Mainstream gambling operators are in a race for the first mover market advantage by adding eSports betting services to their 24-hour betting options menu. Shall the addition of eSports to their platforms convince the digitally connected millennial audience to sign-up? Industry eSports and digital betting consultant Mark McGuinness explains some of the marketing challenges.
Back to the future
Before the eSports moniker arrived, the origins of video gaming are entwined in Asia way back to the early 80’s with the Taito Corporation and the iconic Space Invaders. To games console manufacturers and publishers such as Sony and its PlayStation; the mighty Nintendo and the Gameboy and, of course, the Wii; to Namco Bandai, Capcom. Competitive video gaming and tournaments isn’t a new industry either. It’s been around for more than 30 years with Space Invaders and the 1st large-scale video game competition for 10,000 players in North America using their skills to secure the top prize. So for all the Millennials reading or sharing this article, it was the ‘older’ generation that invented the industry and current trends!
Esports attracts a predominately male audience, within the median age range of 18-25. However, a significant percentage of the overall eSports audience are under the legally required age for mainstream gambling services in regulated markets. The male basis is no real surprise when you consider that most of the popular eSports massively multiplayer online game franchises such as Call of Duty (CoD), League of Legends (LoL) and StarCraft II involve shooter, battle arena style war games – boys and their toys-springs to mind. From a marketing standpoint, this is an extremely sought after demographic by many brands both within the eSports ecosystem and outside, including gambling companies.
Behavioral and technology drivers
Several factors have aligned to make the current incarnation of eSports a runaway train. The first is the technology that allows for massively online multi-player gameplay. Back in the early 90’s online video gaming only accommodated up to 16 players, now you have the real multi-player capability with tens of thousands of players connected at one time. The numbers are colossal; 67 million players play the world’s most popular game, League of Legends every month. In Asia arguably the biggest gambling region, market research firm Statisa estimated 282 million massively multiplayer online (MMO) gamers in the Asia Pacific region.
The second factor, the continued adoption and usage of social media and video broadcasting. In particular YouTube and the live video streaming platform Twitch (launched 2011). Before Twitch even allowing for the multi-player capabilities, the playing of video games was solitary, until video broadcasting of yourself to millions of potential like-minded participants became a reality. It is this socialization factor, which is so much part of the Facebook and Twitter smartphone connected generation that desires on-demand entertainment that has propelled eSports to its current stellar growth.
The third factor is that previously video gamers, where akin or labelled computer nerds or teenage hackers playing in their basements/bedrooms in unlicensed video tournaments. Now through using their skills, they can escape the poverty trap and embark on a lifestyle that not only earns those professional players vast amounts of money but untold adulation from millions of fans.
The marketing proclivity
If we look at the psychographics such as aspirations, interests, attitudes, opinions, lifestyle, behaviour, etc. In broad terms, the eSports audience is ostensibly built around vast communities of shared experiences, with social sharing, social learning, social giving causes such as volunteering their time for unpaid work are central to the activity.
They are also the first truly digitally connected on-demand generation that is driving the decentralised internet and disruptive services. In short, this connected generation wish instant gratification via the multitude of discovery and recommendation apps and on-demand services that inhabit their desktop, tablet or smartphone. For the eSports connected generation, everything is on-demand and almost immediate. Don’t feel like hailing a taxi in the rain in London’s West End? No problem. Use the Uber app and it’s there in minutes. Need a companion of the opposite sex, then open Tinder!
The demand curve for eSports betting
Before we assess this, betting services already exist for the eSports demographic, long before mainstream gambling companies considered looking at the sector.
eSports fans and players use digital and virtual currencies for consumption of gaming products. They trade and bet on huge eBay style marketplaces whereby they purchase virtual items or skins to assist with their gameplay with Counter Strike Global Offensive on betting platforms such as CS: GO Lounge. This has grown into a relatively new craze where betting of these skins you own on live eSports matches and raffle betting has erupted for further financial gain. The concept is that if you win, you gain more skins or a skin of a higher quality and price all of which is based on a pool or pari-mutuel wagering system.
