Operators who expect to generate big returns from so-called grey markets will be given a harsh reality check unless they plan for a multitude of challenges and outcomes, according to Keith McDonnell, the chief executive of KMI Gaming.
McDonnell, who was speaking on a panel that focused on the topic of ‘grey markets’ – where gambling is not illegal but is also not regulated – at the World Regulatory Briefing at ICE Totally Gaming today (Tuesday), said that operators had learnt valuable lessons in chasing big bucks only for their dreams to fall flat.
“I think the first thing before entering anywhere is to understand why you are doing it,” he said. “For example, a lot of people think that Southeast Asia is an easy way of making money, but it certainly isn’t. “Over the past couple of years, there have been a couple of companies going to Southeast Asia and coming back with to their domestic markets with their tails between their legs. “You need to have a realistic plan and build a picture. It’s the only way to do it.
“If you decide you want to go ahead, you need to understand product requirements and whether your current infrastructure will support the move. Also, will it put your existing licensing structure at risk? “There is no quick fix or off-the-shelf solution. It really depends on what you want from the market.” Attendees also heard updates about India, from Nishith Desai Associates partner Gowree Gokhale, and Nigeria, which is a “big opportunity”, according to Yahaya Maikori a partner at Law Allianz.
Welton Play Limited director Nathan Walker added: “Moving from regulated to grey markets requires a massive amount of change, and companies need to be prepared for that. Traditional slots are the big growth game in Asia at the moment.” Session moderator Tal Itzhak Ron, an advocate, notary and computer scientist at Tal, outlined the promise of the Israeli market, where he said that gaming-related revenues are expected to increase by 300 per cent in the next two years.