As the industrywide shutdown due to the coronavirus continues, suppliers are forming contingency plans to deal with the millions in losses that will pile on as casinos remain idle. If there’s one supplier that has a hedge against many of those losses, it’s U.K.-based Inspired Entertainment.
Inspired’s main product is Virtual Sports, and the demand for that digital product has gone through the roof. Virtual Sports are realistic digital contests that mimic live sports with remarkable authenticity. Using motion-capture technology, developers record the live-action movements of real athletes, then convert them to digital graphics which, at a glance, are practically indistinguishable from a video of live sports.
The animation is choreographed into 90-second contests, which resemble highlights of sports including soccer, cricket, American football and basketball, stock car races and horse races. Players can make the same types of wagers they would in a sportsbook or racetrack, including in-play-style wagers, such as which team will score first.
All results are chosen via a random number generator. The odds and point spreads are set based on the probability of each potential outcome, whether that’s the score of a football game or the outcome of a race.
The virtuals package also includes several casino games, including table games, slots, keno and bingo.
The Inspiration
The company was founded in 2002, several months after an equine disease canceled a wide swath of horse racing in the U.K., including the annual Cheltenham Festival and other major events. Its early products included virtual horse races that filled the needs of bettors when live racing was unavailable, or between races during the meets.
Those racing products have evolved right along with the sports offerings, and today, Inspired Entertainment offers virtual contests involving 14 sports, many featured in multiple offerings, making up a portfolio of 20 different Virtual Sports products—the most of any supplier. Inspired’s Virtual Sports are live in 50,000 venues worldwide, and on more than 200 websites.
The company’s newest product is the V-Play Plug & Play solution, a complete end-to-end online scheduled virtual sportsbook product that lets operators offer their players scheduled virtuals with minimal effort, with no sportsbook integration or UX development needed.
Inspired Entertainment’s retail locations include betting shops in the U.K. and Greece, where the company holds 100 percent market share; and Italy, where it’s the leading supplier. In the U.S., the company has provided its games to Nevada sportsbooks through a partnership with William Hill. Since online gaming and legal sports are now emerging in the U.S., the company is expanding its North American business. Virtual Sports are now available at all of New Jersey’s online sportsbooks, and at retail locations of the Pennsylvania Lottery.
With around 60 percent of the company’s revenues coming from gaming machines at retail locations, Inspired Entertainment, like other suppliers, is struggling through the worldwide closures of betting shops, casinos, racetracks and other venues due to the coronavirus pandemic. However, much of that revenue stands to be recaptured by the suddenly soaring demand for the company’s online and mobile products, which are seen as a perfect way to fill the gap while live sports are suspended and casinos closed.
“The good news as it relates to North America is that most of the people in sports betting in North America were already customers of ours,” said Brooks Pierce, president and chief operating officer of Inspired Entertainment, in an interview with GGB News. “Frankly, with no sports going on right now, we haven’t had to do a hell of a lot of marketing, because we’re having a hard time keeping up with all the customers that want to get our products in as quickly as they can.
“When sports betting came to the states, most of the folks who were sports betting operators rightfully were trying to get their businesses up and running and starting with live sports, and we had always assumed that Virtual Sports would be the next channel for them,” he said. “But now, with no live sports content, they’re incredibly anxious to get or add more of our Virtual Sports.”
Pierce added that new customers are likely to keep Virtual Sports in their portfolios after the return of live sports. “We think it will be sticky for them and for us and the players, and the fact each product is available every two or three minutes for players doesn’t hurt either.”
Motion-Capture Quality
The reason new customers will retain the virtuals, says Pierce, is the same reason for their widespread popularity among current customers—the video contests are authentic microcosms of real sports, thanks to technology that has evolved over nearly two decades.
“When we did a motion-capture in the basketball game, we literally had teams of players on a court be filmed, and we hired a college coach from North America to make sure the game scenarios were realistic and lifelike,” Pierce explained. “So, you’ll see plays and it will make sense when guys will have the ball down low and pass it out to the three-point line. It really does look like a basketball game.”
