PARTNER EDITORIAL
The use of innovative technologies, such as blockchain and artificial intelligence (AI) could give an edge to start-ups in a very competitive and possibly saturated market. Furthermore, it could make them extremely attractive as acquisitions by larger operators and groups that do not have the appetite to experiment or take unnecessary risks. Although the hype around blockchain has subsided over the past years, many still believe it could be the gateway to one of the most significant evolutions the online gambling industry has witnessed since its inception. Much of the innovation in online gambling that we have seen to date revolves around the channel of distribution, particularly with the move from computers that are tied to the wall to mobile devices. However, blockchain has the power to change the fundamentals of online gambling itself. We are already seeing some top-tier online gambling providers accepting payments in crypto-assets in certain jurisdictions. It will surely not be long until we will see sizeable operators experimenting with gaming systems based entirely or at least partly on blockchain technology. AI on the other hand, has been deployed in the industry for a very long time, usually in the background of online gambling operations. With the insane success of ChatGPT, AI was catapulted into the mainstream. It will not be long until we see more use of AI on the front-end, where it is more visible to users and that will change the customer experience significantly. For the utilisation of these technologies to become more widespread, it stands to reason that we need regulators to support their use. Gaining regulatory support will require creativity on the part of those promoting the new technologies and will not be easy. It will require regulators to be motivated enough to educate themselves and understand the risks associated with such technologies, to be able to address them in their policies and where necessary in the regulations they propose to their respective governments. Think small Another way for start-ups to grow is by focusing on underexploited niches. This could mean targeting particular age groups or focusing on innovative games and new betting markets. Furthermore, there are still some regions that do not regulate online gambling and in which it is not illegal to offer online gambling services without a local licence. These jurisdictions
and regions, allow some breathing space for new operators to test their products and start to build market share. Over the years Malta, the Isle of Man, Gibraltar and Alderney were the main so called “.com” jurisdictions, offering a reputable licensing framework but having a balanced approach which is open to growth and innovation. However, as the market has grown, new “.com” jurisdictions have emerged. Whilst many “.com” jurisdictions provide a useful and necessary service in different regions of the world, we have also seen a number of jurisdictions that do not inspire the same level of confidence. The challenges of accessing banking and payment services has made life difficult for start-ups: more difficult and more risky. Furthermore, a number of software houses have effectively withdrawn their products from these markets. They have stopped providing their services to operators licensed in some of these new jurisdictions because they lack confidence in the compliance requirements of their frameworks. It is vital that start-ups establish themselves in jurisdictions that strike a balance by allowing them to grow while whilst also providing get reasonable access to financial services and the best software available on the market. Success Stories New companies like DraftKings and FanDuel have successfully shaken up the sports betting scene by integrating it with fantasy sports and showcasing how innovation can capture a slice of the market. Stake is another success story that focused on the use of cryptocurrencies while attracting certain age groups that are less attracted to traditional online gambling. Decentral Games and BetConstruct on the other hand, are betting hard on blockchain technology and the metaverse. Only time will tell if these bets pay off. However, as a staunch supporter of innovation, I sincerely hope that these examples pave the way for other giants of our industry to find ways to the harness innovative technologies and innovative business models that keep our industry alive and dynamic. T he Italian Council of Ministers has given its final approval to the draft Legislative Decree “Provisions on the reorganization of the gaming sector, starting with online gaming” (the Decree). With the final approval of the Legislative Decree, the Government is aiming to rationalize and update the online gaming regulatory framework, increase the value of the online concessions to be awarded, and bring them to the highest market standards. The whole online gaming
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IMGL MAGAZINE | APRIL 2024
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