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New bingo sites - what to expect in 2017

Regulatory and tax changes continue to have an impact on the world of online bingo - here's what we think may be coming in 2017 (and here's how our 2016 predictions actually worked out)

  1. Bonuses an endangered species
  2. Offers given to existing players as well as new ones
  3. Short bonus expiry times
  4. Free bingo under threat
  5. More inventive existing player promotions
  6. More mergers and acquisitions creating a marketplace with fewer bigger players
  7. UK CMA to crack down on unfair terms and conditions
  8. UK GC to bring in tougher enforcement policy
  9. Further regulation of advertising
  10. UK ICO crackdown on spam emails and texts
  11. Brexit related industry worries
  12. The clock is ticking for Flash
  13. Even more big link bingo
  14. Even less charity bingo
  15. The decline of chat
  16. More new bingo variants
  17. More focus on slots
  18. Increasing use of social media for promotions

Bonuses an endangered species

HMRC have recently finished gathering responses to a consultation about the taxation of free bets.  This was carried out as a result of the proposal in the 2016 Budget to bring the tax treatment of online free bets - including bonuses and free spins - in line with that in betting shops and other land based venues. The new regime is scheduled to come into force in August 2017 and essentially it will mean that online bingo operators (and other online gambling operators) can't offset the value of bonuses they give out against their profits for tax (only the value of cash winnings from the bonuses). As a result of the consultation a concession has been made for bonuses which carry a wagering requirement, so that only the initial use of the bonus and the eventual winnings after the wagering requirement has been completed will count for tax, and the intermediate playthroughs and winnings will not count. In the case of some operators that have a history of giving out enormous bonuses, however, this could still result in a much bigger tax liability than they currently have - if they continue to hand out bonuses at such a rate.  Indeed, the new taxation rules are expected to bring in over £300 million for the Treasury in the first four years (although of course this will not all come from bingo sites).

We were already seeing the decline of automatic redeposit bonuses and this is likely to hasten their end.  Redeposit bonuses these days tend to be given out as part of specific time limited promotions and/or offered to selected players only via text or email. For example, redeposits at Foxy Bingo used to attract an automatic 50% bonus but this is no longer the case (and caused a lot of people to get quite angry on their Facebook page).  To collect bonuses at Foxy these days you need to visit the site often, pay attention to the emails they send you, read the free magazine they send out in the post and watch out for their messages on social media.  Giving bonuses out like this also enables bingo sites to give out fewer bingo bonuses and more slots bonuses.

Offers given to existing players as well as new ones

This has been going on for a long time, of course, but as far as bonus offers are concerned the offers to existing players were a pale shadow of those for new players.  In the summer and autumn of 2016 a trend started at Virtue Fusion sites whereby a no deposit bonus was made available to all players, old and new.  The twist was that the £10 wasn't given out in one go, but over a week or so as 5 lots of £2, each of which had a 48 hour expiry - so players had to keep coming back and playing.  We expect to see more of this.  We also expect to see more of the type of promotion which awards a bonus based on an amount of cash play rather than requiring a deposit.

Short bonus expiry times

The majority of bingo players probably have a couple of bingo accounts they play with occasionally, that have some leftover bingo bonus in them.  If a bonus never expires, there is no urgency to use it up, nor is there any urgency to play through a cash deposit in order to get access to the bonus (as most sites use cash before bonus, the bonus won't be used for ticket purchases if there is any cash in the account).  Not only are many more sites now imposing a time limit, but these are getting shorter and shorter; 30 days used to be common but now it is often 7.  Let's say the player deposits £10 and gets a £30 bonus.  If cash balance is used for ticket purchase before bonus, and the bonus expires in 7 days, that means that in the first 7 days of play the player has to play through the £10 and any cash winnings from the £10 before they even get started on the £30.  A new player who takes a while to find their way around the site, or is lucky enough to win early on, may run out of time to use the £30.  Similarly a player who has cash in their account and gets an extra free bonus via a promotion, will be unable to take advantage of the bonus before it expires unless they first spend all their cash.  While this is extremely annoying for players, it is clearly beneficial for the bingo sites as it encourages the players to spend more money faster.

Free bingo under threat

The new taxation regime is also set to have an impact on some free bingo games.  As long as the tickets are free to everyone the position won't change, but in the case of a game where some tickets are paid, tax will be payable on the free tickets based on the face value of the pay tickets.  Games that could be affected include the Cozy free bingo room where extra tickets can be bought for 1p each and the Dragonfish Big £10K, where tickets are given away free to depositors but can also be bought for £10.  It is not clear whether that Virtue Fusion favourite, Free or Superbooks, will be affected; we think perhaps not as the pay tickets in these games have different prizes to the free tickets.

