How Casinos Can Prepare for Changing Rules in the Industry

The modern gambling business is transforming at an incredible rate. New technologies, global trends, and unpredictable economic conditions require operators to be flexible and able to make important decisions quickly.

Experts from the Rosloto studio will talk about the challenges that entrepreneurs currently face and how project owners can adapt to them.

Why the Entertainment for Money Sphere is Changing

The speed at which new rules appear today is much higher than even 10 years ago.

For example, back in 2016, IBM analysed all the available data. As it turned out, 90% of the information was created during the 2 years before that. This was affected by the development of the Internet and the growth of consumer purchasing power, as well as increased interest of users in various products and services.

Today, the world is again on the threshold of large-scale transformations, and the betting sector is no exception. The task of operators is to prepare in advance and respond to emerging challenges in a timely manner.

Let us consider the main factors that force the entertainment business to change:

Improvements in the Legislation

In the gambling industry, there is a clear trend towards the regulation tightening.

The main reasons for this are the following:

1. Fight against ludomania. The government is concerned about the growing number of people addicted to the placement of bids, especially among socially vulnerable groups. That is why the authorities of many countries are raising the age limit, introducing multilevel identity verification, and banning advertising on radio or TV.
2. Increase in budget revenues. This is the cost of permits, licence fees, and taxes. The state bodies periodically raise the percentage of deductions, which is why operators have to pay more.
3. Exit of business from the “grey” zone. This is a common problem for many countries where gambling is prohibited. In practice, casinos and betting sites work illegally, and the government loses revenues in the form of taxes and duties. To deal with this problem, it is necessary to be proactive: legalise the casino industry and create transparent conditions for entrepreneurs.
4. Combating money laundering. The placement of bets has a high level of risk. Here, more often than in other sectors of the economy, fraudulent financial transactions and attempts to steal confidential data are recorded. Innovations in legislation are aimed at addressing these crimes and protecting honest business.

Europe is the leader in the number of transformations related to increasing control over gambling. The flagship of innovations is the United Kingdom.

At the end of 2023, the UK government presented the White Paper, a set of changes in the operation of casinos, bookmakers’ offices, and poker rooms.

Among such new rules, we can name:

• mandatory verification of financial risks by business owners;
• changes in the requirements concerning the creation of online products (games and bonus systems);
• setting maximum limits per spin at £2 (for persons under 24 years old);
• regulation of competitions (contests, quests, and tournaments) that offer significant prizes.

The UK is not the only European country that introduces restrictions. For example, in 2022, Georgia raised the age limit for players to 25 years. In 2023, the Romanian authorities banned the placement of casinos in towns with a total population of less than 15 thousand people.

Change in the Balance of Forces in the Market

Entertainment companies often face significant external obstacles. These reasons do not depend on the enterprises and are largely determined by the state of the region in which operators work.

Common factors include:

• competition;
• changed demand for gambling products;
• economic conditions.

Different balances of forces in the segment often makes brands diversify their activities: expand the portfolio, add advanced engagement features, etc. All this happens within the framework of vertical or horizontal growth and gives good results already in the short term.

Impact of Technologies

Innovations are the future of the gambling niche and a catalyst for its growth. They affect supply and demand in the market, as well as customer experience, security of online platforms, and the speed of processing requests.

New technologies that have found application in the entertainment sphere:

1. Blockchain. Most often, operators use cryptocurrency as a fast and reliable means of payment. Every year, the number of such casinos increases. Players value digital money for the high speed of transfers and low commission fees. As for entrepreneurs, they are attracted by decentralised work with minimal government intervention.
2. Artificial intelligence and big data. These 2 innovations often work in conjunction with each other. The first one is responsible for making informed decisions based on the information received, and the second one collects and analyses facts. The use of such solutions automates routine tasks of operators, increases the security of iGaming projects, speeds up customer verification, and much more.
3. Virtual and augmented reality. With its help, a three-dimensional digital world with an authentic atmosphere and live interaction is created. VR and AR provide a realistic user experience with quick immersion and indescribable feelings of joy, excitement, and fun.
4. Cloud technologies and 5G. They are applied 0for prompt and secure exchange of info without delays and failures but with excellent picture and sound quality. Providers are increasingly choosing cloud data storage. This way they protect the IT infrastructure of an online casino portal from negative influence from the outside.

