Advent calendar – Day 17

As anyone who has worked in multiple industries can attest to, every industry is unique in some way. When it comes to iGaming one defining trait which has been mentioned before is that there is very little exclusivity prevalent, and therefore low barriers of entry. It is norm to find the games of a developer on several, competing casino sites, and for a developer to not only partner with many operators but also more than one aggregator. Hence there is an abundance of developers and an abundance of products, the majority of them available in many outlets. Gaming Corps is no exemption – you will find all our games on all our affiliated operator sites. Hence, if a person wants to play Jellos, she can find that game on all the Gaming Corps’ affiliated sites which are licensed to operate in her country of residence. The only exemption to that for us is the 30 days of exclusivity in Sweden and Denmark which ATG has per agreement. This means that in all other geographic markets, and after 30 days from launch, there are no exemptions. This is quite a normal setup for most developers – limited exclusivity in some way (a game, a market, a distribution channel, a time frame) but for the most part open for business with everyone. What this means is that for a new developer or operator, there are low barriers of entry in the sense that an operator can always add another developer without losing the ones they already have. And a developer can almost always add another operator without having to make concessions to or cancel contracts with other operators.

But – low barriers of entry aside, there are of course a host of other factors which can prove challenging in establishing new relationships and making sales. An example of a challenge in doing business in iGaming is accessibility. Since operators are B2C and have thousands and thousands of end users, like many similar companies in B2C there is very little information about the corporate structure and contact information available externally. This is because otherwise the corporate team becomes a customer support. However, to get into contact with an operator in a country across the world where you cannot find any information online on who to contact other than an info address, makes for a poor start. That is worse than cold calling. In order to reach many operators, one needs to already have those relationships, either directly or by other relationships in the industry. The best way to start new relationships in iGaming is to be in the places where industry representatives meet – trade fairs. So from this perspective there are barriers of entry on the personal level.

For a new developer there is the challenge of having a small portfolio, to compare with developers who have been around for years and years and have hundreds of casino slots to offer. As mentioned in the Partner segment on December 2nd, what Gaming Corps has been able to offer in this early stage is not quantity at the get go but a long-term partnership, where if an operator or aggregator partners with us, they get a loyal partner with a clear vision and strategy for growth, which for many has been an attractive offer. But of course, not having the catalogue makes for a different sales process. A well-established developer charges setup fees for the integration of their products, which an operator will pay if they get a large enough catalogue including games proven to generate a lot of profit.

The commercial process does not stop for the developer when an operator is signed, at that point a long-term client account and co-marketing relation is initiated. It makes a difference if your game is one of 1000-3000 similar games or highlighted as one of five “newest games” or “our top selections” or similar categories the casino site promotes. This of course boils down to many things – offering interesting, innovative content, nurturing positive relationships, being a good partner and anticipating the needs of the counterpart, have ideas and patience, being available and much more.

When it comes to establishing commercial relationships the responsibility at Gaming Corps lies with our Chief Commercial Officer Mats Lundin. He has worked in iGaming for close to 10 years, and finds that one of the defining traits of the industry is the positive dialogue that comes from everyone liking the products. The job of a salesperson can often be tough in the sense that both in B2C and B2B people need and purchase many products and services that are not engaging. You may desperately need an air conditioner for your house, but you have absolutely no interest in the ins and outs of air conditioners. You may love your car but buying car insurance is just a necessary evil you wish you did not have to pay for. And so on. Selling low engagement products, or hygiene factor products, is a challenge in its own. You can also be in a business where engagement is high, but competition is fierce and exclusivity rules, so making a sale is extremely difficult as it means you have to convince the client to go with your offer and no one else’s. Mats points out that iGaming is a very positive industry to work in as almost everyone is happy to take the meeting, happy to talk about the products, interested in adding more partners, and that goes a long way in making a sale as well as finding meaning in your job. The key here for Gaming Corps as well as other developers is that when entering a partnership, the nature of the product means it really is a win-win relationship. If I sell you a bike, weather you have great use of it or leave it in your garage has no real impact on me until it is time for you to get a new bike. But when Gaming Corps provides an operator with a casino slot, both parties stand to gain if the game does well; today, next week, next year. And both parties have an incentive to keep in contact, help each other and make the effort to improve the mutual business.