More inventive existing player promotions

If there are to be fewer bonuses on offer bingo operators may seek to attract and retain players by running other types of promotion instead.  Prize bingo games and prize draws with cash or tangible prizes are an obvious alternative and some other possibilities are multi-level games and escalator jackpots.

More mergers and acquisitions creating a marketplace with fewer bigger players

This is going on at both ends of the market. At one end we have the two new megabookies, Gala Coral Ladbrokes and Paddy Power Betfair, and on the other, the ongoing acquisitions activity of 8 Ball Games and their purchase by Stride Gaming.  It's not confined to the online bingo arena either; Playtech recently bought ECM Systems who provide electronic systems for use in bricks and mortar bingo halls.

UK CMA to crack down on unfair terms and conditions

The UK Competition and Markets Authority is the latest government organisation to put the boot in to the world of online gambling.  The investigation started in the autumn of 2016 and we have yet to see what the conclusion will be, but it is based on concerns raised by the Gambling Commission about "potential breaches of consumer law, including misleading promotions and unfair terms, being used by firms to block players' payouts" or in the words of the Gambling Commission's Chief Executive "concerns that many of these (operators) appear to bamboozle rather than help the customer make informed choices".  "Complex and strict requirements...that are difficult to understand and may be unachievable" and "terms that require people to play for longer than they had bargained for before they can withdraw money" are some of the things being investigated and this almost certainly refers to excessive wagering requirements and other withdrawal restrictions.

>UK GC to bring in tougher enforcement policy The Chief Executive of the UK Gambling Commission, Sarah Harrison, made a speech in November 2016 outlining her vision of the future of the UK gambling industry as the most trusted and respected in the world, with customer service rivalling that of John Lewis.

As well as upping their game on social responsibility and the prevention of money laundering, the GC is concerned about whether operators are treating customers fairly.  They have seen an increase in the number of complaints of over 300% in the last two years, receiving over 40,000 emails and nearly 37,000 phone calls in the 12 months immediately prior to the speech being made!  The top areas of concern are:
  • self exclusion
  • withdrawal of customer funds
  • terms and conditions
  • advertising and marketing

Also in the same year, 8000 disputes between gambling operators and players have been referred to Alternative Dispute Resolution - and goodness knows how many more complaints were made directly to operators!

This excessively large number of complaints has led the GC to crack down, partly via work with the CMA and ASA as described elsewhere in this article and partly via the licensing system.  Hitherto, the GC has preferred to pursue compliance through "means that stop short of a licence review, in favour of a regulatory settlement".  In plain English, they have been fining operators for bad behaviour rather than considering taking their licence away - and this has resulted in some big names having to pay some very big fines.  In future - and that means for any breaches after the start (not the finish) of the consultation - suspension or cancellation of operator (and personal) licences will NOT be off the table.  Furthermore, fines are set to get even bigger, especially for repeat failings.  The new regime is expected to be in place by April 2017.

This is all great news for players BUT there is one potential danger for online bingo.  Although there are hundreds of online bingo sites for UK players, they do not all have their own licences as in most cases it is the network/software that holds the licence. What that means is that if someone were to mess up so badly that their licence ended up being revoked, it could have a disproportionately large effect on the bingo marketplace. The vast majority of UK bingo sites operate under one of just four licences - Virtue Fusion (Alderney) Limited, 888 UK Limited, Cozy Games Management Limited and Jumpman Gaming Limited - and if there were to be a regulatory problem with one of these a lot of bingo sites could go offline in one fell swoop.

Further regulation of advertising

For quite some time now, gambling adverts on TV have been restricted till after the 9pm watershed but there are exceptions for bingo adverts and sports betting adverts during televised sporting events.  At the beginning of 2016 a further restriction was put in place meaning that all ads must end with a socially responsible gambling message and welcome bonus offers cannot be advertised until after the 9pm watershed (this is in addition to all the already existing rules about content banning anything likely to appeal to children, featuring anyone under 25, suggesting that gambling is stylish or a route to riches, etc etc).  Rumour has it that a total ban on pre-watershed gambling advertising is in the pipeline and if it is we should hear about it early in 2017.  The Daily Telegraph has speculated that this could also apply to social media and it would be logical then for it to be extended to other online advertising including YouTube.

