COVID-19 – A WAKE-UP CALL

I wrote a blog “Digitalization of Lottery Business” two months ago. I will now continue with the same theme and this blog will partly be the same than that previous one. I believe on principle “Repetition is the mother of learning”. I got the impulse for this one from the virtual SBC Digital Summit event where I participated in panel discussion last week. I discussed with Steen Madsen (A Game Above), Stuart Godfree (Mkodo) and Chris Armes (GiG) about mobile and digital opportunities for lotteries. I have thought that issues a lot during last few days and believe that we could help operators, lotteries and the other ones, who would like to develop their offering and service in that area.

It is already now obvious that Covid-19 has changed our lives. It has been amazing how fast that changed has happened. Unfortunately, it has not been good changes, but I would say that it hasn’t been totally bad either. Of course, I’m not talking about the number of dead or sick people, but how we have changed our habits to buy things and spend our free time. That “damn virus” has also showed to companies that there should be agile ways to change business strategies and plans very quickly. Those companies who have managed to do that, have better possibilities to stay alive during that crisis and after that.

Covid-19 has shown one big weakness from gambling business which is mainly problem for casinos and lotteries. That weakness is to big role of retail business and the lack of digital online business. It’s not good solution if you have “all your eggs in the same basket”. We have the best/worst examples of that in Las Vegas where casinos have been closed now some weeks and most of them have just minor online business going on or in many cases not at all online business. That has meant 95 – 100 % lost of sales and profits have changed to losses. Too many lotteries have faced similar problem. When places where you are used to sell your lottery tickets are not allowed to be open, you don’t have any places where you could get sales if you don’t have online/digital channel. There are examples where big lotteries have been forced to stop whole operations when they haven’t had online sales at all, or the share of that business has been too small.

The other example of “all eggs in the same basket” problem is sports betting. Those operators who have had just sports betting business without any other gambling verticals have faced extremely big problems. If you have offered only sports betting and there are no sports events going on, what else you could do than stop your operations? Those sports betting operators who have had for example virtual sports and/or online casino games in their product portfolio have had possibility to continue their businesses.

I said in panel discussion last week that hopefully Covid-19 is the wake-up for lotteries. Actually it should be wake-up call also for some other gambling operators too! It is not useful to say that lotteries should understand the need of change already many years ago. It is better to concentrate on the future and how they could make things better. As a skeptic guy, I‘m not sure how many of them are willing to change and how fast they are ready to do it. The time for action is NOW not sometimes in the future!

There are many things what gambling operators should have learnt from the crisis we have faces during last 2 -3 month. Companies should have adaptive strategy which means capability to react on big changes fast. They should also have capability to move changes in strategy to business plans and further to operational level as quickly as possible but in the way which their organization and customers will understand. The main problems in that area are slow processes, the fear of change and the lack of communication with employees and customers.

There are at least four areas where the most of lotteries should make improvements. Those area are digitalization, customer centric operations, products & services, and technology. All those areas would be worth of own blog, but I try to explain the main changes now shortly.

Although retail is really important part of lottery business, lotteries should have digital business too. Lotteries should understand that online sale is not against retail business but rather will support that. The next step for more developed lotteries will be omni-channel solution where retail and online will establish “one package” and work as a one sale channel. We have noticed that it is easier to offer services for customers in digital channels than in traditional retail network. But it would be possible to offer those supporting services and new kind of products also in retail network if companies could utilize digitalization in all channels, not only in online channel. Lotteries should start digitalization immediately if they haven’t done that yet.

Lotteries should have capability to serve their customers whenever and wherever they are willing to buy products. It is old fashioned way to think that good product would be enough to get customers and sales. Companies should understand and admit that customers are kings and queens and they will decide what, when and where they are going to buy. We should understand more about our customers and data is one important part of that. Lotteries should put more resources on data utilization and automatization. I’m sure that it would bring them more satisfied customers and better business.

I already wrote about “all eggs in the same basket” dilemma. Gambling companies should have wider product portfolio than the most of them have at the moment. That is big problem for lotteries mainly. There are still plenty of lotteries who are offering just basic lottery products like Lotto and scratch cards. There might be legal reasons for that, but I would say that in many cases those legal and regulative problems are just too easy explanations. I don’t believe that it would be impossible to add for example horse and sport betting to product portfolio. From business risk management point of view it is better to have wider product portfolio than limited one.

I have always seen technology as a tool for business. I must admit that it is extremely important tool which allows you to develop your business. Gambling operators should have as modern and agile technology solutions as possible. Companies should have as fast time to market time as possible and technology is the most important element there. I think that one big challenge in that area for lotteries is unwillingness to make changes to technology which they are used to use. The most of lotteries are used to buy everything from same technology supplier and that would block the possibility for change and opportunity to use the best solutions in different areas.

