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Join us for the Reddit "Ask Me Anything" session on Wednesday 22nd July
Do you have any questions about WHLabs? Ask Crispin Nieboer (Director of Corporate Development and Innovation, William Hill) and Liberty Mawhood (Head of Accelerator Programmes, L Marks) anything during our Reddit session at 2pm on Wednesday 22nd July. This is a great chance to find out more about the accelerator get some handy tips on submitting and application. You can join the session here.
Building effective industry innovation
SBC News, one of the industry's leading news sources recently caught up with William Hill's own Crispin Nieboer. Here's what he had to say:
Having set up its technology and innovation hub in London’s Shoreditch district, William Hill has outlined product independence combined with in-house development and innovation competencies as its key corporate values which will lead future growth for its business.
Team SBC spoke to Director of Corporate Development & Innovation Crispin Nieboer one of the operators key leaders on innovation on how William Hill aims to reshape and create effective innovation for the sports betting and igaming industries.
SBC: Hi Crispin, thanks for the interview, can you detail why William Hill has taken this unique approach and organisational set-up to creating and developing innovation through a strategic hub?
CN: Typically, larger companies focus on maintaining their core business and find it hard to prioritise innovation above other shorter-term wins. Innovations can have lower profit margins at first and pay off in the long term. Additionally, the people who are good at operating the core business can be different from the ones that you need to generate disruptive models. One successful policy adopted in other sectors is to separate out the disruptive entity, protect it, and let it operate by a different set of rules than the core business.
SBC: As one of the leaders of the innovation project you have focused on developing with new ventures and outside parties. Why is this necessary to the success of your projects and what has William Hill gained by taking on board these partnerships?
CN: To deliver success we need to continue to collaborate with the very best partners in the industry, who can bring something different to our currently available skill set, or who can provide unique IP, or some other USP that will drive us ahead faster. We aren’t so arrogant as to believe that all the best ideas will come from within. We’re open to forming creative partnerships with third parties that incentivise both sides for the long term.
SBC: For major/legacy operators there is now a strong focus on omni-channel services delivery to consumers, how is this affecting product development and strategy implementation?
CN: The omni-channel opportunity for us is huge with over 2,360 shops and 2.8m active customers online. We are looking at all the areas you would expect from payments to customer recognition, trading, gaming, mobile etc. This is why omni-channel is one of the six categories in our accelerator and SBC readers can find out more by watching a video from our Omni-Channel Development Director, Mike Jones, explaining the opportunity at WilliamHillLabs.com.
SBC: In your opinion how has a convoluted and outsourced operational value chain affected innovation development in igaming and sports betting? Can operators really develop under these conditions?
CN: Many operators have suffered or even failed by trying to do everything themselves in-house, meaning that they have a heavy permanent tech cost with a longer time to market. They don’t always make the right priority or technology calls, either. Others have suffered by being too dependent on suppliers who have not maintained their competitive positioning or who have not been able to grow and evolve with their key customers. We believe there are some areas where it is right to outsource and others where it is better to build in-house, depending on your skill set and business maturity. With the right suppliers and the right technical architecture, this hybrid approach should drive innovation and time to market, rather than hinder it.
SBC: 2015 has been a year of corporate acquisition and consolidation, in your opinion has the importance of industry innovation been put to the side?
CN: I don’t think so. Of course, cost synergies have been the main driver of many of the acquisitions we’ve seen in the industry, but there are also acquisitions being made to acquire specific IP, technology and skills sets when businesses think that these are easier/better to acquire than try to build in-house. I would single out Paddy Power as another operator that is making an overt effort to prioritise in-house, organic innovation. Others may be doing it, but they are not talking about it!
SBC: Finally what are your long term ambitions and goals for the William Hill development hub?
CN: Across our internal teams, third-party collaborations and growing technical platform “enablers”, we are looking to lead the market in delivering enjoyable and memorable experiences that our customers love and trust, and, through this, increase value and differentiation over the long term.
