Grey market challenges, India opportunities aired at iGA

The challenges presented by Asia’s grey markets and consumer demands for quick-fix gambling solutions were among the key issues addressed at the iGaming Asia Congress in Macau last week.
Experts provided views on topics ranging from the perennial lure of China, to the “sleeping giant” that is India, as well as outlining opportunities in fledgling markets such as Vietnam.
Each have their own key cultural differences, customer preferences and unique challenges as far as regulatory bodies are concerned, but the common thread throughout the Asian customer-base – and a trend worldwide – is the need for “instant gratification” in gaming, according to Tom Light, SBTech's vice-president business development & commercials.
In a panel discussion on new products, strategies, technologies and markets, Light not only called for more “minute-by-minute” bet types in sports, but also for matching the product with fast turnarounds in payment times so that players can re-invest.
“The punters of today want live gaming,” he said. “And within 30 to 60 seconds they want their bet settled.”
The potential for online gaming in China is always a hot topic and a veteran of the scene, Ladbroke's Beijing-based general manager for China, Michael Charlton, called for calm after a year of upheaval caused by political machinations.
Last year a government edict forced a moratorium on online lottery sales and resulted in what some have playfully labeled “the first time in 5000 years that overall betting revenue in China has fallen.”
After several consecutive years of double-digit growth, Charlton put perspective on a four-percent dip in gambling revenue, and said the increased government scrutiny that came with the temporary online ban was a positive for the industry overall.
“Short term pain for long term gain can be an old cliché, but in this case it is true, especially for foreign operators, for whom China can be an alien market, so this is a positive step – it's made the path you need to follow much clearer,” he said. “It is very easy to be negative about this situation, but a lot of the noises are very positive – it's misleading to talk about negative growth when you put it in perspective, because we have a market preparing for regulation. The numbers don't tell the whole story, put into perspective with everything that has happened in China and the industry overall, they are actually pretty solid.”
Experts backed this assessment by pointing to the fact that share prices of companies connected to the lotteries industry are holding firm.
“These companies are all still there innovating, still making revenue, all with the expectations that this market is going to open up again and regulate," Charlton said. "When that happens it will be far bigger and healthier than it was before – and it was pretty big already.”
Experts then gave views on India – a country where black-market betting on cricket dominates the online landscape.
The overall takeaway from the session on India was that there is tremendous scope for growth in the world's second most populous nation. But IndiaBet's general manager George Oborne offered the most simple and direct advice for those looking to break in: “Get stuck in and get on the ground in India, not much can be achieved from London.”
David Leppo, CEO of Cambodian-based sportsbook FootballBet provided some of the most refreshingly honest views at the conference and labeled India as Asia's “sleeping giant” of gaming.
“There has been that obsession with China, and rightfully so, with the way the middle-class has blossomed – 15 years ago there was no such thing as a middle class in China and there has been a tremendous amount of disposable income there,” he said. “But, there is a huge amount of disposable income in India as well. The difference is that India truly is an underground market that is run by organized crime and the police. A huge percentage of the action is underground betting on cricket and football.”
Leppo is a veteran of the sportsbook game and offered some words of warning for operators looking for a cheap license from under-developed regulators in fledgling jurisdictions.
“The technological back-up might be there – but as far as compliance and back-up from regulators is concerned, we are still operating in the stone age,” Leppo said during the session “Operating in the grey market: Practical Considerations.”
“As a grey market operator you are automatically dealing with other grey market operators, whether it be agents, junkets or punters, and the bottom line is if they don't want to pay you, they are not going to pay. If that happens, a grey market operator really has no recourse – there are no resources with their regulators or their compliance people to go after people and help collect money. If you are a grey market operator dealing with an agent or junket operator and you have issued them credit, and all of a sudden they don't want to pay, there's no one to call on.”
Industry veteran Shaun McCamley, now based in Vietnam as Asian head for Global Market Advisors, said that despite some recent regulatory hurdles, the outlook is positive there – but mostly for more potential land-based operators.
“The Asian market is shrinking – so where can you go in reality? Macau, even with its problems, there are no more licences, Japan and Taiwan are some time in the future, so what is available? Vietnam was on a lot of people's radar – but it dropped off when the government wasn't as supportive of new investors."
McCamley said that unrealistic demands were asked of operators including massive up front capital and restrictions on locals being able to play - but he noted a recent political shift.