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Crossing the Bridge

Transitioning online gamblers to land-based gamblers

Crossing the Bridge

It is taken for granted, in the American poker community, that the emergence of online poker played a vital role in driving players from their computers at home to their nearest brick-and-mortar poker room in the years following the Moneymaker boom of 2003. The widely held (though fading) belief within the U.S. brick-and-mortar industry that internet gaming could “cannibalize” or take away from land-based participation strikes the average poker player today as absolutely counter-intuitive.

“I never had a reason to go into a casino to gamble prior to learning how to play poker online,” says Donna Lawton, a mother and nurse in Ogden, Utah who went on to become an advocate for online poker legalization. Her words are backed by the testimonies of countless other players, like Seattle-based James Crockett. “The only reason I ever started playing in casinos is because of the experience, confidence and bankroll that online poker allowed me to build.”

If it sounds like this online-to-live migration is biased toward poker, it’s because in the years prior to Black Friday, online poker was the most readily accessible form of online gaming to most Americans. When Black Friday hit, it wiped out offshore operators from the U.S.-facing space, but in 2013, online poker made a comeback to the U.S. in its current intrastate-regulated form.

What’s different this time, however, is that U.S. online poker operators today are the same brick-and-mortar properties that online players are supposedly being steered into, creating an opportunity for a cyclical effect. J.J. Johnson from Montana says he “might have never picked up the game, nor the gamble, without PokerStars in the picture.” But PokerStars does not operate any casinos in Las Vegas nor the United States (though they certainly tried to acquire one). Similarly, Jason Ballwahn, financial supervisor from Appleton, Wisconsin, credits “playing freerolls and play money on UltimateBet” for encouraging him to step foot into a nearby casino in Green Bay for the first time.

“If my state offered online poker and the sites offered comps and tournament satellites to the casino,” Ballwahn tells GGB, “it would definitely increase my visits there.”

The American casino industry is finally heeding Ballwahn’s suggestion. Land-based resorts nationwide are taking charge of their own online strategies as means to not only to generate additional revenue, but also establish more meaningful connections with customers both on and off the property.

The Specialists

There exists an entire industry dedicated to monitoring and stimulating the transition from online play to land-based. A leader in this field is Gibraltar-based Andy Caras-Altas, CEO of Traffic Generation, which specializes in advising and working with land-based properties to elicit patronage not just from real-money online gamers, but also social, free-to-play users and other web-based communities.

“We have seen huge potential for social-to-land-based crossover, and this is really where the U.S. market is heading,” Caras-Altas says. “One of the market studies we ran recently using our social agents found that 32 percent of U.S. social slots players visit a land-based casino more than once a week.

“This indicates that not only is there a real opportunity for casinos to engage with existing land-based players when they’re out of the property, but also there is a very large group of potential players that present a target for new player acquisition.”

Among the gaming industry executives who caught on early to the importance of “off property” marketing are Alec Driscoll and Rick Campbell, respectively head of interactive gaming and marketing executive for American Casino and Entertainment Properties (ACEP), which operates four casino properties in Nevada including the famous Stratosphere in Las Vegas.

ACEP’s online-facing gaming platform is ace|PLAY, a rewards program not yet in a position to take real-money online wagers but already making strides in providing free-to-play games where users can win prizes, ACEP casino comps, tickets to shows and rides, etc. “Ace|PLAY establishes a smart methodology for property players to come online and online players to come on property,” Driscoll says “I don’t see a scenario in the U.S. where that isn’t an absolutely integral part of a strategy, especially in the state-by-state model: the ability to be in front of players when they’re not on property, and the ability for the property to have a say in the online universe.”

His colleague Campbell echoes the sentiment. “We want to give our customers and our guests, whether they are on their way to Las Vegas to visit a casino or they are already here, an opportunity to play with us prior to their visit.” Campbell adds that customer response to ace|PLAY has been “very positive.”

Ace|PLAY demonstrates how real-money wagering is not an essential prerequisite to a useful online gaming platform, especially if the aim is to motivate players into interrupting their online play and moving someplace else (ideally the land-based casino). Along with being able to monetize on its own, web-based virtual gaming can also acquaint the player with the casino playing experience, which as we have seen with poker, can definitely help people build up the gumption to hold their own in the brick-and-mortar.

