As the gaming industry has evolved, one of the keys has been how advancements in technology can advance the experience for the guest. The industry continues to engage the existing customer but also attracts a new customer into the mix that may not have been interested in casino gaming previously for various reasons.
Normally, this customer is one that may have not previously enjoyed the gaming experience because of perceptions of the industry or the lack of desire to go on a casino floor. However, as the industry has moved, so has the technology that has made some of these games more attractive to a wider audience. This has been through the use of interactive tools including online gaming, mobile gaming or sports betting as drivers to engage individuals into the brick-and-mortar facilities.
Driving customers into the facility while using interactive gaming as an extension to the floor has always been a delicate balance. However, strong operators have continued to find ways to avoid the friction between these two worlds and create a symbiotic relationship that allows the customer to enjoy the experience in an interactive setting as well as in person to drive both gaming and non-gaming revenue. This has broadened the experience and customer base that has in turn driven additional revenue opportunities and further diversification of the product.
Free to Play as an Entry Point
Both commercial and tribal entities have looked for the “secret sauce” to try and use free-to-play (F2P) games online or through a mobile device to attract a new customer to the mix. While iGaming has largely not been adopted as quickly as thought in some markets, free to play offers a strong entry point with a lower cost of acquisition for a new customer to the land-based experience, but also provides entertainment for those patrons when they are not at the facility.
One such example of this has been the free-to-play interactive gaming that has been established by Wind Creek Hospitality, owned by the Poarch Band of Creek Indians. Wind Creek, which has land-based properties in several states and the Caribbean, has integrated its free-to-play program into the overall guest experience to drive both gaming and non-gaming revenue.
The mobile app links to their rewards program while allowing the player to engage when it is convenient to them. This allows the player to translate those rewards and be redeemed in several non-gaming aspects of their land-based operations including hotel, getaways, and food & beverage.
In the convergence of “whatever whenever,” this has also translated into additional play within their facilities, as guests will enjoy the entertainment of casino gaming while redeeming rewards on non-gaming amenities as much as or more than they did before. They have become further engaged through the interactive experience.
Other tribes and commercial operators have found the same success that allows both the guest and the operations to benefit from this engagement experience on both sides of the equation. This further exemplifies that land-based gaming can be driven by interactive play, whether it be free-to-play or real-money games.
The same can be said for driving real-money gaming as an extension of the casino floor. Free-to-play games can also be a transition to real-money gaming if intersected properly into a player rewards program, and it can go across all segments. Not every player always wants to use a real-money game to engage in entertainment. Free to play has provided a strong option for player acquisition, retention, and engagement in the overall guest experience.
Sports Betting as Another Entry Point
Since the repeal of the Professional and Amateur Sports Protection Act (PASPA) by the U.S. Supreme Court in May 2018, the focus on sports betting has been intense by industry leaders. The intersection between sports and wagering is nothing new, as illegal wagering was occurring offshore for years or with a local bookie until PASPA was overturned due in part to the state of New Jersey and then-Governor Chris Christie’s desire to create a legal and regulated market.
To date, more than 30 states and jurisdictions have legalized sports betting in the United States. However, one of the balances was to drive these new and existing guests into the casino, but also maximize the experience by allowing mobile wagering; this is not only convenient but also allows for the engagement of the player during contests and on their own time.
One of the challenges with sports betting is to get the mobile customer into the casino and create a seamless experience that also drives additional gaming and non-gaming revenue. Adding to this challenge is the issue of acquiring customers, which in some markets has gone into the thousands of dollars to try to get market share and drive customers to specific platforms. As the continued shift within the market is to not only drive customers to other aspects besides sports betting, it is also to find profitability within the sports betting space at an earlier rate than has previously been desired by some operators.
Prudent operators right now are looking at how to balance their marketing spend as to not “blow the budget” just to encapsulate market share at the expense of long-term profitability. This is in addition to creating an interactive and innovative experience that understands the customer. Creating loyalty programs to drive people into gaming facilities will further help highlight how creating an immersive, land-based sportsbook can help drive the customer in during events to help both gaming and non-gaming revenue grow beyond their current levels.
Free to play also offers a solution for interaction between the sports bettor and the operator as well as to other key stakeholders including teams, leagues and media companies. As the landscape continues to evolve, fans continue to look for different ways to interact with sporting events.
Sports bettors and fans looking to engage in sports betting are looking for that continually innovative experience. Companies like FanBeat, an app that was designed around the fan engagement process, has found, like others, a cost-effective way to attract and monetize the fan experience in a lower-cost method than some of the current promotions that are being provided in markets as they launch.
