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The sky’s the limit

Online sports wagering is on cricket, not football. Investors should look south of Ecuador, rather than toward Asia - and get locals to do the red tap if they want to get it right from the start

Cricket is the sport to look at in the online betting market and it is in Africa, said David Leppo, CEO of in a panel moderated by KMiGaming CEO Keith McDonnell held at the iGaming Summit yesterday during the last day of the Global Gaming Expo (G2E) Asia.
“Africa is the largest tax betting market in the world in terms of volume. And Egypt has one of the largest membership demographics in the African market. The Indian population in Africa is huge, and within that, cricket continues to grow.”
Leppo was accompanied by three other speakers who discussed current challenges and strategies for getting a slice of the emerging international online betting markets from the perspective of suppliers and operators.
While the product offer has diversified a lot over the last few years in Asia, there is still room for online operators to grow, suggested Charlie Choi, CEO of the Macau Gaming Information Association (MIGIA).
“As demand from players changes, you need diversified products. With the trend for the Internet in the past few years, like in the Philippines, where we can find lots of online operators, and also with several suppliers in Asia [going] for online, I believe they would break out to the Asia market,” he said.
While Asia is still an expanding market, and while casinos and online betting games in countries such as the United Kingdom are harnessing the Asian cultural approach – “clearly focused on the Chinese,” according to Barry Martin, Senior Consultant at KPI Consultants – other countries have been developing gaming niches and profiting.
“We used to think that China was the largest market, but with the regime change in Beijing, it has been affected. There is no doubt football is the largest market but cricket is the largest bet market, very popular in countries such as New Zealand, Indonesia and India,” clarified Leppo.
For Asian investors searching for new markets, Martin identified several correspondences that draw upon China.
“For any operators looking further west, there are similar models of what they are doing in Asia. Indonesia and Thailand, for instance, are very good parallels with China. The focus is quite bonus heavy, regulation is zero. Payment methods are also very similar in Turkey,” he pointed out.

Money movement
The issue of money movement and payment operations was also raised as an important aspect for investors willing to get a share of new markets either opening up or regulating online gambling.
In order to address these issues, the Senior Consultant at KPI Consultants explained that “any operator has, usually, to be very careful. It is something that has to be taken with a very considerate view.”
Building on the cautious approach to payment operations, Daniel J. Kustelski, CEO and Co-Founder of Chalkline Sports, gave an example from Western Union, a global money transfer company, which he said was fined half a billion dollars in January for facilitating gaming betting [in Africa].
As for Leppo, whose company has been investing in football and cricket online betting, the strategy to follow is finding a local partnership.
“We affiliate ourselves with one of the utilities, usually a cell phone company or a land- based company, which would take a small percentage of the transactions, so that we would not have to worry about the payment,” he explained.

Go local
Panel speakers agreed that localisation is the way to go in order for companies to cope with payment methods as well as getting around complicated regulations, red tape hassles, and understanding betting behaviour.
To Martin, “challenges everywhere is the amount of paper. As long as there are clear lines about ownership, it is pretty straightforward. In that regard, in Asia, the matter of ownership can be a bit convoluted.”
Speaking about the African case, one of his areas of expertise in addition to Europe, Kustelski explained that regulators in countries such as Nigeria, Ghana, Tanzania and all the way down to South Africa are finding a “formula approachable, much easier to work with, helping coach, teach and mentor, not only regulate.”
In particular, on-the-ground knowledge is perceived as a key point.
“Before you consider going into a different region or demographics – and we have learned this by experience – you need to get a good stronghold on the ground. The people who control the municipalities, the so-called tax payments to the municipalities, you have to sort that out first,” emphasised Leppo.
Martin also believes that in order “to get it right” it is important “to get a local that understands the market, like in Turkey, where you need it fully localised, localised language, with a nice array of payment solutions,” he explained.

Macau focus
Charlie Choi, CEO of the Macau Gaming Information Association (MIGIA), said that “Macau has the best conditions and is the most stable [market] in Asia today.”
He suggested, though, that in order to improve the offer “Macau should have more tech companies devoted to gambling.”
Another issue he pointed to is the lack of local talent.
“Surrounding areas like Hong Kong have lots of talent, and companies also. So, for Macau it is good if we can find people outside. For that, we would like to see advances from the government,” he opined.
In particular, he raised the development of customer services as a strategy to strengthen the offer in the city.
“We need good online services to be able to overcome whatever obstacles come our way,” he concluded.