Omnichannel has been talked about in the gambling world for years, but that activity has not yet spread very widely – at least not in the sense what I feel is an omnichannel model. Maybe it’s good to explain what I mean by omnichannel at the beginning. Omnichannel is a business model which combines various sales channels to offer an integrated customer experience across platforms. Omnichannel makes separate sales channels work together for a seamless transition. It means it should provide customers with a seamless journey across all channels — one account in both retail and online, a shared wallet, and a loyalty program.
In the gambling business, you don’t have to worry about logistics, maybe with the exception of scratch cards, so our products are well suited to the digital sales channel. Thanks to this, the share of digital sales in gambling companies’ total sales increased significantly during the 2000s. In practice, almost the entire industry’s growth currently comes from digital channels, where the role of mobile is significant. However, the importance of digital business varies a lot from country to country. That is mainly explained by two factors – the extent of people’s general transactions in digital channels and the gambling companies’ activity in digital sales.
There are also big differences in the three main areas of gambling activity. The growth of the digital business has been best utilised by betting companies, most of which only offer their games on digital channels. The casino business is divided into two entirely separate camps. The companies that have run traditional physical casino operations have only recently begun to expand what they offer to digital channels as well. Because of this, the companies running the online casino business only have gained a significant market position. As a whole, selling casino games on digital channels is a gigantic business globally. Several lottery companies have behaved like physical casinos, i.e., they have been cautious in activating digital sales. On the other hand, some lotteries have already focused on developing digital sales for years with excellent results.
Lotteries’ operations have based on the sale of games in a broad retail network. The games have been available close to the customers; thanks to that, the customer base has become extensive. The positive side of the matter has been the growth of business and the resulting high-profit level. At the same time, however, the role of the retail network has become so critical that lotteries have been afraid of solutions that could weaken agents’ position. Because of this, for years, some lotteries did not take advantage of the opportunities brought by digital sales and gave other gambling operators an edge in the competition for customers’ money.
Fortunately, however, lotteries have not yet lost all their chances to succeed in the competition for gambling customers’ money. I don’t believe lotteries have an excellent chance of succeeding in the competition in digital sales channels. Instead, omnichannel solutions can be the key to success. Apart from a few countries with a strong culture of betting shops, lotteries have the strongest and most expansive retail sales network everywhere. This network can continue to be used as a competitive advantage over other gambling companies, even though all the growth in gambling comes from digital channels. Lotteries must understand the requirements of a changing world and develop solutions where the role of the current retail channel changes from the actual sale of games to the promotion and marketing of game sales.
Today, almost every person already has their own “sales terminal” in their pocket. Customers can easily play all games on mobile phones, especially smartphones. That is an excellent starting point for doing business, as gambling companies can offer customers the opportunity to play whenever and wherever the customer wants. In all business development, it is always necessary to primarily think about the functionality of the services from the customer’s point of view. Omnichannel is a perfect example of a world of thought where everything aims to make the customer’s life easier and thereby increase customer satisfaction.
Lotteries have at least three challenges before a proper omnichannel operation is possible. These challenges relate to the lotteries’ own expertise and understanding, technical solutions, and legislative challenges. The first and second points can be resolved reasonably quickly, and these matters are mainly in the lotteries’ own hands. On the other hand, possible changes in legislation are usually an unfortunately long process. However, the positive thing is that it is probably possible to take the first steps towards omnichannel operations almost everywhere, even within the framework of current legislation.
Lotteries must make a strategic level decision about the long-term goals of omnichannel operations. Companies must understand how omnichannel will benefit their business in the coming years. The starting point should also be the understanding that the companies compete for customers’ money with other gambling operators, but competition does not mean the same as irresponsible gaming. Omnichannel goals must also be communicated to the company’s personnel, the current sales network, and at some point, to customers. Help for all of this is certainly available also from outside the companies.
Omnichannel means gambling operations where digital solutions are utilised in the retail network. Customers must be able to continue playing the same game regardless of where they have bought the game. Customers must also be able to use one payment method for all of their gaming. Technically, things are certainly feasible, but unfortunately, not many real working examples of smooth omnichannel solutions are yet visible. I would say that the matter is talked about a lot and beautifully, but the reality is something else. One key factor in utilising omnichannel is a modern customer system, which can be used to increase customer engagement and loyalty. Increasing and utilising customer satisfaction is, therefore, the critical goal of everything. Fortunately, some excellent tech solutions have already appeared for this.
In several countries, gambling legislation is based on a division between retail and digital sales. In many countries, gambling in the online channel has moved to a license-based system, but at least part of the gambling activity in the retail channel has remained within the scope of the monopoly model. Since the aim of omnichannel operations is to offer customers the same service regardless of where they play, gambling operations cannot be based on two different pieces of legislation. Which legislation is followed if the customer uses a mobile device for gambling, which takes place on the premises of a retail store or at a racetrack? Now that action is online gaming, but what about in a situation where the role of agents is to activate gambling and guide customers to use their own devices?
The situation of lotteries is good in the legislative sense, at least for the time being, because lotteries have a monopoly in their core business, lottery games. In such a situation, companies can utilise omnichannel solutions in lottery operations without major concerns about the challenges of legislation. Not many other gambling companies have that possibility. Since many lotteries have expanded their game portfolio to betting and some even to casino games, it is also to the lotteries’ advantage to have gambling legislation independent of distribution channels. The current legislation, based on the past, will hinder development in the next few years, and such a situation is not in anyone’s interest. I strongly believe in the future of omnichannel, but in all respects, we are not yet ready for it.
Jari Vähänen has enjoyed a long and successful career in the gambling sector, having cut his teeth in the horse racing and betting business. He has spent the biggest part of that time with Veikkaus, the Finnish national lottery and gambling operator, where he was responsible for horse and sports betting business. While there he started digital sale channels, introduced the first customer-based strategy and took care of international relationships and businesses. Having resigned from the lottery in spring 2020, he established The Finnish Gambling Consultants Ltd and is now helping lotteries and other gambling operators and suppliers to further develop their businesses.