Mobile wagering continues to be the dominant revenue driver for sports betting, as it on average is over 80 percent of the revenue in full mobile markets. However, translating these guests into the land-based experience is key to create the driver for brick-and-mortar facilities. Interfacing with the rewards program at MGM Resorts not only integrates sports betting and online gaming experiences through BetMGM, but also expands the offering to include both gaming and non-gaming opportunities for rewards across the enterprise.
iGaming as the Next Step
Like many of the other advancements in gaming, bringing the casino experience to the internet or to a mobile device has been a huge advancement. It has also been riddled with claims that it will be the death of the in-person gaming experience, taking these brick-and-mortar facilities into the past. If done properly, there is no friction that is caused between these two segments, and they can be drivers for both segments of the market to create further engagement with customers.
A recent study commissioned by the iDevelopment and Economic Association (IDEA) highlighted that there is a distinct ability to drive additional revenue to the casino, attract a different customer to the market, and not have an impact on the existing land-based revenue.
The study, which was done in coordination with the Casino Association of Indiana, highlighted how establishing a legal, competitive market with safeguards established could drive consumer demand for iGaming while also complementing the state’s land-based operators that have a strong and robust casino gaming business. This is in addition to the existing sports betting market that is still in its early years.
The study looked at markets that had iGaming prior to the start of the pandemic and evaluated their gaming revenue return from land-based gaming as well as the state of online play over the same period. This included some of the key iGaming markets of New Jersey, Pennsylvania and Michigan. It compared these markets to those that did not have iGaming to see if there was an effect on the return of land-based revenue.
The study took into consideration the most recent effects on the industry from the Great Shutdown and further fluctuations in government mandates that the industry has faced over the past two years. After evaluating both the Northeast and Midwest markets in the United States, the study states that “based on currently available data, both group comparisons recovered in a similar fashion highlighting that iGaming had little to no impact on land-based revenues.”
The information in the study highlighted that Indiana could add significant revenue to the state based on either the current legislative proposed tax rate of 18 percent or the recommend tax rate of 15 percent that creates the optimal tax rate to allow growth and reinvestment in the market to effectively compete with the existing illegal market.
Regulatory Consideration
When trying to create the perfect paradigm between the interactive and land-based spheres, it is not only important that operators in the market understand how to create the ideal experience to create a balance between these two worlds. It is equally important that the regulatory environment also create the same healthy balance to allow for a frictionless experience for the operator and the customer.
As the market in the United States has seen a growth in sports betting over the last few years, the infrastructure for consumer protections is already in place. This includes key components like age and identity verification, know-your-customer (KYC) systems, geolocation, cybersecurity, secure payments, anti-money laundering and anti-fraud tools, customer data security, and responsible gaming measures. With technology as an aid, there are arguably more protections, security and verifications that can be in place to aid the guest and operators.
Regulation, though, must keep up with innovation and technology. This includes verification that the games are being played to offer the consumer a solid experience, whether they be free-to-play or real-money games. The partnership must exist to allow education equally between operators, suppliers and regulators in the industry.
This will add a new, dynamic environment to be created and is key to a frictionless experience for both land-based and online operators. Markets such as New Jersey, Michigan and Pennsylvania have moved forward with these initiatives while other jurisdictions are playing catch-up to add these advances, protections and innovations to the regulations.
Responsible gaming is a key measure to this effort. As technology continues to evolve, it also offers opportunities for both land-based and interactive gaming to further understand the player and provide additional protections. The ability for players to set limits through apps like PlayMyWay, to understand the level of play they may have both in the land-based and online experience, and protecting consumers that either desire to opt out or are not of age, benefit the entire industry. It utilizes technology that cuts across both platforms, further reducing friction between the experiences.
The industry continues to work through the expansion opportunities that interactive offers in terms of product, experience and innovation to create that balance with the existing land-based product. Those industry leaders that have already found the “secret sauce” will continue to excel in providing an exceptional customer experience to their guests but also drive revenue through both gaming (land and interactive) and non-gaming sources. Those operators that continue to embrace the “old-school” thoughts that land-based gaming will go by the wayside to online will be left behind.
The industry has continued to evolve beyond its initial roots. It has been long said that destinations like Las Vegas would die with expansion beyond Nevada. However, Nevada has seen 10 straight months of $1 billion in gaming revenue. There is a customer that will be driven by the interactive experience that the industry is currently missing. It can attract that customer with the right innovative and engaging experience.
One of the many things that can be learned from the pandemic is that people crave an engaging experience and will return to those experiences when they feel safe. They also favor a new experience where the industry can continue to grow and should embrace.
Creating a frictionless environment can be achieved in developing the balance between land and interactive gaming. It is being accomplished today and will be embraced by many more in the years to come.
