I have experienced recession three times in my life time in 1972, 1982 1992.
It is interesting that the gap between each of the recessions is 10 years. We were on schedule for a mild recession in 2002 but governments in their willingness to eliminate the economic cycle flooded the markets with money creating a bubble in stocks, property and commodities.
You know the rest of the story.
Yet this recession, so far, is not as bad as the past three recessions where we had higher rates of inflation, more job losses, and more bankruptcies. The reason is quantitative easing, or printing money, and that we are told is likely to continue to happen both in the UK and the USA.
During the year we have looked at a number of companies to assess their competitive edge in the market place and the forces that have an influence on e-gaming.
By understanding the difficulties and chances that these forces present, a company is able to produce a strategy that will make them successful in their market.
There are more than 2,100 websites offering gambling services and looking at the languages offered by the websites, the majority are targeting European customers. 85% of betting websites offer English, 22% Italian, 18% Spanish. No real surprise – these are the main European markets. Within each sector there are a handful of major operators that dominate and then a mass of smaller operators.
Two features that all the e-gaming sectors have in common are that they operate on very tight margins and have to work extremely hard to attract new customers. The business model works well in low-tax environments to enable the high-payouts to customers.
The e-gaming industry is one of the few markets that feels it has to buy its customers.
The conditions linked to both bonuses and the payment of progressive jackpots to winners is the soft underbelly of the businesses in my view. If the industry does not put its own house in order in this area of its operations I believe the authorities will. The effect of more regulation on an essential marketing tool will undermine creativity and innovation.
But the e-gaming sector is only set to get more competitive as state lotteries are now coming into the market in Europe and you, as private firms, have to ask yourself: