Champion Sports Asia Business Development lead Skyler Cheng provides an on-the-ground perspective of Asian betting market’s development and growth prospects for global betting stakeholders.
Though opportunities are often misunderstood, Cheng tells SBC that Asia faces its next betting evolution as ‘grey markets’ begin their long journeys towards regulation…
SBC: The industry seems laser-focused on the North American market right now, but are they missing opportunities elsewhere such as in Asia?
Skyler Cheng: Asia certainly presents a significant opportunity for online gambling operators. It has a huge population to target with developing Asia economies set to grow 5.2% this year and 5.3% in 2023. The market size estimate for Asia is that online gambling will generate around $50bn per year by 2026 so there is a lot of potential that is currently untapped. I think operators are aware of this, and that it is a market they need to be targeting.
The size of the online market has grown significantly over the past two years, driven in part by the Covid 19 pandemic. Due to worldwide lockdowns, people were forced online to access entertainment options and that has undoubtedly benefited the online gambling industry. Indeed, stats show that 40 million Asian players went to gamble online for the first time in 2020.
This sizable market is relatively easy to access, too. Thanks to unrivalled technological infrastructure, smartphone prevalence is high as too is the availability of 5G. There is reliable and super-fast internet, and consumers are very comfortable with using smartphones and tablets as part of their everyday lives as well as accessing entertainment options. Given this environment, I believe more operators will make a play in Asia over the coming months and years.
SBC: Generally, where is the market at right now in terms of viable markets for operators to enter? Where are things at when it comes to regulation and licensing?
SC: This is not an easy question to answer. We all know that Asia contains numerous grey markets and there are some jurisdictions in particular that are prohibitive when it comes to gambling and especially online gambling. That said, it would be foolish to write off Asia when it comes to being viable for operators taking a regulated markets approach. Countries such as the Philippines have regulatory frameworks in place with others moving toward legalising and licensing online gambling.
I believe that to generate the momentum required to push more countries towards regulating online gambling, more needs to be done to make lawmakers aware of the player protections that can be put into place and how the wider industry can operate transparently for the benefit of consumers but also the countries that embrace legal online gambling. Just like we have seen in the US, once one jurisdiction understands the benefits that licensing, regulation and tax revenues bring, a seismic shift across the entire country can take place.
SBC: Which country offers the greatest opportunities at the moment? Why?
SC: Japan seems to be a hot market right now with a number of established casino operators and brands targeting the country for the first time. India is also another market that has generated significant attention of late again thanks to its large population with an appetite for gambling and no Federal laws that prohibits online betting.
SBC: What challenges can operators expect in this market? How can these challenges be overcome?
SC: Payments are undoubtedly one of the greatest challenges. Players want to reduce transaction fees and speed up processing times and they are expecting the online gambling brands they wager with to provide a seamless wallet experience. There is anecdotal evidence in many jurisdictions of an increased adoption in the use of cryptocurrencies, and, in some cases, players now only wish to use digital currencies and so called, ‘stable coins’ for depositing and withdrawing. In addition to this, players want to be able to seamlessly switch between different cryptocurrencies within the sportsbook platform. This is something we have worked hard to develop and can now offer our partners.
While the technological infrastructure is generally advanced across Asia, there are some countries and especially in Southeast Asia where bandwidth and connectivity can be a concern. This can force operators to have to run streamlined versions of their sportsbooks without things like live streaming, which is hugely important for betting in-play on a wide variety of sports including esports. Of course, infrastructure will be improved over time, and it is something that the governments in these countries should be looking to prioritise.
Another key challenge is player retention. It is easy to attract players, but it is incredibly hard to keep them. That is why operators must offer customised and bespoke loyalty incentives and these are often different to what you would see in other markets around the world. Referral schemes, rebates and vouchers are hugely popular as they better reward the VIP customers that often make up the majority of an operator’s player base. Of course, this forms part of the wider user experience – operators will know if they have got this right as loyalty and retention rates increase as their players will stick around.
SBC: Are there any lessons learnt from other markets that apply to Asia?
SC: There is a lot that can be learned from the more established markets in Europe. One of the biggest lessons is the importance of adaptability and flexibility as this will allow operators to enter multiple markets across the region and deliver a localised product and service to the player. Nailing the UX is vital, and this is an area of focus that should be at the top of the list for operators and suppliers – this includes integrating new technologies such as blockchain, VR, AR and new payment options such as cryptocurrencies.
Ultimately, operators must provide an experience that not only meets but exceeds the player’s experience in each of the markets they target. This best practice not only applies to Asia, but all global markets.
SBC: Where will the Asian market be in two to five years time?
SC: Asia might not be offering the warmest of welcomes to operators right now, but I think over the next five years the governments of most of the developed economies in the region will see the revenue raising benefits that regulating and licensing the industry brings. Covid has been a driver of change and will act as a further catalyst for the adoption of frameworks for online gambling, especially for governments that have lost tax revenues from their land-based gaming industries.