In terms of the money flow and economics, its supply and demand. The majority of these skin platforms accept and cash-out daily using Bitcoin as the digital currency of choice to facilitate the trading activities taking place on the platform.
Regarding the skin, the rarer the skin, the more players compete for it via bids. You can get skins from opening what to what is known as ‘crates.’ They are similar to a potluck or lucky dip whereby you receive a skin of varying value. You can also get a crate at the end of playing a game or randomly, or you can buy one (usually cost around $2 each). The crate, however, needs to be opened and to do that you’ll need a key!
The ‘key’ costs money, usually around a few dollars for the keys to crates. You’ve got no idea what the skin’s value is you’re going to get. Once the skin is revealed, you can check at a glance what the going rate for your skin is. You can do this by checking out the skin, in the game marketplace such as OPSkins. By doing this, it will help you to gauge what the value is at this current time as it fluctuates as more skins come into circulation in the marketplace.
These providers within the eSports Skin Trading vertical have amassed communities in the hundreds of thousands of players, wagering millions of dollars a day. They have been developed from within the eSports ecosystems by developers, with the community at the heart of the betting or digital betting experience.
The actual market size is difficult to determine as most of the skins trading platforms are unregulated, but some industry observers including Bloomberg suggested that the skins market in 2015 was worth $2.3billion with some 3million plus active players. The stats are significant and growing. If we take OPSkins a leading provider of skin trading, of which their website publishes user data, they had 1,363,140 players total to date and 9,026 players active in the last 48 hour period. You can visit the site to see the real-time stats yourself, the skins listed, of which over 350k skins being sold each week. Skins can go for a couple of dollars to thousands of dollars, with thousands of transactions a day and OPSkins is just one of hundreds of similar sites.
Everybody talks about how big fixed odds eSports betting could become for mainstream sportsbooks and yes that is a growing vertical. But yet skin trading as it stands today has gone largely unrecognised or ignored by sportsbooks with demand being serviced from within the existing eSports ecosystem. If you do a Google search for ‘skin gambling’ you get 19,700,000 results returned; compared to eSports gambling at only 300,000! So that’s a bit of a giveaway to where the actual demand curve lies.
The community or hub is central for optimal conversion
We have already witnessed new pure play eSports-centric start-ups and existing gambling brands offering eSports to various degrees of immersion. Some merely offer eSports as a betting option accessible from the main gambling navigation menu. To others such as Betway, who have introduced their eSports Betting Hub to create a sense of community around the betting product combined with a range of eSports specific markets such as ‘First Blood’ and ‘Map Winner’. Other operators have elected to follow or replicate traditional above-the-line marketing and branding methods that are used in traditional football sponsorship to acquire customers and top-of-the-mind brand awareness and recall. Asian behemoth Dafabet recently signed a sponsorship deal with UK-based pro eSports organization Fnatic, arguably one of the world’s top eSports team.
It is still early days to say which marketing strategy would work best for customer acquisition, but certainly a ‘rinse and repeat’ of existing marketing programs does need careful reconsideration for the eSports market. For example Unikrn, a pure-play eSports betting site that partnered with Australia’s Tabcorp and which hasn’t even been trading for a year has amassed 7 million players.
Another called eSportspools; a fantasy eSports pools platform that is showcasing at the up and coming EiG Start-up launch pad has acquired over 80,000 players just in its beta phase. From a marketing standpoint, these businesses have focussed heavily on building products that solve problems for the community interested in betting on eSports as against the traditional above-the-line marketing favoured by other entrants and existing mainstream betting companies. Certainly at this early stage, you would have to say in video game speak, they have made the ‘first kill’ when it comes to understanding the power of a community-based gambling entertainment offering around eSports.
