struggling with.

    The single-click model can also hold a lot of sway when it comes to internal politics in companies as the SEO team don’t want to lose success to the Affiliate team who don’t want to lose out to paid media – so people tend to fight for their “last-click” success. This needs to be addressed by Management – and people need to be made aware the it’s all about overall business success – rather than short-term team gains.

    Slingshot SEO did a year long study that analyzed more than 23 million multiple-interaction conversions across 30 domains (including large retailers and service providers) and they concluded that:

    • Organic Search was undervalued by as much as 77.25%
    • Paid Advertising and Referrals were also undervalued in most cases.
    • Direct Visits were overvalued by as much as 81.59%

    Derek Tandgren from Adobe also pointed out that “…Marketers must decide if it’s worth investing the time and resources into using the system, and whether or not it will give them any insight into their business….”

    My approach?

    Cluster & establish baselines: Use the database that you’ve already got to cluster customers into groups. Look for similar patterns of behaviour from the data that you’ve got. Are your lower value customers coming from Paid Media or Search? Use these to formulate baselines of behaviour.

    Regression Testing: When did people STOP doing the behaviour that you were looking for? What was the last action that they did – and what were the last inbound touchpoint. (It’s important to discount outbound marketing here ie: email – as it’s all about the customer’s last experience of you – and less about what push marketing that you’ve done in an attempt to reactivate.)

    Integrate your Analytics: An obvious one, but one that can be a significant challenge to many organisations. CRM analytics need to be linked to Google Analytics that need to be linked to your other metric touchpoints. Ensure offline is accounted for and that your mobile analytics don’t get lost in the mix.

    What tools do I think are good?

    Google Analytics. Optimove. Omniture. comScore Digital Analytix. Qlickview. Find them via Google!

    There’s some good reading out there too on this – it’s worth checking out:

    Some good scholarly articles here.

    Data driven marketing attribution models here.