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…

Sports Betting – bulk product?

I’m on my way from the biggest gambling event in the world, ICE, back to home. I had there lots of interesting meetings and would have so many ideas for my blog. This time I chose the item which stimulated me most: the future of Sports Betting. I would like to thank three of my good friends Jens Nielsen, Stein Onsrud and Sami Kauhanen about fruitful discussions about that!

As you know I love Sports Betting! It has somehow been my ”baby” and I would like to see it to have bright future. Unfortunately, I don’t have so positive view about that, but we haven’t lost the game yet. In the ”old days” when we started fixed odds Sports Betting in Finland it was battle between odds compilers and punters. It was a little bit unfair competition due 20% margin which the company had. Anyhow the core of Sports Betting was to make as good statistical estimation as possible and that was enough to run successful Sports Betting business.

The other important feature was marketing. There could be some other companies who could make as good analyzes than your company and you should be more attractive from customers point of view than those other ones were. Marketing was the key tool for that competition. It was quite simple to run successful Sports Betting business in 1990’s. You just needed excellent odds compilers and marketing people.

Everything seemed to change when Betfair and some other betting exchanges appeared to the market. Their business model was totally different – margins where about 5% or even less. I believed that it was all over from traditional Sports Betting companies’ point of view. But I was wrong! Companies raised payout percent up to 92-93 % and that was enough for the customers. Of course, betting exchanges have taken quite big part of the business but not so much than I expected.

The next and probably even more crucial change in Sports Betting business has been and will be the raise of companies like Betradar, Betgenius, Kambi etc… Those suppliers are selling their statistical analyzes to Sports Betting companies. Odds suppliers have hundreds of odds compilers and analytics and they are using IT-experts too to make perfect analyzes. They can also utilize scalability more than Sports Betting companies can. Due to those reasons nowadays almost all Sports Betting companies have outsourced odds making to those suppliers. Companies are buying services from same few big suppliers and that’s why there are not differences in odds anymore between Sports Betting companies. That has made Sports Betting quite boring!

Sports Betting is not anymore bookmaking like it still was 15-25 years ago. I could even say that there are not anymore real fixed odds! They are rather running fixed odds because companies are changing odds all the time based on money coming in. Computers could take care of that and there is no need for skillful odds compilers anymore or isn’t it?

It seems that Sports Betting has become as a bulk product. All companies have the same product with the same odds. Marketing has still big role but something else is needed if you want to make business in that gambling area. I think that there are at least two possibilities left. The first one is understanding of your customers. You should be able to sell Sports Betting in separate ways to different customer groups. I already wrote about that in one of my previous blogs. There are customers who are not so interested in odds but are still ready to make a bet. You should offer Sports Betting to them in totally another way than to active punters.

As an old Head of Sports Betting business, I’m probably too much married with old times but I would say that the second possibility is to make better odds than the other ones. Would that be possible? I’m sure that it is but just in limited areas. You could concentrate on one or two sports and be there better than those odds suppliers are. Pinnacle is good example of that. They are now the leading company in eSports and very good in some other sports too. You could also concentrate on one country and try to be the best analytic of sports there. The Nordic lottery-based companies are good example of that strategy. I believe that my company Veikkaus is the best Sports Betting company in Finnish ice hockey and football and some other local sports like ”pesäpallo” (our own baseball style sport) too.

There is big risk that Sports Betting will be bulk product which all companies just have but no one really concentrate on it. But I believe that at least some companies will try to fight back and try to do some part of Sports Betting in different way than the other ones. As a Sports Betting enthusiastic I really hope that there will be need of bookmaking also in the future!