William Hill: Online Betting History
A RECORD World Cup turnover of £40million on the 1998 tournament was boosted, albeit almost insignificantly, by a contribution of half a million pounds from the company’s fledgling website, introduced at the insistence of parent company, Nomura, making William Hill the first major bookmaker to take World Cup wagers in this manner.
‘We took £500,000 on it’ remembers former CEO and Chairman, John Brown, ‘That convinced me that internet betting was here to stay.’
The realisation prompted an all-out rush to improve and speed up the company’s infant prodigy – yet it did not even warrant a mention in the same year’s flotation prospectus.
By 1999 the new technology phenomenon was dubbed ‘Sportsbook’ and by January 2000 We had set-up a sophisticated and supple system linking four locations in separate jurisdictions (odds created in Leeds, accounts held in the Isle of Man, bets taken in a call centre in the Irish Republic, with the bookmaking operation in Antigua), enabling the company to offer telephone and internet clients tax-free betting.
By January, 2001 Horse racing had by now been added to the online site, and national newspaper ads prior to the Grand National of 2000 boasted to prospective new online customers: ‘No queues on the web’ – only for brows to furrow as the site crashed on the big day.
The same thing happened on the opening day of the 2000-01 football season. In November 2000 William Hill sponsored the live internet broadcast of Celtic’s UEFA Cup match versus FC Girondins – and supplied the first ‘in-play’ betting facility ever to be made available online alongside the live feed from a match.
Now outside help was called in, specialists from IBM and Siemens helping us painstakingly implement hundreds of improvements.
John Brown pressed for a ‘very, very quick’ site, concentrating on prices. He resisted attempts to clutter the site, as he saw it, with additional content like racing form and football tables. Nor was he keen on ‘bounty deals’ with sports content providers, who demanded upfront payments for providing a link to our site and a cut of stakes placed by those thus directed.
‘All we had to do was to get a customer to visit once. If the site was good enough they’d carry on using it’ said Brown, who now acquired a laptop of his own and checked the state of the site obsessively.
The site improved rapidly, becoming fast and reliable, and business grew exponentially, demonstrating flaws in the control systems and showing up an £800,000 online fraud, much of which was eventually recovered in a court case.
Around this time we entered into a deal with CryptoLogic, a leading online casino software provider, which made us ‘the first UK bookmaker to have its own casino site’ recalls John Brown. It had a trial as a ‘play for fun’operation, then in January 2000 became a ‘play for money casino using US dollars. April 2001 saw the addition of a sterling casino facility.
For legal reasons the online casino had to be located outside the UK, at first in Antigua, then in the Netherlands Antilles.
By the end of 2001 it had around 118,000 registered customers, of whom 35,000 were active.
Figures showed that in 2001, Hill’s Sportsbook generated £274million in turnover, with a gross win of £35.5m. That represented 11% of Hill’s total turnover and showed online was attracting a younger and more international set of customers than traditionally made use of betting shops and telephone betting.
The company’s directors believed we had the most profitable online betting operation in the UK.
David Harding was Hill’s CEO when online betting took a major hit when Congress in the USA, under pressure from domestic special interests, passed the Unlawful Internet Gambling Enforcement Act of 2006. The Act effectively outlawed online betting on the great majority of sporting events. Several individual states introduced their own provisions against online gambling.
Whilst not offering sports bets to US residents due to legislation already in place, David Harding’s view was that the new legislation made it impossible for us to accept even gaming wagers from the States and it was announced in September 2006 that we would cease accepting bets from American citizens.
By 2006 it became clear that the Sportsbook internet platform was no longer as competitive as it needed to be and under David Harding the development of a new technology programme called NextGen was ‘designed to rectify these issues and deliver systems clearly superior to anything currently available to our major competitors.’
By November 2007, however, NextGen was being consigned to history and with David Harding departing, the issue fell to new CEO Ralph Topping to resolve.
Scrapping it would cost a total of £24.9m, but it was deemed to be a cost worth paying.
