insight into the future challenges for bingo networks

David Flynn, CEO at NYX Interactive, provides affiliates with a fascinating insight into the future challenges for bingo networks as the gaming industry anticipates any move from ‘.com’ and state monopoly licensing to ‘.country’ licensing.

WHILST THE ONLINE bingo market is continuing to grow and, indeed, is anticipated to almost double in size between 2010 and 2015, the networks and infrastructure supporting this growth will need to change dramatically if they are to keep pace with the fluctuating needs of the various markets and their technical regulations.

As sportsbetting and poker take the lead in newly regulated markets, bingo is tending to follow a close third. Given the lower yields, smaller target segment and, in general, less political pressure being applied in this vertical, it is quite safe to assume that this initial trend will continue. In certain countries, one can also see that bingo may not even be regulated for the foreseeable future.

Granted, the majority of gaming operator-derived online bingo business is today either standalone or centralised in .com-style network models, provisioned in a small number of locations, however, over time this will gradually change. As more and more markets take a stand on regulation, there will be many factors affecting the distribution of technology for the production of online bingo solutions.

• Each regulated country may have its own RTP percentage, reporting, game and promotional requirements to name but a few.
• Ultimately, this creates the headache of several bingo networks setting up operations in agreement with each country’s regulations, ensuring that all data feeds (for example, data to AAMS) are completed with no cross-border game play.

When considering smaller countries, this model will not be viable for many organisations since the returns will not be worth the investment. Hopefully, the regulators will foresee this issue but if not, it will be quite a blow to the .com networks of today.

So what solutions are there which would allow for the smaller regulated markets to enjoy the benefits of scale of the larger ones? It can’t be a hosted network outside the country or, indeed, a copied network hosted locally due to the aforementioned costs. I personally envisage a new type of network coming to the forefront of the business, one that I have given the name ‘Flexwork’.

What is a Flexwork?

The existing network model which many organisations support today will not be sufficient. A one-system-fits-all approach will not be manageable as regulatory decisions come to the fore. In order for small country licensees to have the benefits of offering large jackpots and prizes, and yet retain control of all areas under the new regulations such as RTPs, responsible gaming rules, regulatory data reporting, game types and, thus, marketing, they need to have the option to manage their own offering whilst also having the ability to ‘dip’ into the larger pooled games.
This solution would not only support cross-border networked bingo whilst ensuring that each country’s regulations are adhered to but would also give the best possible player experience. Such a solution clears the way for pan-WLA member networks, gaming operator networks across various regulated jurisdictions and, above all, a better offering for the player.

As a ‘side’ thought

To add to the complexity, the bingo industry is acutely aware of the benefit of side or mini games in their bingo arsenal. Let us consider a possible scenario where a country regulates bingo but does not regulate casino. The commonly repeated statistic that 50 - 60 percent of revenues are generally derived from RNG-based side games would lead to a devastating effect on the business model for most bingo operators and providers in the market today. The solution to this is pre¬drawn batches of tickets as the base for the instant lotteries.

Notes: Gross revenues of Online Bingo Operators at USD 1.6 billion in 2010 growing to USDj.ibn by 2013 (MECN).
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