Lotteries should be more ready to take more risks, controlled ones of course. I’m extremely keen on helping lotteries, and other gambling operators, if they would like to start to change their business now. The game is not over, but Covid-19 has showed that time for change is now!

MY NEW BUSINESS LIFE

This blog will be quite personal and commercial one. I’m going to tell something about my business future and would like to hear what you think about my/our plans.

As you might have read, I resigned from Veikkaus two months ago and now I’m officially out from there and it’s time to do something else. I have started today new consulting company together with my friend Reijo Anttila and would like to give some information about our plans. Our timing is not at all perfect “thanks” to Covid-19, but we believe on our ideas and expertise and trust that there will be request for our service soon or later anyhow.

We have established consulting and development company called The Finnish Gambling Consultants which will concentrate on gambling related operations globally. We are targeting international gambling operators and suppliers. Me and Reijo (also from Veikkaus) own that company together. Both of us have worked 20+ years in the Finnish gambling operators in many different high positions and have got lots of knowledge about successful gambling business.

We have managed to make non-exclusive partnerships with five excellent professionals who will give us more resources and expertise if needed. I guess that you have heard names Philippe Vlaemminck, David Sargeant, Christian Kalb, Robin Bowler and Mark Knighton before. We have also informal network of esports experts which we could utilize if there would be need for esports consulting. It’s possible that there will be few more partnerships quite soon.

We have recognized our focus areas. There could be even more of them, but we have decided to concentrate on these six areas mainly.

Digitalization of gambling business. We have both over 20 years’ experience about that. I was responsible for online business when Veikkaus introduced that as the first lottery in late 1996. Reijo led the project when horse betting company Fintoto did the same some years later. We believe that we could help companies as well in strategic planning’s as at the executive level. During that special Covid-19 pandemic time it has been easy to notice that some companies, mainly lotteries, should be much more active in digital business.

New gambling verticals. We could help gambling companies, including lotteries, if they want to introduce new gaming vertical to their product portfolio or establish gambling business for the first time. We could help customers to find the most tempting products for their customer segments. We have recent experience from that when we were involved in the merger process of three gambling companies here in Finland. Nowadays all gambling verticals (lottery, casino, sports betting) are in the same company.

Improvement of existing business. We can help companies to make analysis of existing situation and give proposal of potential improvement areas. We could also help them in the decision-making process and further execution of that plan. We are used to make lots of analysis in our works and managed to get good results from that work.

Horse and sports betting. Our deepest experience is from horse and sports betting sector and we could offer new business and products ideas for that business sector. I’m sure that give lots of help for example to the lotteries who would like to introduce sports betting to their product portfolio. The other special knowledge we have from that area is pool-based games which are popular ones here in Nordic countries.

Utilization of data. We have worked many years with customer and product data and are able to help companies to create customer-oriented business models. We know gambling specific features about data and measurements. We believe that same models with local tunings work well around the globe and that’s why we would be able to help all kind of gambling companies globally in that area.

Strategy work. We could help companies to plan the strategy work of the company or the specific business division. We have done that many times in Veikkaus and Fintoto and could utilize that knowledge for sure. We could also provide content for that work if needed. Especially in that area we have excellent partnership network!

We are not going to concentrate only on consulting business although it will be big part of our business. The remarkably interesting area will be our own development & innovation. I would describe that as the seventh area.

New business models. We are doing the development of new business models for gambling operators by ourselves and are ready to make revenue shared business contracts about those models with operators. I’m excited about that area! I’m sure that we have and shall have excellent new business ideas and hopefully we’ll find out companies who would like to utilize those ideas.

You could find out more information about the company and us from our internet site: www.finnishgc.fi . You could send me your comments about our business plan/focus areas to my new email address jari.vahanen@finnishgc.fi . You could use the same email if you would start cooperation discussion with us too.

Marketing of gambling (products)

I just spent long football weekend together with my former colleagues Antti, Erkko and Mika with whom we took care of marketing of sports and horse betting business in ”good old days” here in Finland. We used to have real funny time at the office and we managed to make excellent marketing campaigns. I believe that quite many middle-aged sports fans still remember our ”Maailma on erilainen vakioveikkaajan silmin”-campaign (you could find those Football Pools themed ads with Google or from YouTube…). We didn’t only toot our own horn but also tried to find out ideas for gambling marketing. It’s not easy task at all, but we had interesting discussion about that.

Gambling has always been ”dangerous” business, almost like alcohol and tobacco. Now attitudes against gambling have become even more negative due increase and awaremess of gambling problems. That has effected on marketing and communication a lot. Many countries have lots of restrictions for marketing of gambling products. Italy decided to have total marketing ban of all gambling products. There are similar rules for all gambling verticals like casino, sports betting and lottery. It seems that some countries might follow the example of Italy.

