ICE 2017: The impact of market consolidation on sports betting innovation

ICE 2017: The impact of market consolidation on sports betting innovation

Thursday, February 9, 2017
An ICE VOX panel debated the impact of market consolidation

The impact on innovation was the central point of discussion in the ICE VOX panel debate on whether market consolidation is destroying the sports betting industry.

Regarding recent mega mergers such as Ladbrokes Coral and Paddy Power Betfair, Andreas Bardun at LeoVegas argued that consolidation is not good for innovation because merged companies are more focused on cutting costs and protecting market share, and can become averse to taking risks.

The head of sportsbook for Scandinavian-focused operator LeoVegas highlighted examples of digital innovation outside of sports betting in that region such as Candy Crush and Skype. He contrasted that with a sports betting scene dominated by a select few operators. He argued that a competitive landscape is required to drive innovation.

Ed Birkin from Ignite Research agreed that innovation is key for sports betting, but pointed to the current UK market to counter a “misconception that consolidation reduces competitive pressure.” He also said the chances of success for new innovative products was not reduced by consolidation, and that the opportunity is still there for disruptive technology within the established market.

Birkin also suggested that cost cutting has become a necessity given the increased associated costs with taxes, compliance and marketing, and while there may be a period where the focus is on the integration of existing products, consolidated companies will be able to maintain their margins and continue to innovate.

Steve Donoughue, industry consultant, agreed that innovation, which is driven by “an aspiration to make money”, helps to evolve the industry and drive new market entrants, but preferred to focus on the importance of good senior management within consolidated companies. He said the best CEO’s and decision makers will create a culture whereby innovation isn’t stifled, and they will have the money to act upon the ideas.

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