Eight months after Ralph Topping took charge, a deal was struck with Playtech, a leading gaming software company offering a range of online casinos, poker room s, bingo games, fixed-odds arcade games and mobile gaming.
The deal involved creating a new business, William Hill Online, and Hills acquiring certain assets, business and contracts from Playtech, including 30 gaming sites and a customer services and online marketing organisation.
Playtech had 29% of William Hill Online in return for the acquired assets – with William Hill holding call options to reacquire that 29% stake in 2013 and 2015.
The transaction was completed on December 30, 2008. By the tine 2010 figures were published online was delivering a 24% net revenue increase, with Sportsbook up 95%. In 2010 Online saw 800,000 new accounts, a 22% increase on 2009.
In February 2013, the William Hill board resolved to exercise the call option on Playtech’s 29% holding in William Hill Online, valued at £424m – Topping called the decision a ‘major milestone’ for the company.
Over the years, Hill’s internet clients have landed some impressive wins, including life-changing amounts for some customers for modest stakes.
Paul Gwilym from Cardiff decided to have a 30p flutter on a casino game early one April morning, hoping to cure his insomnia. However he was soon wide awake when he won £114,561, later saying, ‘I haven’t slept since’!
A Maltese client needed Liverpool to win to clinch a 683,738/1, 19 match football accumulator in 2011 – the Anfield side made him wait until the 87th minute before they scored the winner – earning him £585,143 for his one euro stake. Another client, who won £1,426,000 on williamhillcasino.com when betting on his lucky number 23 at roulette called to ask us whether his computer was playing up….
29 year old Newmarket stable girl Olesia Kuzmychoua, collected £238,155 from a 20p spin on the Vegas slot game in January, 2014. Amazingly, seven months later she won another six figure sum.
On Valentine’s Day, 2015, a 33 year old man from Cambridgeshire struck lucky with just his eighth ever bet by turning £1 into nearly £170,000 with a Saturday football wager. The gentleman, who wished to remain anonymous placed a £1, 10 team accumulator before heading out with his family for the day.
"My partner and I had a son five months ago and last week we set up a William Hill account and deposited £20. The intention was to place two £1 bets every so often on the football and any winnings would go into a savings account for him. We have only placed eight bets. We will certainly be giving him a large chunk towards his future but we also plan to buy a house with some of the winnings as well."
Moving towards a seamless ‘omni-channel’ experience
Developing an omni-channel offering.
As the market leader in the retail and online sectors in the UK, William Hill has a unique advantage in targeting the increasing proportion of multi-channel customers.
Meeting a growing demand
While Retail remains our largest division and the channel of choice for the majority of UK bettors, in recent years we have seen an expansion of the total betting population in the UK, helped by ease of access particularly through mobile devices.
Now, we’re also seeing an increasing proportion of customers wanting to use both digital and land-based channels to gamble, particularly among the youngest customers. Our own market research demonstrates that a high proportion of our Online customers are using betting shops and around a third of our Retail customers are using online. A significant opportunity lies in ensuring that customers who are crossing over choose to cross into William Hill.
Capitalising on our strengths
We are uniquely placed to take advantage of this trend, with the largest shop estate and a highly competitive digital offer that has made us number one in the UK.
Our focus now is on evolving towards a seamless ‘omni-channel’ experience, removing more of the distinctions between the physical and online offering to give customers a ‘one William Hill’ experience.
We have already seen the benefit of co-launching or cross-launching games for our gaming machines, desktop and mobile platforms, with these games consistently out-performing single-channel games. Shared content roadmaps are becoming the norm for gaming, also enabling us to benefit further from proprietary content such as our Mayfair roulette, blackjack and baccarat products. On sports betting, we are exploring ways to make Online’s vast betting range easily accessible to Retail customers, including through self-service betting terminals.
At the same time, the engaging broadcast content developed by our industry-leading broadcast team to enhance the in-shop experience is now being made available to Online customers, creating a more consistent multi-media experience. We will also bring greater consistency to the look and feel of all display interfaces, including the website and the TV gantry, increasing customer familiarity with the different channels and ease of use.