Innovation is a huge topic of discussion across all industries; after all, consumers are always looking for a fresh, new experience, and companies are always looking for new products to appeal to consumers. The gaming industry is not any different, and it’s not holding back.
The Canadian Gaming Association wants innovation and diversification to be a regular topic of conversation to drive awareness of what Canadian companies are creating. While the gaming industry in Canada is often thought of in terms of casino operators, there is another dynamic to the gaming industry in Canada that is quickly moving to the forefront: technology and development.
Some Canadian technology start-ups are exporting new gaming products to global markets, but when it comes to getting their products to work here, innovators can experience the particular challenge of navigating regulated environments that differ province-to-province and being patient with the time it takes to integrate products into the Canadian market. Despite this, two Canadian lottery corporations and one global gaming company are creating new and innovative products to appeal to consumers in Canada.
Atlantic Lottery, Aristocrat Gaming (Aristocrat) and the British Columbia Lottery Corporation (BCLC) are all making strides to boost innovation in the Canadian gaming industry. Here’s a look at what they have achieved so far, and where they plan to go from here.
Atlantic Lottery started developing new products and exploring innovative ideas due to what Jean Marc Landry, Director of Customer Innovation, describes as a slow erosion of lottery players over the last few years.
“The market has evolved drastically over the past 15 years and our industry has not kept up,” says Landry. “People have different expectations for products, and we now operate in a completely competitive environment given the surge in unlicensed operators.”
To combat this, Atlantic Lottery introduced its innovation program in 2015, with the purpose of identifying and developing new products and services to help the crown corporation gain back its relevance with the lottery market in the region.
While in its research stage, Atlantic Lottery noticed many consumer-facing companies operated start-ups at an outpost that would allow them to separate their product development from the various internal processes and requirements that often face large enterprises. Atlantic Lottery released an RFP to open an outpost in Atlantic Canada, and selected Volta Labs through this process.
Through its work with Volta Labs, Atlantic Lottery has released two live market pilots that are currently being tested with the input of consumers, including Winvelope, a monthly delivery subscription service for Scratch ‘n Win tickets, and Pool Party, a lottery group play app. In addition, ALC has two new draw-type games and six digital instants that are currently in development. And, notes Landry, the corporation has also developed an almost-complete digital lottery infrastructure, which features components such as player account management and age verification.
All of these advancements and innovations don’t come without their challenges, however.
“I find that the biggest challenge we have faced is regarding our overall ability to launch these at scale,” says Landry. “We run very complex businesses with IT integrations into a few dozen vendors. So getting something across the line into our corporate systems requires a lot of work.”
There are also some regulatory issues that come into play. Although Atlantic Lottery’s Nova Scotia shareholder and regulator have both been very supportive of the innovation program and its initiatives, many of the products Atlantic Lottery has thought up tend to be a combination of lottery and other regulated industries, such as banking. Landry says that this creates complexity, as Atlantic Lottery must develop and understand the regulations in both industries, and must build business models to comply with the regulations in both.
Dealing with these challenges has helped Atlantic Lottery reap some rewards in the process. For one, a retrospective recently completed on the innovation program found that the company is now far quicker to develop new concepts, and the company believes it is leading industry change as it relates to innovation and competitive renewal.
Coming up next, Atlantic Lottery has about 30 initiatives in the development process, with the goal to bring four or five of these to market within the next three years.
“All players involved in this industry need to rally together in order to effect change,” adds Landry. “What worked for us in the past won’t continue to work, and we need to create a new model for the gaming ecosystem. Lottery 2.0 is here.”
For Roberto Coppola, Vice President of Advanced Products at Aristocrat, the ability to change and adapt over time marks a great organization. A leader in both land-based and online gaming, the company places an emphasis on maintaining a culture of innovation throughout the business.
“That means being open to new ideas and recognizing that the ability to change is what keeps great organizations on top over extended periods of time,” explains Coppola.
In an effort to cultivate that change, Aristocrat looked inward when deciding to develop new products, introducing its thinkBIGGER program. “Aristocrat has taken the time to invest in and develop an extraordinary culture that truly values and respects everyone’s contributions. We have this very deep and energized talent pool of 5,000 employees around the world that is continually stuffing our suggestion box with great ideas,” says Coppola. “We’ve harnessed that energy by formalizing the way we incubate and accelerate ideas through vehicles like our innovation accelerator called thinkBIGGER.”
The thinkBIGGER program has led to ideas relating to all aspects of Aristocrat’s business being funded. “Interestingly, many of the ideas submitted to our thinkBIGGER program at Aristocrat are aimed at onboarding new gamblers, presumably (but not exclusively) younger,” says Coppola.
He adds that engagement and participation in the thinkBIGGER program surpassed the company’s expectations, but says the most important thing to have come out of the program is the fact that the company is funding and developing some great concepts.