Perhaps the greatest challenge is therefore not some much about the digital channels to advertise on to acquire eSports bettors such as Twitch, Celebrity endorsement of YouTube Shout casters or eSports team sponsorship and so forth.
The major marketing challenge for existing or traditional sportsbooks to acquire new customers within eSports is that the current product offering presents the polar opposition experience. In short a passive, solitary; non-community based betting experience for players or fans within eSports who are used to community-based and active participation betting with forms of digital currencies such as Bitcoin.
Who shall win the eSports customer acquisition battle?
The outcome has still to be determined. However as a betting man and avid gamer myself, it’s fair to say the new dedicated eSports betting franchises are winning the first few rounds. Why perhaps as the eSports nascent customer base appears to be anti-establishment in their behaviour and has the community is an important part of their beliefs. They may just not wish to offer their custom to established betting brands that they have never heard of. Instead, they may elect to give their social patronage to eSports brand franchises that understand their needs and give back to the community – something that mainstream sportsbooks have been lambasted for over the years – not giving back to the sport, the organizations or more importantly the fans. Furthermore, connected gamers have probably never seen a traditional betting interface nor placed a standard sports bet.
The proclivity for the eSports digital betting marketing funnel is in need of education, simplification and product innovation of the betting options around the eSports online or land-based events, but not for the potential eSports consumers per say, but for the operators themselves. Let the video games wars commence!
About the author
Mark McGuinness has more than 17 years’ experience in digital marketing director roles within the iGaming industry. He is the co-founder of esportsbet a consultancy and resource for gamers and sports bettors who wish to start betting on eSports.
Vahe Baloulian- EEGaming Interview – (EEGReport – Magazine – Issue3 – June – September 2016)
EEGReport Magazine: During 2015 and even in these few months of 2016, legislation in some Eastern European countries has been amended with new regulatory acts. For example, software suppliers need to apply for a second class license, etc. How do you feel this has impacted BetConstruct’s operations?
VB: Government regulation is important where the industry can’t, for whatever reason, self-regulate. In those cases we welcome it as it makes things clear and levels the field. Unless regulation deviates from its primary purpose of player protection and turns purely into tax collection, it allows us to better understand the jurisdictions where we are planning to become active. Now that some Eastern European countries are doing what many of their European counterparts have done, we are hoping that they will use the reality of them not being the trailblazers to their advantages and will learn from the sustainable regulating regimes. Although BetConstruct is typically prompted to go into licensing or certification processes by our partners wishing to operate in certain jurisdictions, our legal and compliance specialists are also tasked to keep us ahead of the curve when it comes to the upcoming and changing regulations.
EEGReport Magazine: As we know BetConstruct offers a full range of betting software for physical premises. How big is your impact in the CEE region?
VB: BetConstruct has its roots as a retail sportsbook operator. Therefore, we do have a very strong and ever-evolving sportsbook offering for the land-based operators and are fairly well represented in the region through our partners in the Baltics and Balkans. This does not mean we are completely satisfied with our penetration of the region. For historical reasons, we are very well aware of the diverse mentality and culture of the peoples living in CEE region and this informs our conscientious approach to their demands and requirements. However, it is the constant learning process that drives our efforts to identify and take advantage of the new opportunities there. We recently opened our Kiev office and will continue to insistently seek out new partners in this region.
IEEGReport Magazine: Is the online sphere taking over from gaming in the high street in bookmakers and casinos?
VB: The casinos and bookmakers who have not yet expanded online may harbor an intrinsic fear that online will take over the land-based industry. Still, I don’t think it is happening now and I don’t see it happening in the near future. Players enjoy their freedom of choice. They watch movies online but cinemas are still dotting the landscape, they read digital books though printed ones are still being sold everywhere, they buy digital music yet concert venues are still sold-out. Having said this, the land-based operators, regardless of their participation in the e-gaming space, must evolve to retain their allure. We see, for example, some of our partners moving from the run-of-the-mill shop formats to sports cafés and bars with betting as a major part of the offering. I believe that while it is not a matter of land-based being pushed out by the online, it very well can be a matter of those who cling to conventional, slow progressing modus operandi being pushed out by those who are innovative and swift.