UK ICO crackdown on spam emails and texts

Yet another UK government agency is going after the gambling industry!  This time it is the ICO (Information Commissioner's Office) which looks after data protection, and what they are seeking to tackle is unwanted communications to players - emails, texts and sometimes even phone calls from operators themselves and from third parties to whom the contact information has been passed without the consent of the player in question.  This initiative has a very long way to go before it becomes effective but even a small reduction in the spam problem will be very welcome.

Brexit related industry worries

Several months on from the Brexit vote, there continues to be a question mark over the future of Gibraltar.  The only thing that is yet clear regarding the manner and timing of the UK's departure from the EU is that it could take years before everything is properly sorted out!  Gibraltar is important to online bingo as it is where many operators including 888 were licensed in the days of the whitelist, and are still at least partially based.  Not knowing how cross border trade and employment would work (if at all), plus worries over Spain attempting to gain influence or even take over, is extremely unsettling for operators with bases of operations there.

Another important base of operations for the industry is Malta and although one of the official languages spoken on the island is English and there is a sizeable British expat population, the republic of Malta is part of the EU as a country in its own right.  At the moment it is easy for UK nationals to move to and/or do business on Malta (albeit more expensive than previously, due to the weakness of sterling) but after Brexit this is likely to become difficult or even impossible and in the case of a super hard Brexit, UK nationals currently based on Malta might be unable to stay there!  Again, this prospect is extremely unsettling for operators.

Although none of this will have any immediate and direct effect on online bingo, operators with Brexit related jitters are likely to keep a close watch on operating costs and profitability which could translate into fewer bonuses and freebies for players and fewer new sites to play at.

The clock is ticking for Flash

Shockwave Flash is a technology that has been (albeit slowly) on the way out for years now, ever since Steve Jobs decided never to support it on Apple devices. but now it really is the beginning of the end for Flash.  There are many reasons why Microsoft, Apple, Google and Mozilla all dislike Flash and these include its vulnerability to hackers, its lack of cross platform support, its slow speed and its tendency to crash.  2017 looks set to be the year when Chrome and other browsers remove support for Flash.  This is a BIG problem for online bingo because many bingo sites still require Flash to work (apart from on mobile and tablet where it isn't supported)!  The replacement for Flash is HTML5 and some bingo sites have already moved on to it (or never used it in the first place).

Already on HTML 5: Jumpman (although some of the slots are Flash), Cozy, Relax Gaming, Virtue Fusion/Playtech (not all sites), Bede Gaming

Still on Flash: Microgaming, 888/Dragonfish, Daub, B-Live, Gamesys.

At the end of 2016, Virtue Fusion's move to HTML5 had been under way for the best part of 18 months but many Virtue Fusion bingo sites were still on Flash.   It is taking a long time to complete, exacerbated by some considerable player resistance to the new style lobby and bingo rooms.  The HTML5 version loads much faster but was launched without many of the features of the Flash version and with a restricted selection of slots and this was unpopular with players.

The Flash bingo platforms all have non Flash mobile versions (although in the case of Gamesys not all the rooms are available) but - as we have seen with the Virtue Fusion migration -  integrating them on to the desktop is not a quick and easy job.  888 have been rumoured for some time now to have a move to HTML5 in the pipeline and we expected this to materialise when the new version of the Dragonfish/888 software (including Flash Fives) was released in summer 2016 - but the new version (as found at Foxy Bingo, Costa Bingo and many other sites) turned out to be Flash based.  888 could now be running out of time to get their move to HTML5 completed before support for Flash disappears entirely - and because of the sheer number of sites on the platform they really need to get it right first time to avoid massive disruption across the industry.  Indeed, some 888 powered sites have already taken steps to do something about this looming problem - basically by introducing some kind of workaround.  Foxy sent an email to their players at the beginning of December 2016 explaining how to re-enable Flash pop-up games that no longer run automatically in the Chrome browser, and the Costa Bingo group of sites, at roughly the same date, started to offer players a choice of the Classic Lobby or the Tablet Lobby (the latter choice serves the HTML5 mobile version to the desktop).


Even more big link bingo

Big link bingo games bring together players from different networks and give players access to high variance bingo - where the chance of winning is smaller than in a normal bingo room but the prizes are bigger.  We expect to see these games continue to flourish but, rather than big games with huge guaranteed jackpots that can go very wrong for bingo operators if they fail to sell enough tickets, more along the lines of the 888 big link rooms that run every evening.

