Two a penny : The influx of new bingo sites

As the popularity of online bingo seems to show no signs of slowing, it is little surprise that more and more brands are launching to try and take advantage of the ever expanding market.

At the time of writing there are approximately 360 online sites out there with new bingo sites popping up daily. In 2015 we have already seen about 30 new sites take to the market, mostly offering pretty much the same as the ones which came before them.

bingo sites

As a business proposition bingo has lots of strong points. After all, player values can be high and start up costs, if joining a network can be low (more on that to come). It is these reasons that generally seduce new investors to try and forge their own slice of the market.

What people entering the market tend not to realise is that due to there already being well over 300 other competitors, despite the expanding market it is extremely difficult to take a slice.

Many of the people launching new bingo sites do so on a shoestring budget with no extra funds for marketing. This is generally where the problem lies. Without a marketing budget it is very difficult indeed to acquire new players and generate revenue.

Of course, people tend to assume they will be able to rely on affiliates, which in part is true. However the big affiliates know their value and charge so highly that there is generally little profit left for new site owners, especially those who have opted to be part of a network and already have an obligation to pass on a great part of their revenue.

Unfortunately, a great number of new ventures fail in this sector, undoubtedly leaving investors out of pocket. This in turn has lead to market consolidation where we see a few larger investors purchasing many different brands to add to their portfolios.

With more networks opening their doors and some of the larger networks now boasting a profile of over 100 brands, there seems to be no slow down in the recruitment of new investors, many of which seem to have no market experience.

When launching a bingo site there are two main options. The first is to design and build a software infrastructure in order to offer proprietary software. This is a very costly exercise but those who take this route generally have the funds to market their products well and often prove successful.

The second (much) more popular route is simply to setup a whitelabel. Generally this costs around £5,000 but some network operators are willing to waive this fee completely, such is their enthusiasm to expand. To own a whitelabel is to become part of a bingo network. This setup offers some inherent advantages, such as player liquidity and low setup costs, staffing costs are also minimal. The only problem is owners are generally tied to a commitment to hand over a certain share of their earnings to the network provider, in return for the services provided.

All in all, we feel pretty sure that eventually the number of new bingo sites will ease off as people realise that it is not a guaranteed method to score some easy money and of course, as the market becomes completely saturated, it is only going to get more and more difficult to acquire new players.


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