It shouldn't necessarily be "much much" better. Imo, just slightly better would be enough to win the competition. It wasn't like this before the Internet because living in one part of the world people had had little to no idea of what's going on in other parts, and even if they knew about something being better in other country, they couldn't use it. So, indeed, you had to have something much much better to draw the attention of potential customers from other countries. Now you can just copy something nice, improve it a little, and you are the winner.
Globalization has really affected almost all aspects of our lives, this is now true not only for casinos or businesses in general but also for people, now you are competing not only against the people that went to school with you, you are competing against people from all over the world, but as you say in order to be a winner in that race you do not have to be so above the competition, because that is very difficult, you only need to be a slightly better option and that will be more than enough to beat the majority of your direct competition.
Every kind of business has competition and the more you are different from others people would love to explore and experience other features that you have even though the mechanics of the games are almost the same at least you are different from others. A gambling casino that has its own developers would be better than buying a script that has already made it possible there are similarities to other gambling casinos.