Inspired took the same care with the American football game, added to the portfolio around two years ago.
“We hired a guy who actually played for the Patriots in the Super Bowl, to watch our motion capture shoot and talk to us about how certain players should look in the video,” Pierce said, “so it looks amazingly realistic, from the game play itself to the celebrations for a touchdown.”
“It’s a film-quality, very high-cost motion-capture shoot, where we capture all the player animations,” said Steve Rogers, chief commercial officer, virtual sports for Inspired. “Then we start building the framework for the game, building a stadium in 3D. That takes anywhere from a year to 18 months, to build a game from scratch to be ready to deploy. It’s a significant investment in a new sport. Basketball just went live. Basketball is popular wherever we go, so there will be a number of jurisdictions where basketball will be the second-most popular sport behind soccer.”
“We put a ton of effort and money into the production of the product,” said Pierce. “Even though the outcome is randomly determined, for the players, it’s hard to tell what’s a real sport and what’s our Virtual Sports.”
The games are designed to be easy to play, and the wagers don’t involve skill.
“The odds are set based on the probability of each potential outcome, whether that be the winner of a race or the score in a football game,” explained Pierce. “You’ll be looking at, say, a Philadelphia team against a New York team, and there’s a spread with each outcome having its own price. There’s no handicapping involved. You’ll pick one versus the other one.
“Some players will play the more typical markets like money line and point spread, and others will play some of the exotics—which position is the first position to score, the total number of points in a game, how much a team will win by. If you were betting a (live) football game, betting on the money line or against the spread, you’re waiting three hours for the outcome. With our games, you’re going to get the outcome determined in three or four minutes.”
Even though each event lasts around 90 seconds, the system allows three to four minutes for wagers to be placed before each event starts. “For horse racing, obviously, we’ll show the full race,” Pierce said, “but for a football game or basketball game, you might see two or three plays per quarter, then you’ll see the final score.”
The sports games identify each team by city only, with no real team names or logos. One new product, though, will feature alumni legends of real NFL teams. The company is preparing to launch a “Legends of Football” game under a license deal with the NFL Alumni Association. In a game between Philadelphia and New York teams, “you might see Ron Jaworski throwing a touchdown pass to Mike Quick, or Phil Simms getting sacked by Reggie White,” explained Pierce. “We have the rights to use the players’ names, which is a great attraction.”
Branching Out
The largest current markets for Inspired Entertainment are the U.K., Greece and Italy. In North America, the company is working with all the sports betting operators as they build their brands.
In New Jersey, the games are available through all online books associated with casinos.
“What you’ll see in New Jersey is what’s already live with bet365—all the latest iterations of our product,” said Rogers. “All our New Jersey customers are going to get 14 channels of concurrent Virtual Sports, running 24 hours a day, seven days a week, 365 days a year, to provide a much-needed revenue source right now. But when sports do come back, they will sit perfectly alongside live sports as well.”
Rogers added that the new V-Play Plug & Play solution is a major improvement.
“We have been delivering a subset of our virtual products to all the major New Jersey operators for the last couple of years through an RGS deployment via a third party, but now we’re adding all those games and more to our latest platform, which will also include football, basketball and our stock car racing,” he said.
“It is simple and quick to install via the remote gaming server, so it’s a wallet integration. All online/mobile gaming operators have an online wallet. We integrate our core platform, our remote gaming server, into that wallet, and that allows the customer to do a number of things. It can take our slots games, our table games, our traditional casino products, our on-demand Virtual Sports, and now it can take our scheduled Virtual Sport products. All are now available in a single wallet integration. We’re now a one-stop shop for all of that content via a single integration.”
The company is expanding its footprint in North America.
