For a company that depends upon frequent visitation, online gaming would seem an anathema to that strategy. To be sure, online gaming actively encourages players to stay home rather than get dressed and drive to a casino. It’s the ultimate in convenience gambling.
Yet, Station Casinos recently acquired the majority stake in Fertitta Interactive, the online gaming arm of Fertitta Entertainment, which is branded as Ultimate Gaming. But there’s a method to the madness, says Station Casinos CFO Marc Falcone.
“Our view all along with online gaming has been that federal regulation, poker only, should be the primary stepping stone to evaluate the success of the online poker to begin with, number one, and then take next steps into other areas of gaming,” he says. “One of the things that give us a competitive advantage in Nevada, frankly, is that we have the largest database of locals customers and repeat visitation. We feel that will position us to not only communicate with our customers on the regular frequent visits, but also through the online channels. So we are in a better position to provide the offerings and the points to our customers, whereas if they’re playing at home they can redeem for the same type of offers, and will still create that frequency of visitation.”
Tobin Prior, a former development senior executive for Sun and Kerzner International, is the president of Ultimate Gaming. He believes that the poker-only designation is important for the gaming industry to test the impact of online betting on their land-based products.
“We are in favor of a federal bill that would legalize online poker,” he says. “In Nevada, we’re ready to implement our system once the Gaming Control Board authorizes us to do so. That will mean only online poker, so we’re comfortable that game will not disrupt the frequent visitation you see today at Station Casinos or impact on current jobs and investment. Full online gaming could be another matter.”
Station Casinos has been investigating online gaming for several years now. In fact, the company agreed to a partnership with Full Tilt Poker just weeks before the infamous “Black Friday” indictments ended that relationship in 2011.
The company decided to focus on developing a system and content that the company would own and control. In October 2011, Fertitta Interactive agreed to buy CyberArts, a California-based technology company that had provided games and technical solutions to several lottery, bingo and poker online gaming companies in Europe. The company realized that it would have more control over its online gaming offering and presence if it took this route.
Prior says Ultimate Gaming grew out of the CyberArts purchase, but the model has been changed substantially.
“We took the B2B model used by CyberArts and turned it into a B2C model,” he says. “We had all the technology experts and the engineers, but we didn’t have the marketing and customer service component. Now we do.”
Prior says Ultimate Gaming has several advantages that no other online gaming provider has. Rather than contract with a systems provider, by operating its own system, the company will have more control over its own destiny, says Prior.
“We’ve got an entrepreneurial leadership team, a land-based gaming operation with lots of experience in a strict regulatory environment, proprietary technology with experienced development experience, and a brand that will span the next generation,” he says.
In addition to Station Casinos, Ultimate Gaming has an exclusive marketing partnership with Ultimate Fighting Championship (UFC). Prior says that relationship will pay big dividends in the future.
“UFC is a trusted name,” Prior says, “and research shows that people will seek out a trusted name when gambling online.”
The brand is already being promoted at UFC events, with its logo on the octagons where the fighting takes place. Best of all, the demographics of UFC fans are exactly the same demographics of online gamblers.
In the social media area, UFC has more than 10 million followers on Twitter versus only 2.4 million for MGM Resorts, the top Las Vegas Twitter casino. Online poker demographics are almost identical to UFC when it comes to gender: 74/25 for online poker and 63/37 for UFC. Best of all, a recent survey showed UFC fans are almost twice as likely to have gambled online within the last 30 days than the average adult.
The States Equation
Ultimate Gaming is ultimately prepared for the online gaming world by offering a large platform of online games. The site offers 20 variations of poker and another 14 varieties of casino games, some aimed at the Asian gamblers.
This allows Ultimate Gaming to participate in any of the approved online gaming jurisdictions, pending licensure. But herein lies the rub. While Prior and Station executives clearly prefer the federal path to online poker, that route is very questionable at this time, and the state-by-state legalization currently under way makes the path to success more complicated. Falcone says Ultimate Gaming is going to be flexible, but it plans to be a player not only in Nevada, where it is currently licensed, but in other states that have entered the arena.
“Until we have a better clarity around where Nevada is positioning itself with poker, versus a broader online offering, it will be difficult for us to say how we’re going to approach it,” he says. “But I think we’re adequately positioned from a technology and an offering standpoint online. With so many variations of poker, and the additional table games, we also have several areas of slot development, licensing and content already agreed upon. So from providing the offerings, we’re positioned well. We’ll just have to see which direction the regulators take.”
Prior, who was involved with an online gaming effort via Kerzner International early in the 2000s, says the company can’t sit back and wait for things to happen, which is what occurred in those days.
“We need to be proactive when it comes to the legalization of online gaming,” he says. “We need to be aggressive in public relations and get into the market. It’s not a given you’re going to make money, but you’ll never know until you get up and running.”