Towards a new balance
The gaming sector has been put to the test by the pandemic, a health emergency that in Italy has been added to the provisions on the ban on advertising.
Mauro De Fabritiis, founder of MdfPartners, analyses its trends in a European context
We are not yet and finally out of the pandemic, but still struggling with its dangerous shot tail.
However, it left a very deep and, perhaps, permanent “mark” in collective and individual life. Mauro De Fabrittis, founder of MdfPartners, tries to outline the new normality of gaming, in this still evolving context.
“We are definitely in a new normal, but very different from the pre Covid-19 situation. In the second half of 2021, the reopening of gambling halls, bingo halls, betting agencies, albeit within the limits of access (obligation of the green pass for employees too) and turnout of sales premises (distances within the stores), produced results in terms of revenues far from the levels of 2019. The causes of the decrease in retail are not only due to the aforementioned supply limits, but also to the demand. Many retail consumers migrated to online during lockdowns, and those who have returned to physical stores in many cases have reduced the frequency or average time spent inside the stores, certainly influenced by their previous experience during the pandemic. In terms of revenues, GGR is expected that the gaming sector will record a reduction at the end of the year of more than 30 percent compared to 2019, as a result of the decline in retail (especially following lockdowns), and an increase in online of about 100 percent. Most likely we will have to wait until the end of 2022 or 2023 for the gaming sector to reach the overall GGR levels of 2019. The bearing of online will change, which will weigh on the total about twice the levels of 2019, an vident sign of the acceleration of a change in the consumption model from which there will be no turning back”.
What has the pandemic left to the gaming industry, for better or for worse?
“The pandemic has had a significant impact on the gaming sector, in particular on retail, directly penalized by the closure of shops, following repeated lockdowns, but it also impacted on the online, for a limited period, by the absence of sporting events. The pandemic has put a strain not only on skilled retail operators but also on the big multi-channel ones, that have failed to compensate for the decline in retail with the increase in the online sector. The change in consumer behavior imposed by the pandemic, which has probably permanently moved some of the players from physical to online, requires companies that want to remain sustainable to rethink the business model through a digital and multi-channel approach”.
In these nearly two years of pandemic, has the perception of the sector by both politics and public opinion changed?
“The pandemic has hit hard the sector, paralyzing its activity for too long and indirectly giving space to the potential proliferation of illegal activities. If we add to this the climate of regulatory uncertainty that characterizes the sector, I believe that a uniform intervention plan that gives clear rules and certainty to an economic sector that deserves to be protected like many others is very urgent, also considering the employment that it generates. Politics seems to be sensitive to the subject. It will be necessary to follow a path in which gaming can be considered, within the mechanisms of consumer protection, a normal activity, thus recovering the reputational aspects in public opinion”.
The pandemic is the second “variable” in Italy, together with the Dignity decree, which has deeply influenced the gaming sector. In this context, how has the marketing of the sector been able and had to be adapted?
“The Balduzzi decree has strongly limited the forms of advertising previously allowed in Italy, both on physical and online gaming. Among the forms of marketing currently admitted and used, in particular online, are identified the CSR campaigns (without the operator’s logo), the information campaigns, the bonuses (typically welcome), the affiliation through the link to pages of odds comparison and informative blogs”.
Italy gained a following in Europe and many countries have strongly limited gaming advertising and sponsorship, although not reaching a total ban. What are the scenarios in terms of marketing?
“Several European countries that have regulated gaming, partly driven by the Italian example, have developed, under the umbrella of safe and responsible gaming, a system of measures that includes in some cases the partial or total ban on gaming advertising. This trend is involving several countries, including Spain, Uk, Denmark, Finland, Lithuania, France, Germany, Portugal. Given the current trend at European and world level, marketing activities in the gaming sector cannot ignore the aspects of responsible gaming, indeed they will have to be part of it. In this sense, the analysis of consumer behavior, also through artificial intelligence tools, becomes essential for compliance with the Kpis (key performance indicators) imposed by regulators. Within the limitations provided, technology becomes an essential asset for operators to develop effective and responsible marketing actions.
It would be desirable to identify at European level common principles between countries that could be the object of cooperation between their regulators, also with the involvement of operators, on responsible gaming”.