#33: The Evolution of Online Gaming Markets

I've observed a fundamental shift in how we approach market entry and expansion in the iGaming industry. What strikes me most is how the traditional five-year planning cycle has become almost obsolete. Today's markets demand unprecedented agility - a trend I've seen accelerate particularly over the last year. This shift isn't just about shorter planning horizons; it's about responding to rapid changes in user experience and technological advancement.

Each region presents unique challenges that go far beyond basic regulatory compliance or competitive dynamics. In mature European markets, we're seeing fascinating shifts toward offshore operations, while emerging markets in Latin America and Southeast Asia demand completely different approaches to growth and development.

The success factors in today's gaming market have evolved significantly. Where once we could rely on standardised approaches to market entry, now we must combine deep local understanding with global operational expertise. Drawing from my experiences across Africa, Europe, and Asia, I'll examine how operators can effectively evaluate and enter new markets in this dynamic environment, sharing both successful strategies and valuable lessons from challenging situations.

Understanding Market Maturity Levels

The global gaming market presents a fascinating spectrum of maturity levels, each requiring distinct strategic approaches. I've identified three key stages of market maturity that fundamentally shape how operators must approach each region.

In fully mature markets like the UK and broader Europe, we see the most sophisticated ecosystem development. These markets are characterised by comprehensive regulatory frameworks, established player behaviour patterns, and intense operator competition. 

What makes these markets particularly interesting is the complex relationship between regulation and market behaviour - as regulatory requirements become more stringent, we often see unexpected shifts in both operator strategies and player preferences. For instance, in European markets, operators must maintain complex compliance systems while facing increasing pressure on traditional revenue streams.

Emerging markets present an entirely different picture. Looking at Brazil, we see a market with massive scale but fundamentally different operational challenges. Along with regulatory complexity, operators here face challenges around payment infrastructure, market education, and establishing trust with players. These markets require significant investment in foundational elements that mature markets take for granted - from payment processing systems to basic player education about online gaming.

Between these extremes lie transitional markets, which present perhaps the most complex strategic challenges. In these markets, we typically see rapidly evolving regulatory frameworks, changing player behaviours, and fierce competition as both local and international operators vie for market share. The Southeast Asian region exemplifies this stage, where markets are quickly developing but haven't yet reached the maturity levels seen in Europe.

Strategic Market Entry - Lessons from Experience

#1: Local Dynamics

One of my biggest lessons is that successful market entry requires a nuanced understanding of local dynamics. Brand building in new markets has taught me invaluable lessons about measuring success. It’s important to implement "Brand Health Tracking" - a methodology for measuring brand impact before and after major initiatives.

Launching TV deals, for example, in new GEOs can breed a lot of tension, even if you’re confident in the mathematics and research behind your decision. Brand marketing has famously been tricky to measure, and many see it as an easy payday for brand marketing teams, with no (or at least delayed) accountability for results. But it’s possible and now easier with tools like Blask. Once you begin to see those results come to fruition, it gives you more confidence in the strategy you’ve adopted. 

#2: Local Partnerships

Local partnerships are crucial in every successful market entry. In Africa, for instance, these markets are highly complex and can be corrupt - making it nearly impossible to operate effectively without strong local connections. So, it’s extremely naive to enter a new market without finding the right local partners before making significant investments, and I think we’ve all seen operators ignore this and, ultimately, fail.

#3: Resource Allocation

The business will allocate resources in a particular way in markets it’s already successful in. But as I’ve outlined, it’s not a one-size-fits-all approach when you’re entering a new GEO.

So, there will be apprehension about allocating resources differently when entering a new market. It’s important to create a clear strategy with lots of justification and strong success metrics. 

The case study I’ve written about many times before in this newsletter is when Stake dominated India by utilising local and niche influencers. They adapted their strategy for the local market and allocated resources in a new way. It takes courage, but it’s not a guess. They’ll have built a strong and measurable strategy and continue to revise their approach when they start to see results. 

#4: Operational Units

It may be a natural instinct for an operator to launch a new GEO using a team from their existing operational structure. I think this will often fail. 

Firstly, you will miss the nuances of the market, which only people who are native to that country will understand because it’s their day-to-day life. I understand the reluctance when it’s a country that has a very immature market. This means there’s not a strong base of people with iGaming experience to hire from.

But that operational challenge just means you need to nurture your own local team. It’s hard work, sure. But once you have that team in place, you have a huge competitive advantage.

Secondly, you need to consider the team’s priorities. If you launch using your existing team working in a successful market, where will their primary focus be? That’s right, the GEO that is bringing in the money. 

#5: Patience

One of the most important things I learned was about timing and patience. While quick wins are important, building a sustainable presence in a new market requires what I call "smart persistence" - maintaining momentum while being flexible enough to adapt to changing market conditions. This approach has consistently proven more effective than rushing into markets without proper preparation and local understanding.

Future Opportunities and Trends

Based on my analysis and current market observations, I see several key trends emerging in the online gaming industry. Latin America, particularly Brazil, represents what I believe is one of the most promising opportunities. Despite what appears to be challenging regulatory conditions in Brazil that put into question the market's viability, I see enormous untapped potential. 

Southeast Asia has recently surprised me with its potential. During recent due diligence work, I discovered that operators in markets like Vietnam, Thailand, Indonesia, Malaysia, and the Philippines are achieving remarkable numbers that few in the industry fully appreciate. While I understood the market's theoretical potential from my operator experience, seeing the actual affiliate revenue figures was eye-opening. This region is showing signs of rapid growth that could reshape the industry landscape.

I'm particularly intrigued by the evolving dynamic in Europe, where we're seeing a significant shift toward offshore operations. What's fascinating is that this isn't just about regulatory avoidance - it's about meeting genuine player needs. In countries like the Netherlands, UK, and Germany, which have some of the most mature regulatory frameworks, we're seeing the fastest-growing offshore segments. This trend tells us something important about the future of the industry: players will gravitate toward operators who can provide the experience they want, regardless of regulatory boundaries.

Looking ahead, I expect the industry to continue moving toward shorter planning horizons and more agile approaches to market entry. The days of five-year plans are behind us. Success will increasingly depend on operators' ability to quickly adapt to local conditions while maintaining global operational standards. Technology, particularly developments in AI and user experience, will play a crucial role in shaping how we approach these opportunities.

Conclusion

The key to success lies in balancing immediate revenue potential with sustainable growth opportunities while maintaining the flexibility to adapt quickly to changing conditions.

For operators considering market entry today, my advice is clear: focus on building strong local partnerships and ensure you have systems in place to measure brand impact and market response.

Don't be afraid of emerging markets, but approach them with a clear understanding of both their potential and limitations. Most importantly, remember that what works in one market may not work in another - success comes from combining global expertise with local understanding.