Life in the fast lane – three lessons learned while launching in the hyper growth US market17th February 2022 10:19 am GMT
Erik Nyman, President Americas, EveryMatrix, gives an exclusive insight into his experiences since setting up a new office in Miami and how a new wave of technology companies are emerging in the booming US market, ready to feed the appetite of a content hungry audience.
Late summer 2018 was a landmark moment for the industry opening the floodgates for brands and suppliers to offer US customers online betting and gaming. Since then, revenues have exploded with multiple states setting new records at the end of 2021.
But as we know from the brands that lead the way today, first isn’t always best and with half the country still to regulate, iGaming is yet to take off due to slower regulatory progress. As Ontario, Canada, prepares to go live with arguably the biggest potential in North America, there is plenty of room for new entrants.
EveryMatrix is a well-established force offering the full gamut of advanced betting and gaming software, all developed in-house, including a full turnkey solution. We deliberately took a stepwise approach in the States, transforming the company to full readiness and settled some strategic deals in the meantime. Following 14 months of groundwork, intensive research, competitor analysis and preparation across licensing, localised products and integrations, we are about to press the go live button with a series of commercial partnerships.
So, what have we learned since we set up an office in Miami to services both North and Latin America?
Adapt to new ways of working
For any company moving to the US market, challenges exist, and you must adapt to new ways of working. This means establishing close working relationships with regulators, getting the right local team in place and transforming the company to be more US focused with specific US reporting structures to make sure we have everything in place to go live.
It is vital that product is localised specifically to US players’ tastes, especially gaming content. This is why we set up Armadillo Studios – an iGaming development team dedicated to creating and delivering content that we know US players love and will continue to play. The Armadillo team know the market inside out led by our Creative Lead & COO David Stoveld, who is behind some of the most successful US slot games in the US market. We also know branded content works especially well here so we are busy working with and signing several well recognised Tier one brands and individuals from US sports, music, and popular culture that we know will work.
Culturally there is a big difference, and you must absorb and tune into that straight away to get to know your customers. For example, jackpot games require localisation as state population plays an important role. In the home country of slots, we also know that US players overall are higher in value, meaning we have to develop new retention strategies and mechanics to meet their needs.
European and US firms are ideal partners
Ever since I moved here, I often hear the same stereotypical opinion from certain European industry professionals: ‘we’ know how to run an online gaming operation, but ‘they’ don’t. This is far too simplistic a viewpoint and the more you learn in conversations and start working together the more you realise we are a natural fit. Yes, ‘we’ have many more years’ experience and there are some knowledge gaps on the US side in running an online business, but we equally have knowledge gaps in US compliance, the differences between European and US sportsbooks, how to structure and offer US sports and how to tap into very specific US fan cultures across multiple states, many of whom are more tribal in nature, while others are more interested in following star players than teams.
There is also the myth that somehow the US is further behind when it comes to online. Our experience is that state legislators embrace gambling and actively work to build a long-term successful business including safeguards like geolocation, which was first launched in the US. The growth of the market also suggests a more successful online operation than European countries as with only a handful of states live, the US market will outgrow Europe shortly, with far less people.
Outsourcing will only grow as time goes on
Many states have set revenue records of late and individual brands are equally flying high, but at what price? If we look at the top five US online operators, some are spending more than $1bn annually on customer acquisition. In addition, they are bringing technology in-house which means scaling resource and building large teams. Talent, however, comes at a premium and it’s expensive to hire staff in the US. All these costs are stacking up and we are already seeing signs of discontent from investors who have criticised levels of marketing spend and profitability, with many large operators in need of rethinking their long-term strategies.
I believe these costs will soon become a heavy burden and that the pendulum will swing from insourcing to outsourcing technology, with established suppliers ready and waiting to integrate advanced solutions and drive efficiencies and revenues. There is so much you can focus on, and I believe that in a mature market the spotlight for operators will fall on player acquisition, management, and retention, while suppliers will take care of the technology needed to succeed.
The investor community, which has already issued its challenge over profitability, will also understand that outsourcing will generate more efficiencies and, with the right partner, a superior product. This process has proven to be successful already in Europe, where several Tier One operators rely on EveryMatrix for key parts of their platform. We are confident that approach can be replicated in a mature US market, for the benefit of all stakeholders.
About the Author
Erik Nyman has more than ten years of experience in executive positions within the online gaming business. He is specialized in new market entries and strategic deals and is recognized and respected for his leadership skills and business acumen. Erik´s most recent position for the last five years was launching a casino supplier to become a leader in the U.S. market. Now as appointed President Americas, Erik is set to expand EveryMatrix's footprint in emerging North American and Latin American markets.