WhichBingo Report

Article I wrote for the 2017 Which Bingo Report

My earliest gambling memory is going to a local bingo hall with my mum as a kid and trying to keep up with dabbing my card. The fun my mum and her friends had has created a huge soft spot in me for bingo. Which is why now I have nothing but sympathy with bingo operators right now as they are facing an unprecedented level of pressure.

It has never been easy being a bingo company but the current challenges in my view, point to fundamental changes happening in the industry.

The traditional industry approach outside of a few big brands has been to launch multiple skins and to allow players to churn within their own network. This creates two big changes in behaviour, one is players have been trained for years on how to switch brands and chase welcome bonuses, meaning that player loyalty is at an all time low. Secondly the demand for bingo skins has encouraged a number of new entrants into the bingo software provider space.

These two changes have then made it easy for SEO affiliates to launch their own brands. With their lower traffic acquisition costs the SEO affiliates have, has created a level of competition that is very difficult for the big brands to compete against unless they spend significantly on TV and paid media channels.

When we look at the WhichBingo site we can see the direct effect of all of this with 450+ bingo brands running on 20+ different platforms. Wide choice and little product differentiation is a classic scenario that puts downward pressure on margins.

When we look at the games industry in general the rise of mobile gaming has been absolutely staggering, the latest data from Apple says that over 500 games are submitted every day to the App Store for approval. Mobile gaming is now also the dominant platform by user count compared to PC or consoles.

Right now with the popularity of mobile gaming at all time, bingo players have a wide choice of non-bingo games to choose from including the like of Candy Crush Jelly Saga from King.

Using King as a proxy for mobile gaming companies we can from see Nielsen data that in 2016 King has spent £2.6million on TV advertising in the UK, this is far more than the majority of bingo brands. This coupled with the fact that King have no gambling policy restrictions with the likes of Google or Facebook means they can run hyper competitive online campaigns using all the latest advertising tools and features.

On the other side of mobile gaming is the rise of the free to play social casinos or social slots games, when we look at poker the Zynga poker game has been a permanent top 10 game on Facebook for nearly a decade and since it has launched on mobile been a constant top charting game in both Apple and Google stores.

Social slots and casino games are no different, with a good product, good marketing and great visibility in the app stores the games have been able to target a demographic that would never consider real money gambling while also targeting the existing bingo user base who can get the same buzz from playing games without the financial cost.

As we have seen with the recent transactions of DoubleDown by IGT in the US for $500m and looking at the install base of these games from app store monitoring tools the market demand for free to play casino game is very large and growing.

While bingo operators are facing pressure from the social / mobile type games when we look at the importance of slots games to a bingo operator there is significant pressure here too.

Traditionally and particularly in the UK and online casino was not very appealing with a dark colour scheme, James Bond-esque models on the home page and welcome bonuses in the thousands. For a bingo player it was not the most attractive place to play or to be seen to play on. That is until the Scandinavians did an IKEA style makeover to casino sites and we now have the likes of Leo Vegas, Mr Green, Thrills, Risk, Casumo, Casino Heroes and a host more all actively targeting the UK market.

These casinos with their soft and friendly branding, excellent customer service, free spin heavy welcome offers, generous CRM and quick cash outs are not only setting the benchmark for all casinos but are providing a viable alternative for bingo players who want a great slots experience. Subsidised by the lucrative Scandinavian markets and keen to prove to the financial markets that they can operate internationally the UK is typically the first port of call for any Scandinavian casino brand that wants to get big.

This Scandinavian invasion creates a constant marketing pressure and level of innovation on the slots side of the business which then puts a huge pressure on bingo brands retaining their higher value players.

In summary the bingo operators face a bottoms up pressure on player retention from the mobile games and social casinos and a top down pressure from the bingo player friendly Scandinvian casinos. These are both coupled with the normal industry wide pressure of 400+ brands and a commoditised product. This triple threat does not bode well for the industry.

What should the bingo industry be considering?

First off is game innovation, Rush Poker pretty much saved the poker industry, accumulator cash out has changed the nature of Sportsbook and a hit slots game like Starburst has created the new benchmark for casino gaming.

From a bingo perspective there have been no "must have" game innovations in recent times that has set players alight with excitement. Without this it’s not fair to expect players to care about which 90 Ball Bingo game they play on which site.

The second area of innovation and straight from the Christensen Clayton "Innovators Dilemma" playbook is that operators and software providers need to disrupt themselves before the new competition does and this means launching their own free to play bingo/casino products on mobile backed by a significant marketing budget and dedicated operating teams. Using their existing well-known bingo brands should enable operators to cut through the thousands of random and often poor games available on the market.

The final area is to focus on creating a welcoming "bingo style" casino experience. The biggest advantage a bingo room has over a casino is the community. By bring this community element to casino through the new multi-player slots games or through hourly slots race type promotions (Casumo are doing great things here) shows there is plenty of scope to merge the best of bingo with casino.

To wrap up, the bingo industry faces some tough choices and stiff competition from all directions, to thrive in the future requires making the right calls now. 

The full 2017 Which Bingo Report can be found here

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