Veikkaus has still possibility to use marketing as a tool to promote its business in Finland. Gambling products have been divided to ”green” and ”red” games. Veikkaus is allowed to have marketing campaigns about ”green” games (for example lottery, football pools and scratch cards) which are not so dangerous ones. It’s not possible to have marketing campaigns of ”red” games (casino games, sports betting, horse betting etc.), but it’s allowed to give product information about those games and sometimes it’s difficult to explain the difference between marketing and product information.

It’s good that people understand better the risks of gambling and are aware of gambling problems. I think that regulator should set up guidelines for gambling operators and supervise those rules. Marketing should be one part of those guidelines (rules). I don’t believe that total ban of gambling marketing would be the best solution. The better one would be something like we have in alcohol business where companies are allowed to market ”not so dangerous” products but not at all those heavy ones.

I have said many times before that companies should know and understand their customers as well as possible. That’s the key issue also in marketing. If you know your customers’ main motivations for gambling, you could make better marketing for them. It’s totally different what kind of messages you should give for ”jackpot dreamers” than for people who is looking for entertainment. It’s another question should it be possible to market those entertaining casino games at all…

Sport is the most important reason for gambling for big group of customers. Of course some of them are dreaming to get big money from sports games and some of them are looking for entertainment by watching sports, but I would say that sport is specific reason to play money games. There are at least two quite separate groups inside sports betting customers. Sports punters are keen on gambling and they are trying to utilize their knowledge of sports to earn money. I think that there is no need to have any marketing actions for that group. The other group is much bigger one and it’s sports fans. For them sports at itself is more important than gambling, which is just ”extra feature” to get more excitement from sports.

What kind of marketing we should do for those sports fans? I don’t like ”buy now”- or ”win 1M€”-style marketing adds and especially in sports games area they are ineffective ones. If you would like to reach sports fans, you should concentrate on sports and try to offer them chance for insight. I think that me and my friends managed to do that in ”good old days” when we published for example ad which was copy of famous painting God’s Hand by Michelangelo and we added blue&white stripes and number 10 to that arm. It’s important that customer would get good feeling when he/she is watching those ads. You should also try to offer that same feeling when they are playing your games. If you manage to do that, you could have good but responsible gambling business.

We discussed also about the possibilities of social media, digital channel and retail network, but those ideas will be the theme of my next blog…

CONSOLIDATION OF GAMBLING BUSINESS

I’m used to say that I’m working in lottery business and/or in sports betting business. After our big merger I have used gambling business which includes also casino business. I have noticed that quite many lottery experts use word “gaming” instead of “gambling” but to me gaming is mainly casual and social games – not real money games which we are offering. I know that the reputation of word “gaming” is much softer than “gambling” but that’s not the core issue.

In which business we are working? That’s still relevant question! But the reason for that is not those words gaming and gambling. It’s important question because we have to know what our core business is, and we should know who our competitors are. We are used to think that other gambling companies are those competitors and they still are, but nowadays there are many other companies too. I would say that we are part of the entertainment business! That has been obvious for physical casinos already long time, but I’m not sure about lotteries and sports & horse betting companies.

I have said this many time before but I say it again: the most important feature for success is to understand your customers and their needs! You could serve them much better if you know their real motivations for buying your games. That motivation is not always the same and could vary from time to time. I believe that the main motivations for gambling are dreaming, spending free time and following sports.

We have already noticed that some quite big companies which are used to operate in other businesses have entered to gambling business. The first change happened when gambling technology suppliers moved to operation side. Those companies were used to operate games on behalf of lottery operators for example in US market. Probably technology suppliers noticed that there were bigger profit opportunities available if they have gambling licenses by themselves. Anyhow they have managed to get gambling licenses from some countries, but at the same time they are still taking care of their core business and selling tech for gambling companies. So, those companies have moved to gambling business but haven’t left their original business. That has caused slightly difficult situation for gambling companies when their technology partner is their potential competitors.

As I already said, we are competing in the entertainment market and traditional entertainment companies have realized that too. I know that big media companies are considering how they should react on gambling business. Especially the opening of sports betting in US has put more speed on that kind of analyzes. I wonder if there is any media company which have TV-rights for sports which is not planning their strategy for sports betting? I’m not saying that those TV-companies should move to gambling operations, but they should understand how they could utilize their rights in sports betting business. The entrance of big media companies will affect on gambling business a lot because those companies have lots of customers and they understand their needs. It’s always easier from customer point of view if you could get all services from one place.

