Marcus Richards
The UK is home to some of the biggest names in the online gambling industry, including online casino brands and top gaming software companies such as Push Games and OneTouch Games. Given the success of many brands in the online gambling industry, it’s not surprising that new startups seek to enter the market.
However, these startups face big challenges if they hope to be successful. In the UK, there is around a 60% failure rate for startups overall. In addition to this statistic, owners of online casino startups face specific difficulties. We will show you what some of these difficulties are and how startups in the UK casino industry can succeed despite the challenges they face.
Challenges to online casino startups
According to Statista, the gross gambling yield (GGY) in Great Britain in 2022 was a little more than £14 million. This figure shows that the market is large and more than capable of accommodating numerous operators. But this does not mean that starting and sustaining an online casino startup is easy to do. Many fail due to the issues they do not overcome. We will look at four of the major challenges they face.
Legislation of the industry
The gambling industry in the UK is regulated by the UK Gambling Commission. This regulation means the operators are expected to adhere to UKGC restrictions and face punishments such as fines if they do not. For example, sites that are subject to UKGC regulations are not permitted to accept credit card deposits, and they cannot allow anyone who is registered for self-exclusion with GAMSTOP to play.
Given these restrictions, many online casino enthusiasts in the UK choose to play at offshore online casinos that are not registered with gamstop. At many of these sites, players can avoid UKGC restrictions while having a full online casino experience. This situation makes it harder for UK casino startups that are licensed by the UKGC to appeal to a wide audience.
Standing out from the crowd
Given the number of UKGC-licensed and offshore online casinos operating in the UK market, it’s difficult for startups in the industry to survive. To do so they must stand out from other operators. Examples of ways to do this include creating exclusive offers, researching and using innovative technologies, and designing an excellent customer service solution.
Lack of market understanding
Some startups in the casino industry operate without a full understanding of the market they are launching into. This is a dangerous thing to do as the best way to thrive as a business is to know your competitors and be aware of the customer journey. Not having a high level of understanding of the market and the customer base is one of the major factors in startup failure.
Video games and e-sports
The video gaming industry continues to thrive in the UK. It’s the fastest growing creative industry in the country and contributed £2.8 billion to the economy in 2019 while also employing 27,000 people. In recognition of the importance of the video game industry in the UK, the government produced a guide to provide advice to stakeholders. While this is good news for video game startups, it’s potentially less positive for SMEs in the online casino industry. The reason for this is that many millennials and later generations prefer the video game experience to that of online casino games. The best way for businesses to overcome this issue is to adopt innovations and ideas from video games to appeal to a wider audience.
How casino SMEs are addressing challenges to their business
It’s clear that SMEs in the online casino market have obstacles to overcome in order to succeed. There are several ideas they can adopt that make it easier for them to do this.
Using brand ambassadors
According to a study conducted by Nielson, 92% of consumers trust recommendations from other individuals more than recommendations from brands. So, it makes sense to use brand ambassadors to spread the word about an online casino. These ambassadors are usually users of the casino who leave a review online or talk about their experiences on social media.
Conducting market research
We mentioned earlier that understanding the market is crucial to the survival of startups. So, using market research tools like social media monitoring, data analysis software, and customer relationship management (CRM) software makes sense. Having these tools at their disposal makes it easier for startups to understand the market they are operating in and the people who are likely to use their services.
Providing exceptional customer service
An online casino can provide excellent games, secure play, and great bonuses, but it could still struggle if the customer service is not as good as it should be. Having knowledgeable customer service agents available via live chat 24/7 is a positive step that helps new online casinos to survive in a competitive environment.
Implementing the right measures makes it more likely that an online casino startup will survive and thrive, although there are never any guarantees in a crowded market.