When it comes to the process of adding more operators, currently sales at Gaming Corps starts with reaching out to already existing business relations, which in Mats’ case means that either he makes the contact or someone contacts him. There is also the element of establishing new relationships but that is less common at this stage in Gaming Corps’ development. The first meeting with a potential new operator is focused on two main things; technology and compliance.

Technology means what the conditions are for integrating the two parties, how that can be done (via aggregator or directly), gaging the cost in time and resources to get a partnership up and running. This of course has an effect on commercial matters, timing, prioritization and so forth. Here is why a conversation between two very interested parties can still take a really long time since there may be matters to resolve and an already existing pipeline of technical work that has to come before, or there is a need for new capabilities to be established first by the developer.

Compliance has to do with the respective licenses of the parties, which markets are possible to work on, if there are any issues that need resolving and in that case the time and effort to make that happen. Perhaps the developer needs to seek approval and get certificates for already existing games in new geographical markets, or perhaps certain markets need to be excluded because of the restrictions of either party’s licenses. Ten years ago this was less complicated, especially in the EU, since there were fewer licenses out there, but more and more different licenses are being introduced meaning that both developer and operator needs to adhere to specific rules in different markets. Here Mats needs to work differently than just a few years ago, he needs to allocate much more of his time on a regular basis to research and learn about all the new changes in key markets to make sure that he is completely up to date when stepping into a negotiation. Not being educated enough in the area of compliance can really hinder a deal from moving forward.

Once technology and compliance has been discussed, and if both parties want to go ahead, the conversation moves on to commercial parameters. Here there are standard types of agreements in the business, hence this stage is largely about agreeing on levels of renumeration via profit share. What again makes iGaming different, is that because everyone is “open for business” and exclusivity in any direction is rare, these talks are often very low key. In an industry where a company for instance chooses ONE provider of a service, once talks have come to sharp negotiation on price, both parties have invested a lot of time and want to see it through. Either agree or leave the negotiation. But in the case of both developers and operators, especially those well-established, most deals are valuable but do not exclude from making other deals and do not hinder other processes, purchases or sales. So they are rarely critical or urgent for any side. Hence it is not uncommon for conversations to go from 0 to 95% in one week or month, contracts are sent out, and then one party does not check in for many months or longer. But when they do, it is all on the table again. Here Mats needs to have a lot of patience and always, always focus on the long-term relation which is the true value for the company.

When an agreement is signed this is done in one of two ways. If the distribution of games from Gaming Corps to the operator go via aggregator, the respective contracts that both parties have with the aggregator set the legal framework for the relationship. Therefore, the only contract that needs signing is an agreement on the commercial factors, and then the aggregator sends out a work order which both counterparts sign. If the agreement entails direct integration, where there is no third party between Gaming Corps and the operator, both sides need to engage their legal advisors. In this case contracts are from 30 to 70 pages long as iGaming is a highly regulated industry and all aspects from integration to contingency plans to renumeration and compliance have to be put on paper. In those instances, the sales process will take much longer to close as there are more parties involved and more factors for both sides to consider.

When the client is signed Mats hands over the details to the IT function for the integration, and the MarCom function for distribution of assets and co-branding. Mats keeps in contact with all his signed clients and checks in after certain points in time to follow up on how the games have fared, weather it is above or below projection, and what can be learned from that. Ask if the client has any complaints or wants to make any changes. As with any industry based on personal relationships, keeping in contact is key as well as having the long-term perspective. One deal can also lead to another via word-of-mouth and recommendations, and that is a two-way street where Mats does his best to help out clients with any contacts or knowledge he has to offer.