No Substitute For Innovation

The gambling and wagering industries are littered with generic offerings, which contributes to a tough trading environment and is one of the main reasons for the large number of mergers and acquisitions seen over a number of years. Add to this low growth expectations and it's easy to see why taking out the opposition has become a key strategy for the bigger players in this space.

With so much emphasis on pool liquidity, bonus offerings and cost containment it is little wonder that newcomers are finding it tough to break into the market especially with constant player pressure on take out and odds offered. Even established operators are subjected to constant margin squeeze through rising costs, lower take out margins, an often unkind regulatory and tax environment and ever increasing competition for customers in a relatively static overall market.

Given the background realities I find it amazing that innovation is such a low key activity for the majority involved in serving these markets. Although speed to market is often seen as a big competitive advantage it is also true that taking the shortest route might often not be the best way to go. Getting there quickly with something new is mostly a recipe for others to imitate whatever works well and substantially shortens the window of opportunity for whoever introduced it first.

The alternative is the slow and often unpopular route of designing something that is not just new but also unique and putting the necessary IP protection in place before launching to market. This is admittedly time consuming and financially onerous but the advantages in the long run can be immense. An enforceable competitive advantage in a tight market will have major benefits for those willing to do the hard miles. Good innovations backed up by invention will not only assist in getting rapid traction from competitor's customer base but enable the attraction of a whole new generation of customers for much more sustainable growth.

Innovation through invention will provide far greater pricing freedom and thus better margins, increased marketing opportunities in both a B2B and B2C role, and provide a crucial competitive advantage to any new company wishing to establish themselves as a leading provider in arguably one of the toughest industries globally.

Mergers and acquisitions, cost cutting and containment and offers to burgle clients from the opposition will always be around and has it's merits but there is truly no substitute for innovation if a company wants to be a leading player with a long term future.