Third and the most important and interesting “newcomer” would be GAFA companies (Google, Amazon, Facebook & Apple). Those giant companies have based their business models on customer data and in principle they could run whatever business with that excellent capability. I don’t have any “inside information” how actively those GAFA companies are in gambling area, but I would be surprised if they haven’t made any survey around that business area. If they, or just one of them, would enter to gambling business, it would mean dramatical change. To be honest, I’m not sure how well current gambling companies would succeed against them. I would say that we should hope that they won’t come or at least won’t act as operators! Probably they are not willing to take the risk of losing their brand when the reputation of gambling business is not so high…

That consolidation would also mean something else than just new companies entering to our business. We have already noticed that some gambling companies have started other businesses than just gambling. We have example even from lotteries where some big companies have moved partly to technology direction. For example FDJ from France and Camelot from UK have invested quite a lot to technology development and are nowadays trying to sell their solution to other operators. Some other lotteries like SISAL (Italy) and SAZKA (Czech) have tried to utilize their gambling solutions in other business areas like selling different kind of tickets and give payment services. I know that many gambling companies are looking for solutions where they could link gambling and casual games and offer something totally new which wouldn’t be gambling as we have used to define it. I believe that we shall see consolidation even more in near future.

I think that consolidation of different businesses would happen and succeed if there are possibilities to utilize your current competences somewhere else than you are used to do. If you have lots of information and understanding about your customers, you could use that almost in all possible business areas and that’s the main reason why those GAFA companies have managed so well. It’s much more difficult to enter in totally new area where you don’t have any expertise, capability or assets. That might be possible for start-ups, but for big existing companies it would be stupid risk. You should understand where your strengths are and try to find out new ideas where you could utilize them!

WHY WE NEED INNOVATIONS?

That question was asked from me two days ago. I’m not 100% sure what I answered to that, but I’ll tell you what I would answer now.

European Lotteries (EL) organized Innovation seminar here in Helsinki this week. My company Veikkaus acted as a hosting company and I believe that our team managed very well. The Innovation working group of EL did also excellent work when they planned the seminar program. We managed to get well-known keynote speakers like Dietmar Dahmen and Dave Caygill to our seminar. I’m not sure if I learnt anything specific from their presentations/shows, but at least I’m even more sure that we really need innovations! I had great opportunity to open that event and suddenly I was also asked to say the closing words and there my colleague Suvi asked the question in the heading of this blog.

The world is changing all the time. Consumers, and our customers, have more opportunities available. The competition has become tougher than it has ever before been and I’m sure that it won’t be easier anymore. I think that lottery companies have trusted that monopoly situation will secure them from the competition – I’m afraid that there still are many lotteries which are thinking that way… I’m sure that consumers don’t think that there is separate business area called lottery business or not even gambling business. Consumers just decide how they are going to use their money and lotteries and other gambling companies are in the middle of that “battle”.

If company would like to succeed in the competition, it should offer something special and different which customers would like to buy or pay for. If you are offering just an average product you could compete only with price which should be lower than the other companies have. It’s obvious that lotteries don’t have the lowest prices or the highest payout percent. If you can’t compete with the price, you should have something different compared to other companies. That’s why we need innovations!

I think that it’s already clear from my previous blogs that in my mind the customer is the King (or Queen)! We must always think about what the best solution for our customers is. It won’t help us, if we manage to develop excellent technical solution but consumers are not interested in that at all. Consumers are used to use service from great companies like Google, Facebook or Amazon and we should be at the same level than those giants are. How we can do that when we don’t have as much resources than they have? Cooperation might be the way to do that. Companies should utilize start-ups and their innovation capabilities. We should also find out good business partners, because we can’t do everything by ourselves. Companies should concentrate on areas where they are good and have strengths and let the partners take care of other issues.

The difficulty in innovation is that you don’t know what you are going to get there, or will you get anything. The scope of innovation work should be 2 – 5 years. If you are looking for something quicker innovation is probably not the solution. By improvement and development you could get something new quicker, but then the result won’t be so radical. Companies should allocate resources to all those three areas (improvement, development & innovation), because we can’t wait years to get something totally new.

Dietmar Dahmen spoke lots about customers and trust. That sounded very familiar to me. It’s extremely important that your customers would trust on you! It would be great to innovate products, services and above all business model which would responsible but at the same time profitable. I’m not sure how to make it, but I’m so keen on trying to do it. The result should customer oriented, personalized, easy, fun, modern and profitable solution for gambling business. Let’s innovate and try to make it happen!

The best Sports Betting company

I’m honored to be one the judges of SBC Awards. SBC Awards is big event where gambling world will select the best operators, affiliates and suppliers in many different categories. Big gala event will be in early December in London where we’ll know which companies have made the best work this year. I don’t know yet in which categories I’ll act as a judge, but I’m now going to describe what kind of operator would be the best one in Sports Betting business. I’m not going to mention any companies by name, because I’m not willing to cause them any good or bad reputation.

