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Moving Target

When is the right time to engage in online gaming? Part 2

Moving Target

Last month, we began this series by describing the reasons companies need to consider free play and social gaming in preparation for real-money online gaming. This month, we’ll outline some of the ways this can be accomplished.

Understanding The End Game

The majority of providers seem quick to recognize the benefits this can have for their organizations and the industry at large.

Aristocrat Technologies is one such provider that has significantly modified its offerings over the past year, and predicts that its real-money product will bring value back to free-play and social-gaming-only clients.

Earlier this year, Aristocrat obtained the rights to the platform of GameAccount Network, the former partner who helped develop the free-play site for Maryland Live!, and notably, the acquisition of Product Madness gave Aristocrat instant leverage in the social gaming space, rounding out the cmpany’s capabilities across all three tiers of online—free play, social and real money.

Jeff Connors, a senior director with Aristocrat, states, “The iGaming space in the U.S. has evolved dramatically over the last few years, and so has Aristocrat Interactive. Our pending social B2B white-label solution is set to launch, and will provide our customers an alternative platform to take advantage of the social gaming space. Sites for Island Resort in Michigan and Maryland Live! will both soon be branded social casinos. The new site includes unique gamification features across a range of super-fun slots and table games. This is what our clients have told us they want.

“Additional focus areas for Aristocrat are growth of the online library and driving content across multiple channels to include mobile and tablets,” Connors continues. “We believe mobile will be the primary access point for iGaming in the future.”

GameAccount Network, Aristocrat’s former partner who is now aligned with Foxwoods Casino, is hoping to leverage its U.K.-based expertise within the New Jersey jurisdiction. Dana Takrudtong, VP of sales for GameAccount, believes her firm is well-positioned to take advantage of the multi-tiered free play, social and real-money progression in the U.S., particularly because of the product’s back-office and consumer-protection integrations—components many operators are surprised to learn are not typically included in some providers’ free play and social solutions.

This point is worth further mention, since operators whose primary purpose in launching a free-play site is to expand the player database of potential casino visitors, ensuring that even free-play participants are of legal gambling age.

“GameAccount Network’s Simulated Gaming is a unique freemium B2B option for casino operators,” Takrudtong explains. “We deploy the play-for-fun experience from a wagered platform, giving the licensed operator a back office which enables them to control content deployment, analytics, promotions, bonusing, monetization, and most importantly, age verification in the for-fun login process. CMS integration paired with age verification enables operators to use desktop and mobile gaming experiences to collect a wholly marketable database both online and off.”

IGT has been both the envy and target of its industry peers in the online space. IGT’s DoubleDown Casino, implemented through both the Facebook platform and individual client websites, offers an ease of implementation and limited fee structure which has allowed IGT to enroll more than 40 operators to date—an overtly notable number given most of the other major providers are counting their client volume for free play and/or social gaming on one or two hands.

Some competing providers continue to criticize DoubleDown Casino as a B2C model, although many are now following IGT’s footsteps with their own successful Facebook-based offerings. In either case, no one can claim that any other provider has found greater success than IGT in executing contracts and rolling out the offering to operators.

DoubleDown Casino, from the outset, allowed casino operator partners to earn revenue share based on virtual chip purchases. What has changed the past few months has been IGT’s investment to step up its marketing programs to support operators, aiming to help bring players back to the casino. Additionally, while IGT is known in the industry for not partnering with other manufacturers for content with respect to DoubleDown Casino in North America, they actively do so for real-money gaming in Europe, and are following that path when it comes to regulated markets in the U.S.

Bally Technologies should find itself in the unique position of providing both platform (Golden Nugget) and game content in the soon-to-launch New Jersey market. Bally is the unquestionable industry leader with its mobile app, but has yet to announce a formal social gaming solution. Bally also has the benefit of added momentum behind it from its recent announcement regarding the acquisition of Shuffle entertainment. Advancements in its poker solution can’t be far behind.

Williams Interactive has also dramatically modified its solution throughout the past six months, launching its Play4Fun offering this past summer, with its first client, Snoqualmie Casino in Washington, incorporating its social site into its property web page. Perhaps of equal note is the success that Williams has found with its own Facebook offering, JackpotParty.com, which has shifted the social components being offered to its clients. The industry is also watching to see if the pending acquisition by SciGames will modify any other strategies for Williams.

What Else Can The Real-Money States Tell Us?

New Jersey has also demonstrated that there is an unquestionable need for a more accepted methodology when it comes to online gaming forecasting and revenue projections. Look no further than the disparity of market forecasts for that state—ranging from approximately $30 million in tax revenue to over $250 million—and it is easy to understand the questions being raised by operators, government officials, communities and providers. How can a state like New Jersey plan and budget for online without a reliable forecast to look to?

The Innovation Group and its consultants have been approaching our market assessments with varied methodologies, applying trends from existing online markets and layering in feedback from surveys down to the operator’s player database to more truly assess the potential. Time will tell whose estimates will ring true as the states go live.

These concerns also apply to operators in unregulated markets. At the end of the day, who could blame them for questioning the initial price points the providers presented for free play and social gaming-only options, since they have more indirect monetization requirements? The initial offerings simply didn’t pencil out for many operators, but with the shift in products we have seen as of late, more operators are taking a second look. Why? Because they are now less expensive, easier to install, interface more easily with existing player development software, and offer some element of monetization.

Expect More Change

When legalization will happen for remaining states or at a federal level remains to be seen, but one thing we do know is that technical evolution and advancement will never end. Revolution is inherent to the industry, the process and online environment, and change is something that operators have to embrace if they are going to be in the space. The key, we tell our clients, is to find the right partner who is dedicated to advancement and has a solution that is flexible and open to dynamic change—and the player’s insatiable need for diverse content.

We share the feedback received from our clients that the providers have come a long way over the past year in refining their offerings, and with any hope, the outcomes of these first few regulated markets will advance this further. If an operator is on the sidelines waiting for the fast-advancing trends inherent to the industry to slow down, and the perfect final solution to appear, by definition they will never be able to join.

Is it time for your operation to engage?

Kimberly Arnold is chief operating officer of the Innovation Group and co-manages the firm’s Innovation Interactive practice. She has worked as a strategic adviser and research specialist to tribes, providers and lotteries specific to online gaming throughout the past several years. Arnold can be reached at 303-798-7711 or [email protected]   ?

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