When the going gets tough, the tough get innovative. In a recession, there is a time to batten down the hatches, but those companies best placed for survival are those that utilise these turbulent times as a breeding ground to exploit new opportunities. The e-Gaming industry is no stranger to innovation and, despite being a young industry having never faced the challenges of recession before; on the whole, it seems to be coping better than other sectors.
When it comes to the Isle of Man, the new business pipeline over the last year, of companies looking to relocate was of course impacted by a reduced availability of investment funding, particularly for start-up ventures. Having said this though, the Isle of Man saw the contraction in new enquiries last only a few months during the summer. The recession, however, has resulted in only the sounder and robustly funded projects getting as far as thinking seriously about relocating.
Of the companies relocating to the Isle of Man in the last 18 months there has been a number of success stories. Most recently, Mahjong Logic was accepted for a licence in the Isle of Man. Mahjong Logic is a leading software developer of the real money player-to-player mahjong network, and is one to watch closely as the current market lends itself to this type of game. In addition to Mahjong, there have also been a number of Asian-based businesses that see the Isle of Man as the best place to base themselves to move into new markets in the surrounding area and time zones. These include online sports books 188bet and SBOBet (Celton Manx’s European sports book operation).
Innovation and creativity have been a regular feature of the businesses that the island has formed relationships with over the last 18 months. The convergence of technologies and use of social media have been major developments. The mobile marketplace has moved forward significantly as a whole with the introduction of the iPhone and similar devices which are really the first generation of handsets that are user friendly enough to encourage wide-spread use for many applications, including gaming.
The most exciting developments however have been those which break the mould and bring something brand new to the industry. Concepts which are hybrids of what might be seen as ‘traditional gambling’ and more leisure-based games are the ones which won’t have to compete with the existing punter’s pound but will attract new customers into the e-gaming arena. Customers are savvy about using bonus-led promotions to get as much free as possible so ultimately as the industry matures, operators have to look beyond short term price led acquisition and concentrate on developing product and brands which customers share some affinity with, really want and are prepared to pay for.
Live Casino output from studios has also been growing in popularity and in 2009 SBOBet was granted approval to launch a ‘Live Dealer’ casino by the Isle of Man Government’s Gambling Supervision Commission (GSC) – the first on-island operator, Asian or otherwise, to do so. However, from Live Casino has now grown a new format of dealing − live dealing as a TV feed from terrestrial casinos. This is more of a challenge to regulate but it will be interesting to see how it evolves in 2010.
The Isle of Man’s close public/private cooperation also means that new innovative ideas or developments in gaming from companies already on the island or those looking to relocate can be quickly considered and actioned. The island’s flexible approach in terms of regulation means that complex legislation can be amended, where appropriate, to accommodate a new business that may be wishing to licence in an area the Isle of Man’s secondary legislation does not presently cover.
Outside of this, companies wishing to relocate also recognise that being on the OECD ‘white list’ is a stamp of approval for the island and further highlights that the island meets the OECD’s international standards on tax transparency and co-operation. The Isle of Man has now also signed 18 tax agreements with other countries that meet OECD standards, and are committed to continuing this program of engagement as well as entering further agreements. This along with its membership of the World Trade Organisation and strong links into the City of London are of particular appeal to e-Gaming businesses.
Over the past 12 months some companies in the e-gaming sector have certainly experienced challenging times with loss of share capital and some major rights issues. However despite the economic downturn the e-gaming industry has shown little signs of slowing and we have been witness to this in the Isle of Man where companies that innovate, seek new developments and move into new markets have prospered.
Garth Kimber is head of e-Gaming development at the Isle of Man Government
