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3rd Online Bingo Summit 2008 - The Bingo Landscape Today

The Online Bingo Power Panel at the 3rd Annual Bingo Summit There were a number of interesting statistics and figures given out over the two days, which help paint a picture of online Bingo in the UK. It feels like a lot has changed in a very short time, and whilst there is still optimism in the growth of the game, a number of factors such as increased competition have slightly taken the bloom off the jubilant atmosphere at last year's event.

There were conflicting views about the extent of growth online Bingo was yet to enjoy, and a range of interesting theories around what to expect next. In this article I want to pull together a number of these themes to help illustrate the (to pinch a term from the summit) landscape of online Bingo in the UK and some trends across the different areas of the game such as marketing, technology and operations.

The Size Of The Market In The UK

The first most notable figure is the growth of online providers. The latest figures presented were of 243 sites online providing Bingo, growing at a rate of roughly two new sites a week. In September 2007 that figure was around the 200 mark, and the summit before that, 150. These figures come from the UK Bingo portal Which Bingo. These 43 news sites represent an increase of approximately 25% from the amount of sites at the time of last year's summit. It's worth bearing this figure in mind as a pointer to how competitive the market has become with the increase in new sites.

The next set of figures come from research carried out by the Gambling Commission as part of their quarterly of review of player activity in gaming in the UK. It highlights a slight drop in online Bingo players over the last couple of quarters, although there was some questioning of the results due to potential skew in the figures and the size of the Gambling Commission's survey (8,000 people).

As well as the figures taken from their survey, the Gambling Commission estimates that there are around 500,000 people in the UK playing online Bingo. It's unclear how they arrived at these figures and if it includes players with multiple accounts, but overall that figure is almost double the figures mentioned in last year's summit of 250,000 people. There's some contradiction in the figures here as the Gambling Commission has seen a drop in players in its survey, so I'm not quite sure how that squares with the increase in players overall. But if the Gambling Commission's figures are correct and there's less players playing online bingo and more sites online providing the game, it shows how competitive the next year will be in the space.

As for operators, the recent figures supplied by Bingo Port's research has the turnover in online bingo estimated at £600 million, with profits to online Bingo operators being around the £120 million mark. Whilst all these figures have some question over them, they help to give a good indication of the market today. In Peter Trinz of Parlay's session, an additional useful figure was thrown into the mix, they estimate that there's as many as 15,000 concurrent online Bingo players at peak times every night.

The Perfect Bingo Storm

Warwick Bartlett gives his presentation In the Online Bingo Landscape session, Warwick Bartlett of the Global Betting and Gambling Consultancy used the analogy of the perfect storm to illustrate why Bingo has become such a success the last couple of years. He put the game's growth down to the influence of a number of factors that coincided in recent times and helped to drive the online Bingo explosion.

Many of these factors are well known, and have been covered before in depth, but there were a couple of interesting new ones that can be added to that mix. Warwick stated these reasons as the prime drivers.

The implementation of the UIGEA in the US forced many gaming operators to seek out new products and markets to explore.
The introduction of the smoking ban in the UK.
The penetration of cheap broadband in the UK.
The change in legislation around the advertising of online Bingo TV.

Alongside these historical reasons for the growth of the game, these were cited as a couple of new economic factors driving players to the online space.

The high cost of fuel stopping people going to Bingo clubs.
The credit crunch meaning people want better value for money and avoiding the auxiliary costs, online Bingo represents good value for money.

Warwick went on mention that the share of Bingo in the online marketing space was still growing, driven by this perfect storm. However, he estimated that this growth would level out in coming years as the very simple nature of Bingo would hinder its wider appeal, unlike sports betting which has a much more changing and varied nature due to the sporting and life style events it follows. There was an estimation that the total bingo market would be worth around £1 billion by 2012, so there is still much to play for in the future.

This somewhat gloomy estimation on the game's future was in stark contrast with an earlier presentation given by Peter Trinz. In his presentation he talked about Parlay's belief that online Bingo was yet to go mass market, and as a result the current success would pale compared to the potential growth and market for the game should it break into the mass market.

He used the technical concept of disruptive technology to back this up, talking about how the Bingo was yet to reach this state where it became an everyday piece of culture / technology that a large portion of the population used regularly. This state of crossover could potentially be reached by a number of factors such as the convergence of the game on mobile, online and TV driving a mass take up of the game. Another driver would be the emergence of Bingo being offered as part of a big global brand like Amazon or eBay.

I'm not quite certain that Bingo has this much chance of expansion in its current form. Whilst I can see where Peter Trinz was coming from in this respect, I think Warwick Bartlett's estimation is probably closer to the truth. That said, I'd love to be proved wrong in this. Given Parlay's continued expertise, and its own moves into the TV space, if anyone could potentially help Bingo hit this prophesied high note, they would be one of the forerunners to achieve it.

New Markets And New Brands

The topic of brands was once again an important one. Continuing with themes from Peter Trinz's presentation was the idea that if the game's penetration into the mass market was set to grow, then big media brands would be one driver of new players, and entry into other channels such as TV would be another. He discussed how so far, online Bingo was really only tapping into quite a small player pool, most of which were actually already Bingo players. The potential for a big media partner or a TV show to drive a non-traditional Bingo player online to try they game is huge.

The importance of hitting these non-traditional Bingo players was touched upon in a number of the panels. A number of offline channels were mentioned as a means to promote the game and reach these new potential players. TV I'll talk about in the next article as it merits a page all of its own, but other channels are also available to promote and give a taste for the game, print media was one example given, sponsorship, and casting my mind back to last year, Bingo was being taken into cinemas as well.