David Tuchman, editor of American Poker Player magazine and a well-known and respected poker commentator, shares a memory that illustrates this near-universal appeal of online. “I grew up playing poker and wasn’t nervous when I first started playing hold ‘em in casinos,” Tuchman says, “but my girlfriend at the time was petrified. She desperately wanted to play, but she’d take six laps around the card room before summoning up enough courage to finally sit down. I’ve heard of people having this type of experience time and time again, and it seems like more often than not, getting comfortable playing virtual poker online was a precursor to many of these people stepping into a brick-and-mortar card room to play live.”

Perhaps more valuably, online players—often unwittingly—donate a sea of information about themselves relating to their gender, how old they are, where they are geographically located, what games they like to play, when they play them and how often, etc. In a brick-and-mortar environment, this type of information would be best obtained by handing customers paper and pencil and asking them to take a survey—good luck getting them to agree to it in the first place. Conversely, in the online space, players leave behind a massive digital trail without even realizing they’re doing it.

It’s up to the competent marketer at that point to interpret, and apply, this gift-basket of user data.

“In order to know how to cross-promote which products to which customer base,” explains Caras-Altas, “it is important for land-based operators to understand the players they are targeting, and that different players have different wants and needs. Combining social data with gaming data is a powerful way of really getting under the skin of a player’s wants and needs. Properties need to target their marketing to players that will be most likely to visit their properties (e.g.: geographic location, age, lifestyle, preferred games, etc.).”

“Another point to consider,” he adds, “is that there are various types of online gamblers—therefore different ones will be attracted to different kinds of land-based play—which again feeds into how digital marketing is beneficial to land-based operators, because there is the ability to create personalized, targeted campaigns and messages.”

Driscoll and Campbell observe this balance, and are careful not to overstep the boundaries. It is unwise, and potentially disastrous, to try to convince every online player you come across to become a brick-and-mortar customer. “Come in the building or come on the online site… We consider both a win,” says Driscoll. “I do want to try to cross-market you, but I don’t want to make you a live player if that’s not what you want to be. If you want to be a free-to-play player, then that’s where I want you to be. Same goes for social and real money. It’s no different than a locals campaign versus a tourist campaign.”

Real-Life Examples

Robert Lynch is an affable family man living in Monmouth County, New Jersey who loves to play poker both live and online. Because he lives within considerable driving distance from Atlantic City, Lynch has to plan his trips down there in advance. You’d think that the existence of regulated online poker in New Jersey would remove Lynch’s motivation to go play in Atlantic City. But he sees the exact opposite happening.

“I think online poker will allow me to play more events, of a higher buy-in in the land-based casinos. For tournaments in Atlantic City with entry fees between $1,000 and $5,000, there are usually qualifiers where 300-400 people try to get in.”

Lynch is referring to “satellite” tournaments, where the prizes are not cash but entries into larger, more expensive events. Online poker satellites into land-based events are nothing new, but in New Jersey we are seeing a more determined, fine-tuned attempt to steer local online players into brick-and-mortar properties via well-constructed satellite offerings.

The clear iGaming winner in New Jersey so far has been PartyPoker, in conjunction with its casino partner, Borgata. Jeffrey Haas, director of poker at bwin.party digital entertainment, says a smartly designed online poker offering is uniquely capable to drive players directly to the desired land-based location, almost as its own reward. “PartyPoker consistently sends players to casinos around the world through online satellite qualification tournaments into live poker tournaments—usually events on the World Poker Tour’s Main and National tours,” Haas says. “They can typically win full ‘event packages’ that include a poker tournament buy-in, several nights’ hotel accommodations and some money for travel and spending.

“So we’re not only sending players to the casino properties for the tournaments as a casual day-tripper, but we’re sending players to the properties’ hotel facilities for several days, resulting in greater potential value for our partners who may try to cross-sell other gaming products, F&B and entertainment.”

Haas knows exactly what Lynch is talking about when the latter expresses gratification at being able to satellite his way into expensive live tournaments thanks to an easily affordable online qualifier. “The key benefits of online satellite qualification to players are the economies of scale, whereby players can win an event package for a much lower price point than they would ever find at a brick-and-mortar casino. For example, our multi-tiered ‘WPT Steps’ satellites on nj.partypoker.com for the $15,400 buy-in World Poker Tour Championship at Borgata start at only $1.”

