As the gaming industry has continued to evolve, technology has been a center point of those conversations. Over the last several years, the focus has been on a number of issues including but not limited to the expansion of sports betting, cashless wagering, and iGaming. With these three forms of gaming, it typically has required some level of legislative change in addition to the regulatory structures that are subsequently developed. One that has not required this, though, is free-to-play gaming (F2P). This is a form of entertainment that several have adopted over the years as an extension of the experience, but not all have harnessed its ability to generate additional revenue.
In some cases, some members of the industry have stated that these expansion opportunities with the exception of F2P may hurt the brick-and-mortar facilities that exist today, driving customers away in the post-pandemic world back to their homes and not into facilities for the full entertainment experience. Those assumptions have not been founded to date as land-based revenue continues to exceed expectations.
In fact, land-based gaming has rebounded in a very positive way since the Great Shutdown, and these additional advancements in technology have in some cases helped accelerate those efforts.
Simply put, free-to-play gaming can be an extension of the gaming floor and the experience in every jurisdiction today. While some operators have been embracing this technology platform for some time, some have not looked at it as an engagement and integrated tool into the overall customer experience—both gaming and non-gaming.
Others have been able to flourish with this tool to not only drive further engagement in the product, whether that be slots, tables, sports betting or iGaming, but also to attract a customer through social engagement and keep them loyal to their brand. This has in turn allowed them to further engage in both gaming and non-gaming amenities.
Leading by Example
One of the best examples of this can been seen through the engagement platform that is current used today and developed by Wind Creek Hospitality. The app includes both F2P games and a way to engage with each of their facilities. Wind Creek has used the app as a driver into their facilities for several years, and it also interfaces with their loyalty program across all facilities.
It offers a comprehensive approach to the entire guest experience. This allows the player to not only stay within their ecosystem within the app but also within their network of properties, which span everything from their home properties in Alabama to Bethlehem, Pennsylvania to those in Aruba, Curacao and elsewhere.
Wind Creek takes that philosophy of why pay when you can play for free to heart. Their social interaction in the apps has a direct relationship to the gaming experience within their brick-and-mortar facilities. On its second version of the platform, it allows guests to stay engaged in the experience while they are away from the facilities in a social atmosphere.
Not only does it allow the patron to engage in gamification but allows access to promos, the Wind Creek Store, tournaments and auctions. This keeps the player within the ecosystem and may offer similar effects to that of online gaming, but actually keeps it social and brings them back into the property. As it looks to work on its third iteration, it will take the product on the road by white-labeling it to allow tribal operations to benefit from their experience.
The Wallet Allocation Rule
Measuring loyalty and satisfaction is nothing new to the gaming industry. One of the benchmarks that Wind Creek Hospitality has added to its set of industry tools is the Wallet Allocation Rule. Under this rule, it is more than about the customer’s affinity to the brand or operator but about what share of the wallet that may be available to the operator based on the discretionary dollars in a player’s wallet. Wind Creek has determined that this is a better score for measurement in looking at their marketing and retention efforts with a customer than the traditional methods used today.
The Wallet Allocation Rule has been published in the Harvard Business Review and MIT Sloan Management Review and used by other industries. It applies a rigorous test that measures customer loyalty to the share of their wallet. This provides insight into the customer’s current wallet allocation, the money available to be earned by them, and their preferences on what it would take to earn more of the share of the wallet. This has provided long-term sustainability for growth with the customer across multiple industries.
This is an added component to the theoretical win of the gamer that most in the industry use as a baseline to see what revenue may be achievable. The theoretical number continues to be used as the benchmark for a player’s worth. The wallet allocation rule takes that another step beyond traditional casino marketing practices by also understanding what portion of the wallet may also be available as part of the overall gaming spend. It provides further insight into the player besides their play on the floor of the casino.
