Europe paves the way for Asia’s maturing online market

Faced with increased competition and more demanding customers, Asia’s online operators are looking towards Europe for ways to drive revenue growth in a market that is beginning to mature.

Previously, operational demands in Europe and Asia have differed significantly. The challenges operators faced in highly regulated, intensely competitive jurisdictions such as the UK or Italy were a world away from those active in Asia’s grey markets.

However, AGB understands that tightening margins at many of Asia’s biggest online operators are forcing strategies to be re-evaluated.

Many of these strategic shifts mirror those undergone in Europe over the past five years: greater focus placed upon retention than acquisition; operators competing on product rather than marketing; and a greater emphasis on customisation, personalisation and differentiation.

“The days when it was enough to roll out a standard, European-style, English-language website into Asian markets and expect it to succeed have gone,” Joe McCallum, director of sportsbook at told AGB. “Customers in Asian markets are now far more discerning.”

Online sportsbook is perhaps the vertical which highlights the progression of the Asian online market towards maturity better than any other. For many years, customers were serviced by simple online sportsbooks offering a narrow range of betting markets, with volume dominated by handicaps.

This has now changed, and the most successful sportsbooks are now doing significant volumes across hundreds of markets and extensive in-play options, in much the same way as their European equivalents.

“It is a lazy assumption to say that customers in Asian markets are only interested in the handicap. While it does remain an important part of the mix, we’ve witnessed the tastes of average customers diversify significantly in recent years,” McCallum said of “These customers are now demanding a range of markets equivalent to what European users are accustomed.”

It has been a similar story for the casino vertical.

“Asia’s online markets are evolving extremely quickly; and operators and suppliers are certainly in a position to take the best Europe can offer and adapt it for new markets,” said Matthew Rochman, head of technology at online games developer OneTouch.

Rochman picked out the example of mobile gaming, but warned that “it is not as simple as Asian markets mirroring the dominant trends in Europe”.

“In Europe, most markets transitioned gradually from desktop gaming to mobile gaming. It has been a process that has taken several years, and only recently has mobile become the dominant channel for most operators,” said Rochman.

“As Asian gaming was not as firmly established years ago, many new players in Asia are accessing sites and games for the first time on mobile and tablet devices, rather than desktops. In fact, a great deal of the growth in Asia will come from customers who have never played online casino on a desktop. As a result, the way we design games needs to take this into account,” he added.

While Europe may provide inspiration for operators facing new market realities in Asia, others caution that it will not necessarily provide one-size-fits-all solutions.

“The blueprint doesn't work, and the more rigid it is, the less it’s going to work. I have seen very large gaming companies in casino, lottery and sports miserably fail to enter Asia due to a business model that wasn't fit for Asia. You need to adjust, be flexible and, most importantly, choose the right people to work with in Asia,” Omri Goren, who has worked in Asian gaming for 10 years and consults for many of the sector’s biggest companies, told AGB.

Goren warned that Asia’s online operators have so far remained slow to catch up with European counterparts. It may be the case that the basics still need to be resolved before tackling the challenges traditionally associated with a mature market.

“While new players in the region definitely look sharper, cleaner and more versatile, we are still seeing the older (and very large) companies stuck 15 years in the past,” said Goren.

According to Warwick Bartlett, CEO and founder at Global Betting & Gaming Consultancy, it can be tricky to define exactly what stage the Asian online market has reached. “In terms of volume Asia is already quite mature relative to the volume coming out of Europe. Profit margins are low but this is compensated by volume leading to high net profit before tax,” he told AGB.

With Asian markets remaining a long way from adopting UK-style regulatory frameworks, it is unlikely that 2018 will see a significant acceleration of many of the trends typically associated with mature markets, such as consolidation via M&A activity.

But operations will likely adapt to better match the efficiencies operators in Europe must deliver to remain competitive.

Asia-focused platform provider SA Gaming, for instance, said it believed the future of igaming “is tied to personalization, effective data and marketing tools and successful customer relationship management (CRM)” - areas that have traditionally been neglected by Asian operators more focused on acquiring new players than retaining and maximising the value of existing ones.

On product too, McCallum at said the operator is witnessing growth in personalized, custom betting from Asia, where players select the nature of the bet and have full control on how they place the wager. “In Asia, as in Europe, product innovation is now a key battleground,” he said.

It is clear that even if Asia’s online market does not yet match the maturity of Europe’s, only those operators willing to adapt to these new challenges will succeed in the long run.