Even less charity bingo

The decline of charity bingo has been caused by the squeeze on bingo operators' profits resulting from regulatory and tax changes and as already discussed more of these are coming.  A new charity bingo site - Give Back Bingo - did launch right at the end of 2016 with the modus operandi of a monthly donation (guaranteed to be at least £500) to a nominated charity.  This has been tried by various other sites and never worked consistently, and it remains to be seen whether Give Back Bingo can get it right where others have failed.

The decline of chat

Chat has always been one of the things that makes the online bingo experience special, but at many bingo sites it now seems to be in decline.  For example, at Cozy sites, although the rooms were networked, there used to be different chat and a different chat host in each room and now there is one chat channel linking all the rooms together.  At Dragonfish, and at 15 Network, many rooms are no longer hosted at all (especially during the daytime).

The more chat rooms a site has and the longer they are open each day, the more chat hosts the site needs to employ altogether to ensure all are covered - and unless the bingo site has non network bingo rooms or is on the Virtue Fusion platform, it is not the site operator but the network provider that makes the decision as to whether this is worthwhile.  It's not just a matter of paying the chat hosts, either - players expect there to be chat games in hosted rooms (and there may be very little player participation in the chat without them) but the bonuses and loyalty points that are typically given out as chat game prizes represent a further cost.  Certain networks also used to be able to keep the cost of the chat down by employing chat hosts based in other countries but this is no longer so effective because of the collapse of sterling after the Brexit vote.

Given that an increasing number of players are now playing via their phones (and presumably this is also more likely to be the case in the daytime than in the evenings) which makes it much harder for them to participate in or even keep track of the chat, Cozy, Dragonfish and 15 Network have clearly decided that full chat coverage is an unnecessary expense.

Our view is that cut price chat is not really much better than no chat at all and that it is better to concentrate on getting high quality hosting for busy times when there are lots of players around - and also that network chat can never be in the same league as the sort of site specific chat you find at big Virtue Fusion sites such as Sky Bingo, Sun Bingo and bet365 Bingo, or at non network sites like Bingo Hollywood.   Nor do we expect to see any new bingo sites launching which can rival the aforementioned big Virtue Fusion sites as far as the quality of the chat goes; to set up a high quality team of UK based chat hosts would require a big initial outlay which the majority of entrants to the market would be unable to afford.

More new bingo variants

The last time Virtue Fusion came up with something completely new was Cash Cubes last February.  While several new Virtue Fusion bingo games have come out since then these have been regular bingo with an extra bonus game (e.g. The Chase Bingo), a variation on an already existing game mechanic (e.g. Mystical Bingo at Sky and Bingo Bowl at William Hill both of which are 50 ball) or a VF version of a game from another platform (Royal 5s at Mecca which is basically Cinco).  The most probable time over the next year for them to announce a new variant would be at the ICE Totally Gaming show in February (which is where Cash Cubes made its first appearance last year). UPDATE: A new variant was indeed launched at ICE (Bouncy Balls Bingo) but it is essentially a re-skinning of Cash Cubes.

Flash Fives / Bingo Vegas was the last variant 888 introduced and it is still not at very many sites, so we would expect to see it propagate further rather than anything else launch (especially since the 888 technical team are presumably busy working on an HTML5 migration plan).  Rather than new variants, we could see more Dragonfish/888 games offering free slots spins as prizes, like the ones at Iceland Bingo.

More focus on slots

We don't just expect to see bingo sites adding new slots as they come out.  We also expect to see:
  • Bingo sites extending the range of providers they get slots from - as the Jumpman sites did towards the end of 2016 when they began to feature NetEnt slots
  • Bingo sites offering more slots bonuses and free spins and fewer bingo bonuses - as already seen at a number of sites including Foxy Bingo

We expect this to happen particularly at sites with less chat as operators encourage players to entertain themselves with slots instead of chat in between bingo games or even switch to slots only sites.

Increasing use of social media for promotions

In 2016 we saw some innovative uses of social media to increase player engagement; perhaps the most memorable was the Facebook Live quiz promotion run by Sky Bingo. Each question was on screen for one minute and players were invited to comment with the answer; a prize draw then took place between the players who answered correctly while the question was live and the winners received bonuses.  Sky also had the regular Winners Wednesday promotion where ten players who commented with their chat name and the Winners Wednesday hashtag would each win £25 bingo bonus.  The Sun Bingo Bimoji promotion was also run via Facebook - each time, players had to guess the name of a film from the visual clue.  We expect to see many more promotions run this way in 2017, as well as the continued use of social media channels to remind players about what's going on on site.