#23: Betting on Beauty

Once I’d finished writing today’s essay, I thought twice about sharing it. Because my instinct was to keep this observation to myself and use it in the next-gen products we’re building.

But that would go against the principles that drive this newsletter. It also tells me it deserves to be shared.

I’d love your feedback and thoughts once you’ve read it — so hit reply.

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Betting on Beauty: The Surprising New Frontier in iGaming Innovation

Remember when having the slickest platform or the most sophisticated odds-crunching algorithm was a competitive advantage? 

Those days are long gone.

We're entering a new era. One where the thing that sets you apart isn't your tech stack but your taste.

Yeah, you heard me right. Taste. That intangible quality that makes people go, "Damn, I want to be associated with that" instead of "Meh, another sportsbook."

Understanding this shift is the key to building the next generation of iGaming products. In fact, this process is already underway, as I’ll show you.

The Commoditisation of Technology in iGaming

Code is cheap. Cheaper than ever, and it’s only getting cheaper. The barrier to entry to develop slick tools and platforms is decreasing by the day.

I was reminded of this last week when my business partner, John, sent me a Loom, “Look what I’ve built, mate.”

John doesn’t know his Python from his elbow (sounds inappropriate, but I’m keeping it.) Yet within one hour, with no coding experience, he’d developed an AI-SEO writing app using AI coding tools and some YouTube tutorials.

Attend a conference, and you can see this trend in full swing. The market is flooded with tech components and ready-made parts to stitch together to build a sportsbook or casino with great utility.

As the barrier to developing these tools and platforms gets easier and easier, we're seeing floods of new tech entering the market and making it ultra-competitive.

The traditional barriers to entry to starting a gambling company were:

• Legal regulations

• Technology

• Player acquisition (distribution)

• Capital

But given all of those are now solved relatively easily with anyone who has access to capital – the moat around launching an iGaming company is tiny.

So where does that leave us?

Distribution, the new battleground. But not for long…

Once tech became accessible, distribution became the new battleground. Launching an operator became easier, so the battle for player acquisition became more intense.

Being heavily involved in the affiliate business, I see this up close and personal. Affiliates are in a super strong position, and if you’re a good affiliate, you can be really picky about who you work with.

There is no shortage of sportsbooks and casinos to partner with; they are a dime a dozen. Popping up left, right, and centre like little Russian dolls. Carbon copies of each other, launched by anyone with access to capital.

So, competition for distribution in iGaming is still fierce if you’re launching an operator. But at the top end of the industry, it’s getting easier. Why? Because of the rise of influencer marketing. 

In fact, not just influencer marketing but influencers are now launching their own operators. They have distribution channels that reach far beyond what a traditional SEO-driven affiliate could normally achieve. 

Jake Paul, for example. He has 20.8m followers on YouTube. A viewership of over a million on most videos he publishes. That’s more than a typical Sky Sports Super Sunday viewership in which operators will pay the King's ransom for 30 seconds of ad time.

Add in Instagram and Twitter, plus the eyeballs he gets in his boxing career, and his distribution is insane.

Look at Drake’s involvement with Stake, Conor McGregor with Duelbits, and the next-generation gambling companies are solving distribution by plugging into the networks of the biggest personal brands in the world.

This isn’t just traffic generation, either. It’s trust generation. It’s cultural significance. It’s building a brand, building connections, and sparking emotion.

And it goes hand-in-hand with the last place you can find your competitive edge…

Taste… The final frontier

So, with the traditional barriers to entry falling before our eyes, it’s time for the creators, the artists, and the right-brained purveyors of beauty to step forward.

Because “taste” is where we can build our competitive edge. What is taste in this context? Well, I’m talking about this definition:

A person's ability to judge and recognise what is good or suitable, especially relating to such matters as art, style, beauty, and behaviour”

For us in iGaming, this means:

• Building a compelling and beautiful brand

• Crafting stories that evoke emotions in your audience

• Focusing on experience in your product rather than utility

• Building communities that people enjoy being a part of

• And making your brand culturally relevant

Essentially, products make you feel something when you use them, and they make other people feel something about you. Products and experiences that fulfil the human experience.

We need to become purveyors of beauty and connection. Which is funny…

Because it was long said that tech would destroy the human experience. That we’d be plugged into the matrix, with no escape, and lose sight of what makes us human.

But now that tech is no longer a competitive edge, we must return to the core principles of what makes life beautiful.

And I look around the industry at the poor user experiences, the boring brands, and the transactional nature of the performance marketing funnels. I realise that our industry is far from ready to compete on taste.

The great thing about this is that taste and distribution is a virtuous cycle. Beautiful brands that evoke emotion build affinity, and people crave associating with them, so word-of-mouth growth amplifies.

TL;DR

Copy the Apple playbook to build the next generation of iGaming products. They’re the ultimate case study for building a business on taste when tech becomes cheap.