How to compare different companies? What are the most relevant features which we should think about? How to analyze and compare actions in different legal and business environments? How to compare business results and for example responsible gaming features? There are much more very relevant questions. So, to act as a judge it is not so easy job but at the same time very interesting duty. I’m sure that all those companies which are now there as candidates in different categories are good companies but how to find out the best ones?

I have three main principles which I’ll analyze. The first one is: is company acting by law? That will be “yes or no” question. If company is not following laws and rules, it doesn’t matter how well it’s managing in other ways. I won’t appreciate that kind of company at all. It should be the industry standard in all businesses that everybody is acting by law. The companies which are operating without licenses can’t be the best ones, because they try to get advantages compared to the honest ones and that’s not fair.

The second question is: how good business results operator has reached and what kind of other results they have achieved? I would like to know what kind of goals they have had and how well they have reached them. I’m sure that all candidates of SBC Awards have tried to get as good business results as possible. There is no monopoly company among those candidates and it’s obvious that all those operators have more or less business driven culture. It’s not relevant to just look at the final profit, because there are huge and smaller companies in same categories. I would like to understand how well they have managed to run their businesses in different markets and competitive environments.

As you hopefully have noticed from my previous blogs, I believe that “customer is the king (or queen)” and companies should serve their customers as well as possible. So, the third question is the most important to me and it’s: which operators have attended to their customers in the best ways? I know that it is almost impossible to know that, but I’ll try to analyze that anyhow. To do that I should first understand what the most important features from customers point of view are. There are different kinds of customers in Sports Betting business, but I believe that most of important features are same for all customers.

I could think about that question from Sports Betting operator’s point of view, because my company is offering Sports Betting and due to that I should know answers to my question. But I think that the better way is to ask customers’ opinions about those important features. I have been active Sports punter already more than 35 years and I have my own strong views about that. In “old days” I used to be big punter but nowadays I’m not using so big stakes anymore so I could think myself as a normal Sports Betting customer. Although I might be good customer to analyze what is important in Sports Betting, I have now utilized my friends who are active punters.

What are the most important things for active big punters when they think about excellent customer experience? I was surprised how similar lists I got from different guys. I could almost use the list which I first got from my friend Vesa N. – maybe I have too similar friends…? It’s obvious that operator should be trustable – that’s “must have” feature but luckily not anymore very relevant because customers could trust on the most of operators. But it seems to be important that everything will work in smoothly way. Money transfers should work quickly in both directions. It’s normal that you could move money to your betting account very quickly, but it’s not so common that you will get your money back easily from gambling operators. It’s big difference if you have to ask many times to get your money and if it will take many days to get them. Easiness to use betting site seems to be also important. Customers would like to find out matches and specific betting objects easily. It really matters how many clicks you have to do – as less as possible would be optimal.

Customers are also willing to have clear rules which should be similar for everybody. They would like to know for example how much they can bet in different matches and betting objects. They seem to be a little bit frustrated in cases where they are trying to make 100 € bet and company is accepting 5 euros. I believe that they understand the risk limits of operators, but they wonder why those rules are not clear for the customers.

As a summary I would say that I’ll try to analyze how easy it’s to use the betting sites of different operators and will give most points based on that fact. I’ll also try to find out information about money transferring processes of different betting operators. I think that operator which is not willing to move money back to customers can’t be among the best operators. So finally, it won’t be anything like rocket science to find out the best Sports Betting operators. I’m ready to do that! After five weeks we’ll know who the winners are and probably I’ll write about that then.

RESPONSIBLE GAMING HAS IMPACT ON THE REPUTATION OF GAMBLING INDUSTRY

I have worked almost 30 years in gambling business and most of that time in lottery world where I was told to use word “gaming” instead of “gambling” when I was talking about our business. I’m not native English-speaking person so I don’t recognize all details in that language, but I believe that it wasn’t only about detail issue but rather about reputation of business. Lottery people have always thought that lottery is much softer and not so dangerous business than casino business is. Sports and Horse Betting are somewhere between those two areas. To me they all are gambling business and it doesn’t matter how soft or hard versions they are. I use gaming when I’m talking about casual and social games like for example Candy Crush Saga.

It is true that lottery games have caused much less, or almost at all, gambling problems than other gambling verticals. That’s one of the main reasons why lottery has had much better brand in the society than other games groups have had. The other reason has been “benefits for the society and good causes” ideology which has been the model all over the lottery world. It’s still very common that states have monopoly for lottery games and profit from those games is going to good causes. In other games groups that hasn’t been the case or if it has it’s not anymore. The gambling world has changed and is going to change.

