This summer’s football World Cup in South Africa not only represents by far the single most concrete commercial opportunity for the egaming industry this year, but also a focal point for the most significant period of development for Europe-facing sports betting platforms since the birth of the online gaming industry.

The overall boost to betting activity reaped by the industry from the month-long event kicking off in Johannesburg on 11 June will inevitably hinge on results, with gross win potentially hit hard by too many predictable results in the group stages, and in the case of UK-facing sports books, an England win, which could cost the bookies millions.

However, the industry’s exponential growth since the last World Cup in 2006, along with the convergence of the increasingly dominant live-betting offerings with match timings means operators are confident this World Cup will “break records in terms of turnover and new clients”, according to Sportingbet’s head of sportsbook, Marc Thomas.

He explained: “The vast majority of our customers are based in Europe so the times of the matches are exactly when they would expect to be betting. As we found when the World Cup was held in Japan and Korea in 2002, betting at 6am is not a natural thing for most of our punters.”

However, while the World Cup is set to boost active bettor numbers by more than 20% above normal levels during the quarter in which the tournament falls, according to H2 Gambling Capital (see box out opposite), a measure of how far operators’ retention and loyalty programmes have advanced since the last World Cup in Germany in 2006 will be how many of these active customers they manage to keep live and betting with them once the tournament is over.

“There is a highly attritional nature to online sports betting, and the choice to a punter sitting in whichever country is now massive. Our platform is geared to offer as many bets as possible around as many different games as possible. Then the challenge for us and the rest of the industry once the World Cup is over is to get these people betting on the major European leagues as these come back on-line in August,” says Thomas.

However, the explosion in markets, products and technologies underway in the online sports betting space is not restricted to the sports books turning over the largest volumes of in-play transactions in the European market, which include Bet365, Sportingbet and Bwin.

The availability of fully managed white label sports books from providers such as OddsMatrix, Global Betting Exchange and more recently Playtech is driving the take up of betting platforms among standalone poker rooms and casinos aimed at increasing revenues, stickiness and cross-selling capabilities during the World Cup and beyond.

On the marketing front, Stephanus Tekle, senior consultant for leading European sports marketing consultancy Sport+Markt highlights that the betting bans which will still be in place in key European markets such as Germany and France when the tournament takes place will present operators with challenges.

“This has already caused a few problems in terms of sponsorship and probably will force the betting companies not to use the classical advertising tools,” said Tekle, with the affiliate channel set to retain its importance in these markets.

Indeed, while it’s a little early for Europe’s operators to show their marketing hand for fear their ideas could be replicated by the competition, early indications are that the marketing arms race among online operators which occurred around the last World Cup will be less all encompassing this time around.

Unibet, for instance, which holds high-profile football team and league sponsorship deals in Spain and Poland, revealed last August it was to keep marketing spend stable at 35% of gross win in the second quarter of 2010 ahead of the tournament.

Chief executive Petter Nylander explained: “We will be doing what worked well for us for the European Championships last year; building up the client base and brand credibility, and then reactivating the client base when the event comes around. It’s much more cost efficient.”

So the World Cup looks set to provide a welcome boost to gross win for the industry, which suffered in the second half of 2009 from an unfavourable run of Premier League football results and UK horse racing cancellations.

However, it should also be seen as part of a broader expansion of sports betting into new verticals, constituencies and geographies, as operators prepare to do battle in what is set to be a critical year for both protecting and building market share.

Of the factors eGR sees as playing a defining role for the sector in 2010, regulation certainly has the potential to be the most transformative, but also by far the most difficult to predict.

The first of these was that the opening of the French online sports betting market looks unlikely to occur until after the World Cup due to the draft bill being held up in the French Senate.

Second, it emerged that Belgium plans to implement a dot.country model for online poker. And finally, UK Sports Minister Gerry Sutcliffe announced plans for a new licensing system for all operators targeting the UK, ostensibly to more effectively control problem gambling and to generate income for the UK horse racing industry.

Thus while this summer’s football World Cup looks set to provide a welcome fillip to sector revenues and a focus for the growth and penetration of sports betting into new verticals, constituencies and geographies, how the two crucial underlying trends of regulation and consolidation transform the sector by year’s end is far harder to call.

Read the full article on www.egrmagazine.com