Gaming and casino entertainment, especially in America, has a new, daunting dawn coming—the online and mobile arena of legalized real money gaming.
While online gaming is old hat in some parts of the world, there is still room for an incredible amount of innovation and opportunity in the space. And a flood not quite the size of the Noah’s Ark era will take place starting in November.
(If you’re caught up on your state of the markets opening, licenses available, companies already live, feel free to skip the next four paragraphs.)
While Nevada already has legalized real money poker live and under its belt (and the title for being “first” is sealed and delivered), we can see that market places have a long way to go for maturity. The one lone ranger in the market, Ultimate Poker, is the prime and only example. Ultimate has made incredible headway being first (out of the some 32 companies who’ve applied in Nevada), yet their reality isn’t all sunshine and rainbows and cash cows. It is clearly a tough market for technology development and innovation, but it is an even tougher market for customer attention— even when you’re the only game in town.
Delaware is on the radar to be the next state to debut real money gaming, aiming for the end of October, with their free play partner and offering already available via IGT’s DoubleDown Casino on Facebook. Delaware is unique, in that it has specific and limited vendors already pre-determined both from the land-based and online offering perspectives.
New Jersey lands somewhere in the middle of the two other states with only twelve online licenses up for grabs, and almost all of them accounted for at the time of this writing. That being said, New Jersey is arguably also the market with the largest potential (in the tune of $1 billion) and will be the last to debut full-fledged real money online gambling this year, scheduled for the end of November.
We know where both the competition and opportunities will come from limited as they may seem to be. And yet, this is only the beginning as many will be watching with baited breath and anxious eyes from neighboring US states.
While everyone realizes this is the next frontier (parallel to international gaming growth), serious conversations need to be had about smart survival. In Europe, the more mature markets have seen companies come and go, swallowed up by the sign-up bonus game, fight for customer loyalty, and, in some cases, prohibitive overhead and tax structures.
Visions of building national brands have faded for now with the allure of federal legislation. Marketing investments have to become more fierce for these state battlegrounds than they ever were in the age of the mid-aughts. It is a new reality we live in, and it’s desperate for new innovation.
It’s no secret that those who build the relationships to have the advertising edge with different media distributors (be it Facebook, Google, an ad network, or lifestyle publication) will get the eyeballs. And maybe a few clicks. But will it get you loyalty and retention? And a profitable, lasting business?
The question casinos have to be asking themselves, is how do they differentiate and with who? What segments of the market are going to be most attractive for them to pursue based on gambling and entertainment budgets, time, and likelihood to play online? What value will these customers have (if any) beyond their transactional accounts? Why do players return to the same casinos, and how do you create a similar experience for them to time and again come back online?
Two older surveys attributed the most important factors for players and gaming site preference to be a combination of trust and financial reward.^ If everyone is going to compete on the same monetary qualities, the only people who will survive are those with the deepest pockets. But, we don’t think that is just the case.
In a world where it’s hard to fight for customer attention, even on your own, what will it be like with 10 others in the space? Where will the customers come from if the competition is flooding in from everywhere?
And how will you create your ark to survive?
MEASURING AND MAXIMIZING DIGITAL
A teaser of our thoughts on this is how we look at measuring and maximizing digital. Your channels, whether they be owned, earned, or paid, can be evaluated based on these three criteria:
1. ENGAGEMENT – Basically, it’s a way to measure do people care? So they follow you or subscribe, but do they open your emails? Do they comment or like? Do they return or do your channels lose value instantly after sign-up?
2. REACH & AMPLIFICATION – What’s the eyeball value of your channels? For earned and owned, this includes PR, social media, and web. Those are the channels where you can create “free” eyeballs to maximize your spend on content and advertising. This can also lead to a drop in your Cost Per Acquisition cost if you’re basically getting free advertising without the CPC or CPM. (Not so fancy abbreviations for Cost per Click or Cost per Impression.)
3. CONVERSION – Straight-forward: Do they click? Do they sign up? What’s the return on each channel?
We think establishing strong relationships with the right customers is reciprocated in your marketing spend, your business strategy, and your survival. The Wild Wild West is soon upon us and a year from now will be very different we’re sure.
What do you think will matter most for survival of the fittest in the Race to Riches? Stay tuned to our RR category for more commentary as the markets unfold and develop.
^Sources: 2005 Media and Entertainment Consulting Network Survey; 2007 eCommerce and Online Gaming Regulation and Assurance Survey by Nottingham Trent University