Responsible gaming has always been important part of gambling business, but its role has increased rapidly during last few years. Especially in Europe responsible gaming has big role in political level discussion and I’m sure that other continents will follow soon or later. It’s important to understand what responsible gaming is about. To be honest I’m not expert on that area, but I have my own view about responsible gaming and I’ll try to explain how it should work.

Problem gambling and responsible gaming are not exactly the same issue but of course those two things are linked together. There are about 3 % of adults who have had gambling problems here in Finland. About 40 % of that group are serious problem gamblers which means that there are 50 – 60 000 people who really suffer. At least in Finland the most of gambling problems are caused by casino games and especially by slot machines. That’s why the former lottery company and horse betting company haven’t thought so much about gambling problems. Of course Horse and Sports Betting are reasons for some of those gambling problems but not at all at the same level than casino games. All game verticals have become quicker and harder and they are not anymore so different than they used to be before. Responsible gaming should be in the agenda of all gambling companies.

Gambling professionals seem to be worried what will happen to the reputation of our industry. There is more and more public discussion about that and unfortunately that discussion sounded to be rather negative one. It looks like gambling will follow the way which has happened in tobacco industry already many years ago. Smoking was very common when I was young adult, but nowadays it’s not acceptable at all. I think that gambling and smoking are not the same. Smoking is unhealthy for everybody, but gambling is not so dangerous for 80 – 95 % of people. Gambling is more like alcohol than tobacco when I think about problems caused by those things. It’s sure that gambling companies should do more in responsible gaming area, but there is no reason to ban whole gambling, because it causes problems for some of customers. We should concentrate on finding effective solutions to prevent those problems!

The problems won’t be solved if just some companies would change their rules, business models or whatever is needed to change. I think that whole industry should take responsible gaming really seriously, because it will affect on the reputation of industry. If there are companies which don’t care about the welfare of their customer, we can’t solve these problems, because problem gamblers would have companies where to move from the responsible companies. How we could solve that?

States, regulators and social welfare bodies, should decide and describe guidelines and the most important features for gambling companies which should operate according to those rules. I would describe that like “box” where companies should stay inside, but there they could run their business quite freely. If there would be any company which is not following those rules, that company should be punished very heavily and finally prevent whole operations of that kind of company. That model would work if whole industry would agree on that and there would be good cooperation between the industry and regulators.

What would be the best way to prevent gambling problems? I believe in personalization where gambling companies could utilize also other data sources than their own customer data. Unfortunately, it’s not legal to combine for example company’s customer data and data of the customers who have got help for gambling problems. In principle GDPR is good thing, but in gambling problem area it prevents to solve even bigger problems than customer’s privacy. One solution could be state level data center which could have “black box” where regulator could combine information about gambling problems, income/tax level and gambling data. The result of that kind of information would be personal level gambling limits and/or bans for gambling which should be mandatory for all license companies.

I believe more in personal limits than general level limits. I’m not sure if customers could really make right decisions by themselves when it’s about gambling limits. Regulators and social authorities & experts together with gambling companies should help customers to set them the best possible limits. Those limits could be separate in different gambling verticals (lottery, casino etc.). Gambling companies have and will have tools like AI and machine learning which could help them to make better work in responsible gaming area. I hope that gambling industry could find out the way to prevent gambling problems in more effective way than it’s the case now and at the same time we could continue to run our business without causing any useless disruption for those customers who could play our games without any problems!

THERE IS NEED FOR CHANGE IN HORSE BETTING AND RACING INDUSTRY

I had possibility to participate in excellent Betting on Sports event in London two weeks ago. Among many other things I listened to panel discussion about the future of UK horse racing and betting. Although horse racing and betting in UK is not at all the same than it’s here in Scandinavia, the challenges sounded very familiar to me. I’m sure that horse racing and betting won’t succeed if they are not ready for big changes, but how big risk they are ready to take?

I have owned racing horses already 44 years (since young kid), been active horse punter almost as long time and worked many years in horse betting business. So, I believe that I have enough knowledge to make analysis about that industry. BUT there is big risk that I’m too insider and can’t see all problems we have. It would be interesting to get deep analysis from someone who is familiar with gambling and/or entertainment business but not horse betting/racing.

It seems to be global trend that people are not anymore keen on going to normal average horse racing events. The number of spectators on “Monday evening” races has reduced all over the world. Nowadays it’s so easy to watch races from TV or mainly internet and there is no reason to go to racetracks anymore. That will cause big problems in long term, because racetracks have been the best channel/place to attract new customers. Where we could reach them if they are not going to visit tracks in the future?