EEGReport Magazine: Since the affiliates of some of these newly regulated countries fall into the same licensing criteria as software suppliers, do you think that this is beneficial to the online gambling affiliate businesses?
VB: By and large no, but it depends on the level of regulations that are applied to the affiliates and how the affiliates are defined. Affiliates are marketers, and as such they have to follow the same conventions that govern marketing trade. Every responsible adult oriented industry, whose products are being advertised to general public, should have a code of conduct. Affiliates should be required to adhere to the same codes of advertising as operators. If their efforts strictly fall within the definition of marketing, I think that regulating them as they do gaming technology providers is excessive. I think that while operators cannot take responsibility for their affiliates’ every action, they should carry out their own due diligence of affiliates before signing them up and continue monitoring affiliate activities during their partnership.
EEGReport Magazine: From the information we have, the Czech Republic is going to open its market to remote operators and it is believed that the first licenses are already going to be available at the beginning of 2017. Has your company received orders or requests from operators that are looking to penetrate the market and use your platform?
VB: Even with expected considerable tax rate increases, the pending adoption of a new gambling regulatory framework in Czechia, which will remove the seat requirement, has wetted appetites of a few operators that have contacted us hoping to upgrade their technology before this market really opens up. Our business development specialists too are actively exploring the new opportunities that 2017 will bring if these changes are enacted as expected. For us, as a technology provider, the constant challenge is to make sure our products comply with the new requirements without making the player’s journey more complicating.
EEGReport Magazine: Recent changes to Bulgaria’s remote gambling laws have made the market increasingly attractive to both foreign and local operators, but how is the competitive landscape shaping up? What is the inside info you have from operators that are using your platform in regards to this market.
VB: Bulgaria showed a more progressive approach to online gaming with sensible fees and taxes and open-minded legislation. Our partners in Bulgaria are EGT and the Bulgarian National Lottery. Both are undisputed leaders in Bulgarian gaming industry. It’s a market with a few big players, many of which are locally owned. These companies have been competing long before the new rules took effect. One of the major differences is that now this competition has moved into a more leveled field and those without licenses are being blocked by the government.
EEGReport Magazine: Do you think that countries such as Romania, Czech Republic, Poland or Hungary are markets for which operators should be queuing up for a license or lobby to be regulated, or does too much uncertainty remain to make it a sustainable investment given the fact that it’s the CEE region?
VB: We are talking about a combined population of about 80 million people. That’s quite a sizable market to be ignored. With Western Europe markets getting saturated and maturing, opening up new markets by having them regulated is very important. For some operators, I would say, it is vital. Removing uncertainty through regulation will help and if we talk about lobbying the efforts should be directed at making these regulations sensible. Regulations are there to first and foremost protect the consumer. If you look at the programs of the most industry conferences, you will notice that we get so overwhelmed with all the rules and requirements that we almost never discuss how we can better serve our players, their issues are never in the center of the agendas.
EEGReport Magazine: What other trends should we look out for? Where do you expect the European market to go?
VB: There is a lot of talk about e-sports, millennials, VR, M&A, etc. Nobody really knows how all these will play out. BetConstruct has been actively covering e-sports before it became a buzzword. With all the talk about them notwithstanding, millennials have still not being figured out. The real utilization and spread of VR in gaming is a few years away and all M&A activity is not really changing the way the industry functions. We can talk about trends, buzzwords and people doing the things media usually gets excited about, while, many companies, often unnoticed and unheralded, will continue running their casinos, sportsbooks, bingos and lotteries, quietly producing compelling results and serious profits.