New Jersey is expected to be a meaningful theater for the demonstration of effective convergence cross-marketing techniques, many of which are still in an experimental phase. But all of the participating resorts are taking the challenge seriously. “We always believed we could drive players from online gaming to the Tropicana Atlantic City, and the evidence is bearing this out,” says Steve Callender, general manager of Tropicana Entertainment, which operates the eponymous property on the Boardwalk. “We’re attracting new customers and deepening our relationships with existing customers. Also, we’re gaining important insights into what they value about Tropicana that will help us continue to innovate forward on all sides of the business.

“We want to be where our customers are and have top-of-mind awareness. Tropicana rolled out an integrated campaign with marketing messages both on and off property. Our #ReasonToPlay campaign, currently running on TV, out-of-home and online throughout the state, tells the people of New Jersey we can offer them some of the same great entertainment they come for at Tropicana Atlantic City, wherever and whenever they want it.”

Callender’s “top-of-mind awareness” mentality is on point, but it raises a question. It’s easy enough to market to players when they are inside the casino, because they can only be in one place at one time. But on the internet, retaining attention becomes a massive challenge, with a typical user being able to play on multiple iGaming clients at one time, not to mention all the other web-based distractions. What can a land-based property do to stand out in the virtual world with thick competition?

Driscoll, who now works in Nevada but has had experience in Atlantic City, sees an important real-life parallel. “I’ve never seen a regular casino gambler who doesn’t have 10 different player cards,” he says. “The key is to make sure that you can maintain that percent of attention. I don’t think any of us expect we can dominate that totality of it.”

Unpredictable Consequences

Tragedy83 is the moniker of a professional online poker player based in Somerset, New Jersey. He has been playing poker both live and online for a decade, and had a tough go of it when Black Friday took away what was his main means of income.

Tragedy83 is happy that online poker is back in New Jersey, and he has certainly resumed playing a lot of it. He has also warmed up a great deal, as many players have, to the relatively novel (to U.S. players) “cash out at cage” feature, where a player can both fund and withdraw from his online account directly at the cage of the land-based casino partner. Indeed, this measure was designed with the idea of getting online players in the casino clearly in mind. And it’s working. But it could also be causing disruption in players’ typical casino-going habits.

Despite being a lifelong fan and patron of the Borgata casino in Atlantic City, Tragedy83 says he has not been as big a fan of Borgata’s online-facing offering via PartyPoker. “I’m not doing as well on Party as I’m doing on WSOP.com and 888, mainly due to variance. I love the Borgata resort and I would like to keep giving them my business online (via PartyPoker) but the problem is that the tournament structures on Party are not very good for me; too many turbos and hyperturbos, and I try to avoid those.”

As a result, Tragedy83 has been building a much bigger bankroll on Caesars-licensed online poker rooms, meaning that the next time he goes to cash out at the cage, he is more likely to go to places like Harrah’s and Bally’s (the latter of which has just recently greatly expanded and remodeled its poker room). And what is this more likely to lead to?

“I think in the future I will be playing at the Caesars casinos more since I have a little bit more money floating around on their sites. The tournaments I’m doing well in happen to be on Caesars’ sites. I have to go where the money is.”

Looking Ahead

PartyPoker may thus not be able to count on Tragedy83’s business as much as its land-based counterpart does, but the company, emboldened by its early success, is preparing to uphold its part of the convergence bargain even more. “As we ramp up our online satellite qualification activities in New Jersey, we will be sending more and more online players to the casino to participate in live events,” says Haas. Last month, his colleague at Borgata, COO Tom Ballance, gave an interview to CNBC where he confidently admitted he did not believe internet gaming to be a threat to brick-and-mortar, but rather that it could be properly used to drive new customers to the casino.

Haas agrees. “I do believe it is a worthwhile ambition for online poker sites like partypoker.com to drive players to live poker rooms for major events. It is a mutually beneficial activity for both online and live operators, and there are many sophisticated ways to optimize the efficiency and effectiveness of this for both businesses.”

In the end, the most dependable recipe for live casino participation may be in that the experience is simply fun and unique on its own, no matter how far online goes to provide users with an alternative or complementary experience. Every type of online poker player from the recreational like Lynch to the professional like Tragedy83 seems to appreciate this. Or to put it simply, like Aaron Brown does, “I am an online grinder, yet the social aspects of live poker always bring me back.”

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