Adaptation Strategies in the Gambling Market

Let us consider popular development scenarios in the entertainment sector:

Expansion

This is a strengthening of competitive positions when the operator's capabilities best match the changed requirements in the industry.

Among the existing formats of expansion, it is worth mentioning the following ones:

1. Vertical growth. This is a scale-up in the selected gambling niche. If the company already owns a digital casino, it can launch 2 or 3 more iGaming startups with a similar design and entertainment catalogue. The purpose of the changes is to strengthen positions in the market and increase the customer base through cross-transitions, as well as make a business more profitable.
2. Horizontal growth. In this case, expansion occurs by entering new markets but with the same set of solutions. Another option is to change the range of gambling positions in the selected jurisdiction. A striking example is the addition of sports betting offers to the portfolio, if the company previously dealt with slots and card entertainment.

Rapid horizontal and vertical growth is possible only with favourable changes in legislation. Similar development scenarios can be observed in the United States, where in recent years, the government has been gradually legalising the work of wagering platforms and online casinos.

In 2018, the US Supreme Court overturned the Federal law on the prohibition of betting, which had been in force for more than 30 years. Enterprises that were the first to enter the American sportsbook market can now add to their catalogues slot machines, arcades, and multiplayer fishing.

The main thing is to closely monitor the validation of virtual gambling in selected states (Michigan, North Carolina, and Delaware) and respond to all transformations in a timely manner.

Cooperation

This is collaboration with competitors, exchanging the experience and knowledge with them. One type of partnership is reorganisation and acquisition when a larger and financially stable company buys shares of a smaller one.

The most famous example of cooperation in the entertainment niche is the policy of the Evolution firm.

In just 6 years, the provider became the owner of a controlling stake in:

• NetEnt;
• Red Tiger;
• Ezugi;
• DigiWheel;
• Big Time Gaming and other software vendors.

For example, the purchase of Ezugi and DigiWheel allows Evolution to quickly eliminate competitors and become a leader in the live dealer games sector. Currently, the manufacturer’s content of this kind is presented in more than 30 jurisdictions, including promising American states.

Cooperation with NetEnt helped the brand conquer the slot machine market. Today, NetEnt continues to work under its name but the lion's share of profits is transferred to Evolution.

Survival

These are actions that can preserve enterprises in the face of drastic changes or unpreparedness for new conditions. This development scenario is the least favourable for organisations. Often, it involves steps to reduce the activity, dismiss employees, and leave particular regions.

Survival strategies for gambling companies:

1. Optimisation of current costs. The most obvious option is to cut budget expenses. This includes the payment of bonuses and the 13th salary, funding social initiatives for employees, or support for image projects. The released funds should be redirected to the strategic development of the business.
2. Withdrawal from the market. This approach is fair for international corporations that are represented in several jurisdictions at once. Abrupt changes in the rules of operation in one of them forces the enterprise to reconsider its strategy and sometimes even leave.
3. Choice of a stable direction. In a period of uncertainty, it is better to focus on the type of activity that constantly brings a good income. As a rule, these are the “classics of the genre”: traditional slots and table entertainment. Practice shows that this content is always popular with the audience, so even during a crisis, revenues will keep coming.

The Main Things about Adapting a Business to the Gambling Market

The casino sphere, like other sectors of the economy, is subject to large-scale transformation.

Key aspects that operators need to take into account:

• Innovations in legislation have the greatest impact on entrepreneurs. Changes can have both positive and negative effects. This is the legalisation of games for money in certain countries, the launch of grant programs from the state, and tax breaks. At the same time, project owners often face increased tax rates, advertising bans, and other restrictions.
• Key adaptation strategies include expansion, cooperation, and survival. In the first and second cases, the capabilities of a company best match the changing requirements in the sector; in the third, to stay in the market, it is necessary to take emergency measures.

The Rosloto studio offers comprehensive solutions for the quick launch and comfortable scaling of the gambling business.

From us, you can order the following useful services:

• products for sale and rent;
• connection of payment services;
• security software installation;
• promotion of iGaming brands;
• consulting, and much more.