“Whether it be land-based or mobile sports wagering, we’re looking to regulate Virtual Sports on a state-by-state basis as we move across the country, using virtuals either as a precursor to live sports wagering or alongside sports wagering,” Pierce said. “The NFL is only available four months out of the year, so having a readily available football Virtual Sports on tap can be very powerful.”
The regulatory approach to Virtual Sports depends on the jurisdiction, he added. “It’s a random number determination, so we explain the probabilities and market and prices to regulators, and how the games work, but the regulator will typically look at how the result is determined, and then make a decision based on that.”
In New Jersey, because it’s RNG-based and requires no skill, Virtual Sports is regulated as a slot machine.
“Nevada took a view that it’s a sporting event, because it’s wagered on like a sport, on a self-service terminal in a casino,” Pierce said. “Other regulators look at it as a slot-type game, because it’s an RNG. Other regulators, like in Italy for example, wrote an entire set of regulations just for Virtual Sports—just specific to the category. It can be mapped to all different types of regulation, even a Class II type. You can map it to a Class II bingo engine. It’s very flexible at the back end.
“Where this product is fairly ubiquitous and well-known around the rest of the world, it’s brand new in North America. So, part of the process for us and for our customers who are the operators is educating the regulators on how it all works, in the U.S. and Canada.”
The company is targeting every North American market as sports betting expands.
“In just about every market where we are, the virtual product goes alongside existing sports betting,” Rogers said. “Some operators look at it to move players from sports to casino, or casino to sports. They’ve used virtuals as a kind of migration product, because it’s easy, it’s quick, and there’s no skill involved. Anyone can play Virtual Sports without any detailed knowledge of sports wagering, so operators will look at it as a product to migrate players from Product A to Product B as well.”
“Many of the operators in North America are already customers of ours in their European businesses, so they know the Virtual Sports business well,” Pierce added. “There are multi-billions of dollars being wagered on these products around the world. It’s one of those things that’s been a little bit further advanced outside of North America, but I think once the players have a chance to see it and get used to it, it will become a regular part of their betting menu.”
In addition to sportsbooks, the company is looking to expand the state and provincial lottery footprint of its product. In Pennsylvania, players at retail locations wager on a kiosk and then watch the game action on large monitors. Bars and taverns are now applying for licensing as lottery retailers as well. “We have a contract with the Pennsylvania Lottery, and a number of other lotteries lining up to add this product,” Pierce said.
Meanwhile, during the current sports and gaming industry shutdown due to Covid-19, Inspired is seizing the opportunity to spread the word that Virtual Sports can fill much of the void where online and mobile wagering is permitted.
“Mobile and virtuals go well together,” said Rogers. “Since the advent of mobile sports wagering particularly, Virtual Sports has grown and grown, and in the past year, mobile wagering on Virtual Sports has surpassed retail wagering. Mobile continues to grow as sport wagering on mobile becomes more of a day-to-day activity.”
“Unfortunately for us, every one of our markets in retail is shut down at the moment, so virtuals and interactive have gone from a big chunk of our revenue to 100 percent of our revenue,” said Pierce.
“Hopefully, that’s not going to be the case forever; the retail will come back. But the nice news is that Steve and his team have people working nonstop to meet the demand. We’ve got our RGS development center in India going full-time trying to do as many of these integrations as fast as possible, so we can get this product out to all the customers. We have operators and aggregators right now that are desperate to get the product, so we’re going as fast as we can to get the product out to the market.”
Rogers commented that the current situation is not unlike the situation that existed when Inspired Entertainment was founded. “
If you go back 20 years to when I first got involved in virtuals, this is how the whole thing started,” he said. “There was a ban on horse racing in the U.K. market, because there was an equine disease that meant you couldn’t move horses around the country, so they canceled all horse racing. People said, ‘What about that cartoon racing? Should we put that on the big screen?’ I was around back in the time, and crazy that it’s come around again.
“But that’s why it was there; that’s what it was designed to be—a content filler for people who like to bet on sports.”