Interview with Adv. Tal Itzhak Ron and Aviya Arika [Tal Ron, Drihem and Co., Law Firm] – (EEGReport – Magazine – Issue3 – June – September 2016)
EEGReport Magazine: How about Germany, which is granting just a certain amount of licenses and modifies this number accordingly every year. A market which has so many potential. In a recent study, if Germany opened its online gambling model to allow every qualified applicant to get a license, only 8 percent of the players would patronize with illegal sites. What’s your opinion on the German market?
Again, we believe that here is no point denying the dominance of online gambling, and jurisdictions that decide to go with this trend and not against it will be the ones who gain the most. It is always better to regulate something than to ignore it, the aim is to protect consumers and prevent fraud and money laundering. Actually, Germany is one of the first countries that is about to regulate specifically DFS by offering “soft” gaming licenses and this is a very wise and innovative step in our eyes, and we follow this very closely for some of the eSports, DFS and Social Gaming ventures that we advise at our firm.
EEGReport Magazine: In your expert opinion, which countries will be an innovation to the current wave of gambling legislations that is sweeping across Europe?
Sweden is discussing new licensing regimes; however we still believe Malta, Curacao and Isle of Man will maintain their dominance in newly established operations, based on statistics of our offices abroad in the last 12 months.
EEGReport Magazine: In our research to create this interview, we have found many interesting things about you (Tal) and I do believe you are one of our most famous interviewees until now. I’ve read somewhere that in your spare time, you are an active participant in the electronic music scene, and you’ve released a 1980’s-inspired electro clash single recorded with the well-known Israeli music producer, Izhar Ashdot (the producer of Late Israeli singer, Ofra Haza). Let me say, you are not the first Jewish professional I met that is active in such entrepreneurial activities…is this something that is really popular in Tel Aviv?
Well, what you heard is true. Generally, Israel is nicknamed the “Start-up Nation” for a reason. People here are very creative. My firm and I are leading the iGaming and financial technology legal profession for over a decade because we think outside the box, we facilitate things for our clients that would not have been possible elsewhere, we contribute to the most sought after publications, and we attend, lecture and co-chair 25 conferences a year. This way we shall always know what’s hot and what’s not and how to give the necessary “X-factor” for the success of our clients.
Tal Ron, Drihem & Co. Law Firm – the award winning gaming law firm since 2003, boasts a team of 11 lawyers and jurists in Tel Aviv, part of a larger group of privately owned companies consisting of alumni of prestigious universities and global law firms. The group, headed by Advocate and Notary Tal Itzhak Ron, focuses exclusively on Online Gambling law, Ad Tech and Financial Technology, representing the biggest names in these sectors and recommended by all leading platform providers as their first point of contact.
Adv. and Notary Tal Itzhak Ron is a General Member of International Masters of Gaming Law (IMGL), practicing in Hi Tech, Mobile Applications law, Digital Media, i-Gaming and Financial Entertainment law. Tal graduated from Haifa University School of Law (LL.B.) and Faculty of Computer Science (B.Sc.), and while working as a software developer at a publicly traded software company, NESS Technologies group, has further obtained a Master’s Degree in Computer Science from Bar Ilan University (M.Sc). Tal established Tal Ron, Drihem & Co., Law Firm in 2003, focusing on Online Trading, Ad Tech, Hi Tech, M&A, Fin Tech and iGaming, quickly becoming one of the first international law firms practicing solely on these areas, advising top-tier international clients in these fields. Over the years, Tal gained extensive knowledge in Financial and Gaming regulation, International Taxation and Payment services. Today his team of highly seasoned attorneys and partnering professionals headquartered in Tel Aviv and operating from 8 offices around the world, offers an international one-stop shop for all legal, incorporation, banking, M&A and licensing needs.
