The agenda for the upcoming AiG Congress 2008 in Macau naturally contains sessions on the most important and pertinent topics for understanding the I-gaming market in the Asia-Pacific region. For new entrants into this developing market, knowing about the regulatory situation, successful advertising strategies, the complexities of payments and gamblers’ preferred games is essential to creating a profitable business.
But underlying all of these different areas are the broader and less tangible concepts of trust and reputation. Of course, building consumer trust and establishing a strong corporate reputation are crucial in markets across the world but they have an added importance in Asian cultures.
When online gambling is stripped down to its barest elements it becomes obvious why trust is so important in this sector. Customers are being asked to deposit their money up front with a Web site (which they may know very little about, if it is a new company) and, depending on the outcome of an event (either a live sports event or one determined by random number generator (RNG)), they trust the Web site to pay them any winnings.
Indeed, the stimulus for the development of ‘live-dealer’ online casinos was precisely because gamblers in Asia did not trust the standard RNG-driven online casinos. Asian cultures, particularly China, place great emphasis on face-to-face contact. In a professional context, people like to build a good relationship with someone before they do business together.
For online casinos one way of trying to provide this personal contact is through live dealers. By comparison, European and U.S. players seem to more readily accept the independent audits that are conducted on RNG-based casino games.
This trust and building of relationships also extends to sports betting. Betting on credit was traditionally very popular, whereby a bettor would place his bets through an agent, with whom they would build a relationship over time. Ironically, credit betting often suffers because of the mounting bad debts of the agent’s credit clients and so their agents decide to switch to deposit betting instead -- trust works both ways!
A cash market
In societies that are predominantly cash-oriented, concerns about making transactions online is another key issue. It is estimated, for example, that in places like Japan, Thailand and Taiwan over 80 percent of all consumer payments are still made in cash.
A recent Euromonitor report about the Chinese online payment market estimated that there were 40 Internet payment sites in operation. In addition, with the total value of online spending estimated to grow from RMB 276 billion ($35 billion) in 2006 to RMB 364 billion ($47 billion) in 2007, it would suggest that Chinese consumers are becoming more comfortable paying for items online [see footnote 1. -Ed.]
Online consumer confidence
The China Internet Network Information Center’s (CNNIC) latest survey into Internet development in the country contained a survey about making online travel reservations. While not directly linked to I-gaming, it does highlight some interesting responses from online consumers.
When asked for their reasons for choosing to make reservations online (more than one answer allowed), 46 percent said it was convenient for payment (fourth-highest answer out of nine listed). But just 16 percent of respondents said it was because they could pay safely online (eighth-highest/ninth-highest). Does this suggest that, while consumers acknowledge the convenience of e-commerce, they are still wary of its security?
On elements of online reservations that were not satisfactory, the highest percentage of respondents (43 percent) were those people who said too much personal information was requested when registering an ID. This should give I-gaming operators pause for thought.
In the United Kingdom, some of the most trusted online gambling brands are those that also have a long-established "bricks-and-mortar" business in the form of betting shops.
New online operators are also seeing the benefits of using offline activities to give a "physical form" to their brand. This has involved the sponsorship of sports events, teams and poker players, as well as the organization of offline tournaments to enhance their reputation and build consumer trust in the brand.
Specifically in Asia, Betfair hosted its Asian Poker Tour in Singapore, while MaharajahClub.com held the Asian Poker Classic in Goa, India.
More recently, The World Poker Tour started a nationwide Traktor tournament in China in October 2007, while PokerStars.net ran the Asia Pacific Poker Tour which involved four tournaments in the Philippines, South Korea, Macau and Australia.
Consumer trust and a good reputation are hard-won and all too quickly lost. Unfortunately, unlike advertising space, a flashier suite of online casino games or a new payment method, they cannot easily be bought.
But I-gaming’s general business model combined with the inherent nature of the market mean that trust and reputation are essential components for any operator that wants to be successful in Asia.
- (1) As some measure of comparison with the Chinese market, the U.K. payments association APACS estimates total online spending by U.K. consumers in the month of December 2007 alone totalled $11.1 billion.