The situation is not so bad yet. Big horse racing events are still popular ones. There were over 70000 spectators in one day in Cheltenham Gold Day Cup (in average over 60000 per day) and we had 55000 people in Kuninkuusravit, the biggest Finnish horse racing event, in two days. So, it’s still possible to get audience to the racetracks but you should offer them something special which big events are doing. But I’m worried about would that continue and what would be enough for audience. I have examples from Sweden. I have visited in their most popular horse racing event Elitloppet already since 1978 and I think that there less audience this year than ever before. I also visited in the classical Trav Kriterium last weekend in Stockholm and there were less than 3000 spectators and Kriterium is one the main events. If that kind of high-level racing event doesn’t attract people, what we should offer? It seems to be obvious that racing is not anymore enough and you should offer more entertainment.

Horse betting is extremely big business and has managed surprisingly well although there are more and more new gambling opportunities available. According to surveys the size of global legal horse betting is about 27 billion euros (illegal market is also extremely big one) and it’s estimated to grow by 1 – 2 % in next few years. The growth rate is lower than in other gambling areas but it’s not catastrophic and that might be reason for the future problems… It is always difficult to make big changes when your business is still going rather well. You are not willing to take big risks because you are afraid of losing what you have although those changes would help you to maintain or even increase your profit level. That seems to be case now in horse racing and betting industry. Almost everybody agrees that we need structural changes, but we are not ready to change things which have worked well.

Horse betting industry has managed to move towards digital channels. Nowadays horse betting from digital channels is almost as big as betting on tracks and betting shops. In next two years digital horse betting will be bigger than retail and track betting. Here in Finland about 75 % of horse betting is already coming from digital channels. In that area horse betting is acting in modern way. Someone might say that even too modern way, because punters get better service in digital channels than they get on racetracks and there is no reason to go there anymore. Anyhow I think that the problems in horse betting are unwillingness to change racing formats and bet types. We have had same bet types (win, place, exacta…) tens of years and we are not ready to test something totally new. I’m not sure if Live betting would work in horse betting, but we should at least test it and/or try to find out another solution to offer customers more interactive betting options. There is huge amount of data available from horse racing and betting, but are we really using that to develop our product better? Do we know what kind of races are the most interesting ones from customers point of view? Do we know when punters are willing to make horse bets – when the races should start, where races should be etc.?

The core question is to whom we are developing horse racing and betting. Are we doing that for horse trainers and owners or for active horse punters or for “big audience”? The needs of those groups are very different ones and we can’t fulfill the needs of all of them. I think that horse racing and betting industry should understand where the money is coming from and try to maximize or at least optimize that revenue. Everyone in horse business would gain from higher profit. I have told that already many times in previous blogs, but I say it again: customer is the king or queen! I know that now some of readers might say that I’m too much horse betting guy and I don’t understand and appreciate horse racing and horse people. I do, but in my world we need customers and horse punters who will bring money to our business. I’m keen on hearing and understand if there are examples where the level of horse racing price money is not linked to the level of horse betting. I know that the Arab Emirates and Al Maktoum family is an exception but is there any other examples?

WE SHOULD THINK ABOUT WHAT IS BEST FOR OUR CUSTOMERS

It is obvious that discussion about the future of gambling business is going on all over the world. It doesn’t matter so much what kind of legal structure you have in gambling business. Of course, there are many differences between monopoly based and license-based systems, but the main challenges & problems are same. The Danish gambling expert Morten Ronde, who I appreciate a lot, compared our situation to previous development of tobacco industry and attitudes against it. It’s possible that the public opinion might turn to be even more against gambling.

I agree with Morten that it sounds familiar when I think what has happened in public opinion about tobacco. Anyhow I don’t think that the same should happen. I admit that gambling will cause serious problems and that should effect on the ways how we run our business. But gambling or gaming is not dangerous for all of us. It’s more like alcohol than tobacco. I think that tobacco is dangerous for all smokers, but alcohol is not for all drinkers. I don’t have any facts about that but it’s just my personal feeling. Of course, alcohol like gambling will cause problems if you consume it too much.

What we should do then? It was again Morten Ronde who said that everything should start from operators. We should have serious will to make everything as good and safe as possible for our customers. If gambling companies just do things because regulator has forced them to do, the situation won’t change. Fake actions are not so effective than serious ones!

I’m not trying to tell what gambling companies should do in practice, but I try to describe the principles which could make things to be better. I have got idea about that from the strategy seminar of KPMG. I believe that if companies, in whatever business they are operating, would follow these advices their business would be better in long term!

You should be trustworthy. If your customers don’t trust on your operations, you are in big problems. You should take integrity issues seriously. It’s absolutely not enough if you just do something in that area and write nice text in your Annual Report but act in different way. Customers will notice that for sure and they will lose trust on you.