Offshore and Gaming Specialist Aviya Arika is a seasoned gaming entrepreneur who has been involved in the gaming and binary options industries for years. Through hands-on experience combined with legal and financial academic degrees, Ms. Arika’s areas of work extend from offshore and international finance law to regulated licensing and gaming law, while she has a special interest in lottery, fantasy sports and e-sports. Ms. Arika assists many of the leading operators and affiliates in the gaming, forex and binary options industries. Her contributions to the field can be seen in articles published in leading financial and gaming publications, as well as in lectures and panels she has led in main industry events. Ms. Arika’s past work with the state prosecution has given her a fundamental knowledge in AML and other criminal policies, knowledge that enables her to guide clients on best practice, reputable banking and compliance.
Stjepko Čordaš – NSoft and BiH – (EEGReport – Magazine – Issue3 – June – September 2016)
EEGReport – Magazine: Since Bosnia and Herzegovina, a Southeastern Europe located on the Balkan Peninsula is included in definitions of Eastern Europe or histories of Eastern Europe, we would like to know more about the developments of the online gambling. What is the current status of the Bosnian market in terms of licenses for online gambling software providers and are you running into difficulties at entering new markets?
Stjepko Čordaš: Betting industry in Bosnia and Herzegovina has a somewhat strained relationship with the government. Up to last year (2015) most of the market was unregulated and the government really did not know how to approach the issues. With the current legislation in place, online gambling has been finally legalized, but with severe restrictions. Before going into details, it is important to note that the complex national system is causing fractures in how gambling (in truth, every industry) is being dealt with. First we have Bosnia and Herzegovina, which is a country, where you have the first layer of the government and laws. For example, the VAT law is regulated on the country level. Then you have two entities – Federation of Bosnia and Herzegovina and Republic of Srpska. These two entities, de facto, behave like two separate states. Most, if not all, of the legal framework is separate and these have two separate governments. One of the points where there are differences is the law on betting and gambling. While Republic of Srpska has a governing law covering this matter for a few years now, Federation of Bosnia and Herzegovina just approved their law last year. While both entities laws are somewhat restrictive, one in Republic of Srpska is more open, with cheaper licenses and easier procedures. The licenses are valid only on the territory of one entity, so any operator that wants to cover the entire country has to have two separate companies and two separate licensing. This can cause additional operational expenses, as well as, introduce complexities into how operators run their companies.
When we go back to the recent legal changes in Federation of Bosnia and Herzegovina, as already mentioned, online gambling has been legalized. However, licenses are quite expensive – where the operator company has to have at least 750.000,00 EUR of founding capital, 400.000,00 EUR in guarantees and around 100.000,00 EUR in legal fees for the actual license. Also, there are renewal fees every year. In addition to this, the company has to connect to the central server of the Tax authority and send each and every ticket to the Tax authority in real time. This part of the requirement is especially troubling, since Tax authority servers and software do not have capacity to accept this amount of data in such short time and often their server is basically DDOS-ed by their own requirement.
Furthermore, RNG games are illegal online with the current legislation. Although, the idea was to limit virtual games (for example, this would be NSoft’s Lucky Six or Greyhound Races), the language of the provision makes it seem that all RNG games are illegal online. Which of course makes no sense, since most of the online casino games are RNG based.
Other than this the government introduced fees on players, where for sports betting players have to pay a 5% fee on their bets, and every prize larger than 50 EUR is taxed with a tax rate of 10%. There are plans to introduce the 5% fee for every type of game and to introduce tax rate for any prize.
So, as can be read the current legislature in Bosnia and Herzegovina is swimming against the current of the recent industry developments and at least from my perspective is severely limiting the open market economy in gambling industry. This is why NSoft is mostly focusing on gaining more international clients. A bit more than 60% of our current business is international as of this moment. The target is to have this number to at least to 80% by the end of this year.
EEGReport – Magazine: As we know you were born and raised in Bosnia and Herzegovina and your first touch with the iGaming world started back in 2013 when you took on a Project Manager role at NSoft, a company at which you are currently in the role of CEO. How much has the iGaming industry evolved in the recent 3 years, but especially have you seen significant growth in Eastern and Central Europe recently?