“Most of the concepts we’ve funded to date have been adopted into formal development planning by various portfolio stakeholder groups within the business,” says Coppola. “Our batting average is way beyond what I would have expected and much higher than most tech accelerators.”
Coppola describes the thinkBIGGER program as an iterative process that is adapted based on what happens at various stages. The annual program launched recently for 2018, and the company is looking to receive some more great ideas from company employees. Coppola says the race against the clock is the biggest obstacle the program faces.
“If the aim is ‘pencils down’ come the end of the year, it doesn’t leave us with much time to develop the concepts we have decided to invest in,” he explains. “Teams are also often spread across the world, and while that brings lots of positives, it can also create challenges when it comes to staying aligned throughout the project.”
As a whole, the regulatory environment of the gaming industry can cause challenges when trying to get a new or experiential product to market quickly, says Coppola.
“Getting things out there and being able to iterate as fast as possible, based on a market reaction, is really important. We also need to do a better job working with operators to align on different success metrics with new types of products, especially those aimed at onboarding new gamblers,” he says.
He warns that while it may be tempting to hope the status quo carries the industry forward eternally, history has shown that those who cannot change, cannot survive.
Looking forward, Coppola says some emerging technology could be game changers in the industry.
“Experimenting with these will be a key piece of the puzzle for sure,” he says.
British Columbia Lottery Corporation
Richard Fenster, Director of Corporate Strategy at the BCLC, finds that history has shown many great examples of innovation within the organization. Fenster points to the launch of PlayNow.com, the first regulated gambling website in North America, and the launch of GameSense, an innovative way to communicate responsible play information to consumers, as two examples.
The BCLC is placing a special focus on improving the player experience overall, whether around a new product or experience, an enhanced experience or perspective or even from a player health perspective.
One avenue the BCLC is exploring is the creation of a virtual reality escape room game called Heist, which was developed by Vancouver-area start-up Archiact. The game uses VR to simulate a real-life escape room game experience. This early-stage idea is still being tested with players, but Fenster says there is a possibility this concept may be found in a casino environment down the line.
Fenster says part of the reason why the BCLC decided to start diversifying the gaming industry in B.C. is to appeal to players to grow the business.
“We have to look to not just the customers that we appeal to today, but we know there are players out there that aren’t opposed to gaming, but we don’t really have the content or experience that really excites them,” says Fenster. “There’s opportunity there but it’s about finding the right thing that appeals to them and their needs. We saw that as an opportunity and an area worth our investment.”
In addition to Heist, the BCLC is currently testing what they call a real-world adventure game called Geo. The aim of the game is to complete missions in order to earn entries into draws. Currently a free-to-play game, the concept is being tested with the possibility of adding a gambling mechanism to it down the line.
Fenster notes that Geo is receiving a lot of positive feedback, but more importantly, the BCLC is finding that Geo players that are enjoying the game are often less frequent customers, which means it has succeeded so far in attracting a whole new group as a customer base.
Fenster notes that, over time, the BCLC has had a lot of ideas that seem great in theory, but don’t necessarily translate well into viable business opportunities and customer value propositions.
“What we’ve tried to focus on is building a process that allows us to first understand the customer needs that we’re trying to satisfy, so the ideas are the right ideas that serve the needs of the customer,” he says. “Being able to test and validate whether those ideas actually relate or not, before we bring something to market. To me, the big successes so far come with learning as we go through that and being able to find ideas that clearly resonate with the needs of players.”
One learning curve the corporation has had to overcome is learning how to work with start-ups because of the sheer difference between a small business and a crown corporation, where many business decisions and budgets are often planned months, or even years, in advance.
“There’s an inherent difference in pace that goes along with being a company of our size, versus a company of theirs. So learning to work together is definitely a learning curve,” says Fenster.
The BCLC recently opened itself up to working with smaller businesses to help bring about innovation. For example, it took part in Vancouver Startup Week, with a competition inviting small businesses to submit ideas with the aim to work with BCLC on developing the idea, which is how the BCLC teamed up with Archiact on Heist.
Coming up next, Fenster says the BCLC has several ideas in the research stage, but they plan to focus on the concepts already in their pipeline. “There’s two components to any concept going forward. One is do people like it and two, is it a viable business opportunity? We need to be able to get through that evaluation for anything to move forward,” says Fenster. “Once we cross that threshold we know we’ll have something viable in the marketplace.”
The innovations that will be seen in the Canadian gaming industry are all being created in Canada, to be used by Canadians. They are all being made to appeal to new customers, that otherwise may not have been interested in the games on offer. Recognizing that the industry has remained at the status quo for quite a long time, the industry is making strides to create change and diversify the Canadian gaming industry to keep things fresh and appeal to new and old customers, alike.