I believe in personalization! You should understand the needs of your customers and try to offer your products and services in personalized ways. I think that AI technology will help us here a lot. I hope that AI will help us also when it’s about potential gambling problems. I’m not deep expert on that area but I believe that AI could already quite soon recognize potential problem gamblers.

Maybe I say this too many times, but you should know what your customers are looking for. What are their most important expectations? You should have will to give your customers even better service than they expect to get. You could manage to do it, if you listen to them and utilize data what is available about them. Same for everybody is not the solution in that area.

Now gambling companies seem to have quite big problems with their reputation. There could be many reasons why that’s the cause – too much marketing, too less actions in problem gambling area etc… You should know what the main reasons are and try to make much better actions in the areas which have caused those problems. It would be great to see cases where company could turn week actions to strong ones.

As I have wrote in some of my previous blogs, I think that there lots of different customer groups and their have different kinds of expectations. There are some active customers (active sports and horse punters) who are willing to spend lots of time in gambling but in average customers are looking for simple and quick services. You should develop quick and simple processes where everything will work fine and in a way which customers understand.

I admit that I haven’t been very empathic guy but now, maybe thanks to becoming older, I really believe on that. We should really take care of our customers. We should do everything to secure them although some of them are not willing to be secured. That’s extremely important in businesses like gambling!

Sports punters association

We’ll have historical moment on Friday here in Finland. Our active Sports Betting customers will have meeting where they are probably going to establish for the first time official association for themselves. I don’t know if that kind of association exist somewhere else? According to Google I could say that at least it’s not common at all. Maybe that Finnish association will be the first one in the world? It’s really strange if that’s the case because I advised our punters to do that already 25 years ago.

I think that it’s great that those active customers will club together! I would like to join in that association as an active punter but of course I can’t do that due to my job. I have no idea what that association will try to reach and how they are going to act. I’ll just try to guess what we might have ahead and write my thoughts about that.

There are Poker players associations in many countries, also here in Finland. Some of those poker players are also active Sports Betting customers and there might be some common members in that new association and in Poker players association. They should understand that the role of those two clubs can’t be exactly the same. Poker players are slightly like any other sportsmen. Some of them are members of teams and are getting part of their money there. So, Poker player association is more similar with Tennis or Golf players associations than Sports punters association will be. There are not only professional poker players in their association and that’s why it’s also partly some kind of customer’s association. As you know there are lots of different associations and organizations which take care of the rights of customers and try to work for better conditions of customers. I think that this should be the main purpose of that new Sports punters association too.

It’s natural that customers are willing to take care of their rights and try to get even better deals. It’s quite strange that this hasn’t been the case in gambling business at all. As I have mentioned many times in my previous blogs gambling business hasn’t been and shouldn’t be as any other businesses. Our business could cause big problems and that’s why almost all states have decided to control and limit gambling operations. Maybe that’s the main reason why customers haven’t actively required better conditions/rules for gambling. Of course, there has been often discussion about the needed of higher payout percent and some other issues too but in big picture the discussion hasn’t been so active. Due (or thanks) to digitalization gambling business has became more like common business and there are nowadays more opportunities for customers. In old days, not so many years ago, there were one or just few gambling companies and customers could just decide if there were willing to play or not. Nowadays there are hundreds or even thousands gambling companies offering their products and customers have much more options available. It’s sure that the role and power of customer has changed a lot. I know that there are still big differences between countries in that area depending on the local gambling legislation.

What Sports (& horse) punters association could do and how gambling companies should take that? It’s the fact that you won’t have any business without customers! Companies should serve their customers as well as possible. They should also listen to customers and have dialog with them. I believe that the best services will appear when you have developed them with your customers. Based on that it should be logical to have dialog with that new association too. It would make many things even easier from company’s point of view. But, would that kind of Sports punters association present the opinion of all Sports Betting customers? Very probably it won’t. They will talk by the voice of the most active and important Sports Betting customers and companies should understand that. I hope that Sports punters association will also understand that the goal should be dialog not fight with gambling industry. If both sides would have same view about that we might get excellent solutions. If it will be “we against you” no one will get good results.

If I think about the situation now here in Finland I would say that we have good base for dialog between company and customers. We have here just one company which take care of all gambling business. Of course there are many foreign companies offering their digital gambling products to the Finnish customers too, but those companies are physically outside the Finnish borders – except PAF. So, it should be easy to organize discussions between punters association and gambling company. But due to that monopoly based legal system there are many areas which the company can’t decided at all which means that customers should have possibility to talk with regulator and other authorities too and I’m not sure how that would happen.

As a summary I would say that we are living interesting times in gambling business and especially in Sports Betting business. I believe that based on the example of Finland you will get that kind of Sports punters clubs to other countries too and it will be good for our business in long term!