Stjepko Čordaš: Well, this is rather an interesting question – especially since in the last three years the iGaming industry is seeing a new renaissance. Web and web based technologies are finally enabling faster delivery to operators, easier communication with the punters, real time access do data and habits. In this sense, NSoft now has an edge. Since the start of the company some eight years ago, NSoft started all development on pure web technologies. At that point of time this was rather exhausting because other frameworks had already solved many issues and development in them was faster and easier. It didn’t help that most of the clients we had at that point were retail based. So web technologies and retail caused a lot of frustration then. However, now when the operators recognized that you have to be everywhere in order to stay competitive, web technologies are the bridge that enables this. Punters want seamless experience in retail (shop and terminal), online and mobile and the only way you can provide this are web technologies. So, a lot of issues that a lot of the software operators are now facing, have been already solved by NSoft, which can be seen in our Seven platform. Seven platform enables this seamless experience where the operator can control their entire operation from a single interface – be it retail or online environment.
When we look to the markets, Central Europe is a more conservative market with higher barriers to entry – the operators are well established, the punters have clear habits. However, Eastern Europe is just now experiencing the possibilities. One market in particular, Romanian market, is the current ‘gold rush’ setting. Romania has a lot of online infrastructure, there are a lot of people, market is being regulated, there are a lot of operators – which means that there is a lot of opportunities for us.
EEGReport – Magazine: You are a specialist in Secured Transactions Law and European Union Law. What would you change or add to the current frameworks?
Stjepko Čordaš: Unfortunately, I do not have much time to focus on these topics, but I really have to mention that reform of Secured Transactions law is my personal passion. Although, it may seem a bit boring at first – the Secured Transactions law is the one which the economy is really based around and one that enables the economy to function. Without going into legal details, I truly support the way the US has done this through their Uniform Commercial Code Article 9.
Regarding the EU law, I really don’t think anything needs to be added to this framework. For me, it is just fascinating how this supra-national framework is functioning and developing. What is currently lacking is the complete support from the different country members. But this is more of a political issue and I really try avoid to talk about politics. What I can add to this is that betting and gambling industries in the EU can really profit a lot from the principles that are set in the Treaty on the Functioning of European Union and especially on the principles of the free movement of goods, people and services. Some operators have recognized this, but I really believe that it should be used a lot more to push for more open markets.
EEGReport – Magazine: How big is the impact of having gaming software providers being present in Eastern Europe? Do operators feel “at home” by knowing they are entering markets where certain iGaming software providers have offices?
Stjepko Čordaš: Actually, at first operators are more distrustful to software providers from the Eastern Europe. It is probably in our culture to be like this, and this can be seen even on the punter side. For example, when we tried pushing localized versions of some of our products to our clients, the players would simply stop playing. Their notion was: “OK, this is local, it probably is not good at all.” And this extends further than gambling.
However, when we manage to overcome this first distrust, every client is amazed on what we have and what we have built. The real selling point for our product is when we manage to bring the client directly to our headquarters in Mostar. When they actually see a company with 150 young and motivated people, in a middle of ‘war-ravaged’ Bosnia and Herzegovina, everyone wants to use all of our products. In the last two years, this distrust is disappearing, since NSoft already has an established reputation in the market.
EEGReport – Magazine: As we know, the success story of NSoft is not something that happened by chance. A combination of great products, great people, and great culture played a key role in your growth. What are the future plans for the company?
Stjepko Čordaš: As already mentioned, one major goal is to export more services. The target is to get to 80% of exported services by the end of this fiscal year. Also, I can get into details on how we plan to grow 50% in revenues, expand to this and that market, but I will focus on something different.
The major goal for NSoft is to create 1000 workplaces. And this is how we measure our success. The key ingredients in the NSoft success story are our employees and our culture. We are trying to create opportunities in a country where youth unemployment is more than 50%. Working at NSoft is a privilege for every team member and we treat each other like family. I know it will be hard to translate this to an organization of 1000 people, but this is our goal and the most important plan for the future.