It's also important not to under estimate the impact of sports books moving into Bingo. It was mentioned at one point that Bingo was proving popular to sports book gamers as a side product to fill time between big sporting events and other timed events on the sites. The importance of brand in the sports book arena is another important draw for new Bingo players.

Peter Trinz gives his presentation As was mentioned in a couple of the panels, the truly big win would be when a non-gaming brand introduced the game to a huge, non-traditional market. This would tie in with Peter Trinz's talk of that big crossover to the mass market. The potential to expand the player base if the likes of a brand like Coca Cola, Tesco, Ebay or similar took steps into the market could potentially be tipping point to take the game into the wider mass market.

As the market matures in this country, it's yet to be decided which of the trends is likely to win. The more downbeat view of a slowdown would seem to be the most likely given current economic conditions and the glut of online sites out there. The expectations of others during the summit would reinforce this. Simon Collins of Foxy Bingo mentioned they were expecting a 50% drop in growth the next year, and the summit chairman Phil Fraser mentioned the slow down in the growth of the online Bingo market, down to 3% per month from 10% per month the same time last year.

Overseas it's a different picture, and there was a lot of discussion around the European market. At one point it was mentioned that currently they market in countries like Spain, Italy and Scandinavia was like the UK circa 2004. This means there's still a lot of potential growth for countries who'd like to chew their way through the complicated legal and regulatory issues that addressing those regions would entail. The biggest growth of the game the last year was in the Sweden, where online Bingo had really taken off. In Spain the market continues to grow and is according to Peter Trinz a potentially bigger market for Bingo, but due to various cultural and legal factors, the market is likely to be slower growing in the near future.

Given Parlay's position as a global provider, they're well placed to monitor what's happening in the international space. He went on to mention other countries as slowly emerging as worthwhile prospects for growth - Germany, France (but not until legal issues are cleared up) and Italy. Poland, The Baltics, Ukraine and Hungry were also mentioned as promising new territories. As for places to avoid for the time being, the US, Latin America and China were seen as difficult territories to aim for, and as in the case of the US, completely out of the game.

Consolidation And Two Bingo Tiers

The topic of consolidation popped up again a number of times during the sessions, as well as having one session devoted to the topic. One interesting theory put forward during the Online Bingo Power Panel was the idea of the Bingo space separating into two tiers in terms of the sites online. The top tier would feature the heavy weights such as Gala, Foxy, Mecca and Sun Bingo and the other smaller players would make up the lower tier where it was difficult to compete with the bigger players. This idea was touched upon in other sessions as the future of the space was compared to the current poker market where several big players currently control the majority of the business.

Simon Collins gives his presentation During Simon Collins' presentation on Foxy Bingo, the idea of two tiers was reflected in the data he gave from BingoPort about the most recognised sites. The results were 1. Gala Bingo, 2. Mecca Bingo, 3. Sun Bingo, 4. Foxy Bingo and 5. Ladbrokes Bingo. These would certainly be amongst my choice for the top tier of online sites. In my estimation as well, based on the figure of 15,000 concurrent players at peak times, these five sites would have around half to two thirds of all the online players on them at any one time.

The need to consolidate is still an important one, but interestingly in the online Bingo space, it was mentioned at one point that it wasn't really worth many online sites consolidating with each other. Given the small pool of players for the game, and that many players have accounts at multiple sites, the prospect of buying another site for its database of players becomes less appealing. There were cases for consolidation as well, but in a more vertical manner, for instance, online Bingo sites consolidating by joining up with other online games and lifestyle betting partners.

There was also the prospect of further vertical integration with sites consolidating a number of outside services into one base of operation, so for instance a Bingo provider buying and integrating its own software and payment solutions. In the consolidation panel, it was mentioned that many outside firms are under-estimating the revenues that online Bingo can bring in, especially in the field of sports books. It was mentioned that the average online Bingo player is a far more reliable and steady source of income compared to other online gaming genres. With this in mind, it was mentioned to watch out for further consolidation between sports books and online Bingo providers.

This year all talk of consolidation came firmly with talk of the C word, convergence. As well as online, there was the idea that TV, retail, mobile and print could come together to provide a compelling Bingo offering. As I've already mentioned previously, it was believed that it would be especially powerful if that convergence came with a new non-gaming brand behind it. There was also ideas floated that online Bingo could consolidate itself more with the retail game and find ways of tying up between the two still very separate entities.

Conclusion

So, there we have it, the market is still very buoyant and still growing, albeit at a smaller rate. Now, if Parlay are right and Bingo goes mass market then it could make for an interesting couple of years. Given the coverage of the game on TV, and new shows springing up tied in to the Bingo format, this could just happen. That said, if more and more sites come to the table and the player base doesn't increase significantly, there's going to be less to go around for everyone. The real winners will be the big brands, which are set to keep their market share and further their exposure via various 'convergent' means.

But, there's still space in the marketplace for the right sort of product to make a big impression. Wink Bingo was held up as an example of such a new comer on several occasions, but for every one that manages to succeed like Wink, there's another 10 that just sort of sit there and do little more than exist. Going forward, succeeding in online Bingo will increasingly be about differentiation and brand.

The market is maturing, but it's nowhere near the top of the hill yet. In my estimation, whilst things might slow down slightly, the next 12 months will see a continued increase in both players and sites offering the game. Like in retail Bingo, I know there's a big untapped audience out there (and I don't just mean men - more later) that's wanting to try the game online and no doubt with the right driver, will try it and also become regular Bingo players. The question will be increasingly be, who can get their attention first and profit from it.

All 3rd Online Bingo Summit Articles

Introduction
The Bingo Landscape Today
Television - The Next New Bingo thing
Understanding And Misunderstanding The Audience
Miscellaneous - Bingo Awards, Legal, Affiliates And The Network Debate

Author: David Lloyd - July 2008

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