Dermot Smurfit, the CEO of GAN (formerly GameAccount Network), talks about why U.S. casino operators have been slow to embrace social casinos that would allow them to stay in touch with their players when off property.
1. What is the status of the casino industry completing an online transition like other industries?
Traditionally, when bricks-and-mortar industries migrate online, usually you get a leader who jumps way ahead of the pack and everyone else races to catch up. We’re in the early period of that era, and I predict sometime within the next year, you’ll see one casino company jump far ahead of the pack, and the others will wonder how they did it.
2. Why can’t casinos just use Facebook for a social casino platform?
It’s pretty simple: Because you never own your customer data; you only rent it. And today in the social casino market built principally on the Facebook platform, you can see that the big boys continue to get bigger and bigger, so it’s very hard for a startup casino to achieve any degree of scale, which we would express as maybe 200,000 active players a day. And even if you are successful, very quickly the competing casinos copy what made them successful using Facebook’s amazing advertising systems. It’s a great platform to advertise on, but a horrible platform to operate.
3. Why are land-based casinos the best organizations to operate social gaming?
Because of the prohibition of iGaming in the U.S. (except for a few states), it is a market that is not being served by the people who are best positioned to serve it, the land-based casinos. American casinos are very much at the heart of every regional community, and they function like a social hub. They can bring that same service to social gaming.
4. Why haven’t casino executives capitalized on social gaming?
There is a growing cohort of casino executives in America who are beginning to understand the scale of the business and the sheer quantum of money that is being spent by casino patrons when they are off property. If you appreciate the level of engagement, you have to reassert your relationship with that group and also protect the remainder who haven’t yet decided to download IGT’s DoubleDown or Aristocrat’s Heart of Vegas or one of the other social casinos available today.
5. So, how many of today’s casino customers are playing in social casinos?
We’ve seen two things. First, when a player engages in simulated gaming at home, it’s their way to prepare to come back to the casino. They play online with their local casino because they want to go visit that casino. That doesn’t mean that they’re not continuing to frequent other social casinos; they do. But we modify their behavior by reallocating their existing spend, which is typically fragmented across two or three existing social casinos, to their local land-based casino.