One of the keys is understanding disposal income versus those items that are fixed within the wallet and not up for allocation. This includes what is available for entertainment versus those things that are not available to spend within the wallet. Data is a driver in everything that is done today. It is one that this industry is built upon, and gaining more perspective into the wallet only helps drive that data analysis and the relationship of what is available to the operator. It provides greater insight but also responsibility in understanding the customer.
A Proven Pathway for Gamers
As Wind Creek tries to capture more of its fair share of the gamer’s wallet, it must look at the metrics of each individual to understand how they socially interact within the ecosystem through free-to-play gaming. This is not to allow play over and above what the individual desires, as it focuses on responsible play. This is taking a step further to understand what the player does in a social aspect, when they are away from the casino floor.
In evaluating the social play of customers, the player typically is online for around 44 minutes per session. While the games and the frequency in which they visit the app may vary, the player spends on average less time than they would on a normal brick-and-mortar gaming experience. Wind Creek also looks at a host of other metrics including if seasonality is an issue, the engagement on the app as it relates to their brick-and-mortar play before and after their initial engagement, their subsequent play after the initial engagement and a host of other metrics.
As highlighted above, Wind Creek is a firm believer in the Wallet Allocation Rule. Based on these metrics, they were able to understand how to direct players back to the facility, increasing their share of the wallet by as much of 10 times their previous play within the facility. This is all driven through the rewards program, driving customers back into the facility for gaming and non-gaming amenities. This is as opposed to letting them choose other forms of entertainment with their disposable income dollars.
The greatest success has been players within two to three hours of a Wind Creek facility. This is focused on local play and not on someone that is coming from outside of the region as a tourist. This engagement plays well for tribal gaming, as the majority of those customers are within that two-to-three-hour range.
Some may ask how this may work within a jurisdiction that already has iGaming and sports betting, not just brick-and-mortar gaming. Wind Creek’s facility in Bethlehem provides such an example, as Pennsylvania has allowed iGaming and sports betting over the last several years.
It also provides a good regional example as it sits within an hour-and-a-half drive of midtown Manhattan and crosses into other states. The range of increase in brick-and-mortar play after social engagement was similar to those of other Wind Creek facilities, if not exceeding them. It continues to show the opportunity for facilities across the country to grow their gaming and non-gaming revenue from the local market.
Understanding the player is not done in a single snapshot; it is one that requires continual monitoring and looking at reinvestment into the player. This requires that the tool must continually be monitored to tie back into the brick-and-mortar experience. In the end, it generates more revenue for the facility, both gaming and non-gaming. Ultimately, it creates more loyalty from the consumer and keeps them engaged.
The Next Chapter
The lessons on free-to-play are very clear. This can serve as a driver for casino gaming and even other forms of gaming, including sports betting and iGaming. Ultimately, it is driving customers back into the brick-and-mortar experience if done properly.
It does not have to be one or the other as some believe has been the case, as some have been fearful of the effects of using technology outside of the casino floor as a driver for overall engagement. Wind Creek has proven this philosophy, and is an example for others in the industry to follow.
Tribal nations have always relied on other tribal nations to lead the way on strong solutions from within the gaming industry. Tribes are a trust source of knowledge and have created a collaborative relationship to help these enterprises grow. Wind Creek has a proven track record on free-to-play not only for tribal entities but also commercial gaming. As Wind Creek continues to develop this tool, it is one that should be used in other markets.
The gaming industry is coming off a great 2021. However, wallets are becoming tighter as disposable income becomes less with the current economic constraints. It is important that the industry look at how it can continue its current growth trajectory. It must look at various ways to transition those disposable entertainment dollars back into the brick-and-mortar facilities as those dollars become more competitive.
Free-to-play has proven to be a good source to drive additional gaming and non-gaming revenue into facilities. Driving additional dollars into the facility has always been the key to growth as well as attracting new customers to the gaming experiences. Operators can take these lessons to continue to grow their own enterprises, understand the player in a better way, and engage with them for future loyalty.