In order to facilitate our plan, we have started a start-up incubator and a programming school. The school is of major important to our goals, since it can fuel the knowledge required to have more quality employees. The school is completely free of charge and anyone can attend. The school already has around 300 active students and the incubator has 15 start-ups.
I could write essays on how we try to create and do things differently, but really, the only true way to experience this is to visit us at our Mostar headquarters. It is a bit hard to get to, but once you are there, you can understand the things I’m trying to write about. So, I am extending an open invitation to anyone who wants to come and see how we do things.
EEGReport – Magazine: Do you see an opportunity for young software developers, which are at a rather high number in Eastern Europe, to start new companies and maybe innovate the already known platforms?
Stjepko Čordaš: Yes, and yes. As already mentioned, we are trying to create this culture since there are a lot of opportunities for software developers and not just in gambling industry. For example, a few years back, the European Union declared that Eastern Europe is a strategic goal for the outsourcing of software development services. Why? Well, there are developers that are of reasonable quality, the mindset is similar to the rest of the Europe and the prices are cheaper. My personal belief is that we (Eastern Europe) should use this goal best to our abilities, but also shift this from simple outsourcing services to developing full-fledged products, as NSoft does.
EEGReport – Magazine: In your opinion, which are the most popular ways of online gambling in the Eastern and Central European region? Casino, sport betting, online poker, virtual games or maybe bingo?
Stjepko Čordaš: Traditionally, the most popular ways of online in the Eastern and Central European region is sports betting. However, if we move more to the Eastern part, online is just becoming a real trend and most of the business was focused on the retails sports betting and virtual games. From our business, I can say that countries like Bosnia and Herzegovina, Serbia, Montenegro and Romania are really crazy about virtual and bingo games. These types of games are generating most of the revenues on some markets and some operators could not function without these.
EEGReport – Magazine: Looking further afield, where are the major emerging opportunities in Eastern Europe and the Balkans for operators at this moment?
Stjepko Čordaš: If we are looking in the future, online and sports betting is really the opportunity for this market. As more connectivity is introduced, more punters are becoming aware of the different approaches and more opportunities the operators have to innovate. For example, UK is a classic well established market where in order to sell your product you have to have a product which punters already know. However, in the Eastern Europe and in the Balkans, operators can innovate a lot, since punters want everything but did not experience it before. So, in the next few years we can expect a lot of rise in the online segment in these markets with a lot of innovation and turnover being tossed around.
– Born on June 1, 1987 in Metković
– Attended primary and secondary school in Mostar
– Undergraduate degree in Service Management from RIT Croatia, Croatia
– Graduate degree in Law and Economics from CEU, Hungary
– Passion for technology and innovation which pushed me to NSoft
EEGReport Magazine Issue81 month ago
Interview with Peter W. Szabo (Principal of FarZenith – Initiale, Former Senior Manager UX/UI @ The Stars Group Inc., London)
EEGReport-Magazine-Issue22 years ago
The Fourth Anti-Money Laundering Directive: key developments and impact on the gambling sector – (EEGReport – Magazine – Issue2 – February – May 2016)
EEGReport-Magazine-Issue75 months ago
Affiliate Interviews: Nina Sparv of Nya-casinon.org (Epicorns)
EEGReport-Magazine-Issue51 year ago
Event Reports: SiGMA raises the bar with mega successful show (EEGReport Magazine – Issue 5 – February – May 2017)
EEGReport-Magazine-Issue12 years ago
Tim Heath – INTERVIEW about BitCoin – (EEGReport Magazine – Issue 1 – October 2015 – January 2016)
EEGReport-Magazine-Issue75 months ago
Event Reports: CEEGC Budapest 2017
EEGReport-Magazine-Issue75 months ago
Event Reports: Prague Gaming Summit 2017
EEGReport-Magazine-Issue51 year ago
Affiliate Superstars: Interview with Alexandru Radulescu (EEGReport Magazine – Issue 5 – February – May 2017)