Faisal Siddiqui, CEO and co-founder of Real Deal Interactive, explains the growing importance of the US land-based sector in social casino
There’s been a lot going on in the news lately about online casino gaming. Steve Wynn partnered with Caesar’s Interactive to offer online gaming in New Jersey, then put those plans on hold, stating “online gaming does not appear to be a good entrepreneurial opportunity.” Sheldon Adelson is essentially declaring war on online gaming, announcing he is “willing to spend whatever it takes” to stop it.
Adelson cites many reasons to block online gaming, ranging from protecting our nation’s youth to safeguarding land-based casinos from cannibalisation. While there certainly are a number of reasons to be cautious when it comes to online gaming, it doesn’t mean that brick-and-mortar casinos need to stay away from offering casino gaming on the internet completely.
Since online casino gaming in the US is still in its infancy, with states having been given the go-ahead to decide on their own whether to allow it or not as recently as December 2011, the casino industry as a whole has been slow to incorporate this new business model into its fold. Because of the heavy regulatory restrictions involved in allowing and administering casino gambling via the internet, there are only three states that currently offer some form of online gaming – Nevada offers online poker only, and New Jersey and Delaware offer all casino games online. There are also the costs associated with operating an online casino such as development or acquisition, marketing, compliance, payment processing and KYC to name but a few. Online casino gaming requires a substantial investment in something that hasn’t yet been proven in the US.
One market that has been proven, and continues to grow signiﬁcantly is the social casino gaming market. Social casino gaming has been one of the fastest growing subsegments
in the free to play casual game space for the last few years. And while most of the major players in this segment, through acquisitions, have so far been traditional slot equipment manufacturers, more and more land-based casinos are starting to see the beneﬁ ts of investing in social casino gaming.
Firstly, and this may be the most compelling reason of all, social casino gaming has zero regulatory or jurisdictional restrictions – the market is completely unregulated. There are no limitations as to what games casinos can offer, or where players have to be located – after all, remember, this is NOT gambling, it is pure entertainment.
Social casinos can offer any games to anyone, anywhere. And unlike “grey” markets where they are limited to sweepstakes or amusement games, social casino gaming can offer real slot machines for real casino-style game play with no regulatory issues.
Land-based casinos can use social casinos as a brand management tool, introducing new players to the casino brand and building the brand’s credibility and equity by offering players an authentic and rewarding casino experience. It is important, however, that these social casinos offer real casino games – the same games developed by slot manufacturers that are found on casino ﬂ oors – as well as unique player rewards or experiences, in order to successfully create brand loyalty. Players expect the same playing experience and customer service that they would ﬁnd in a traditional casino.
Utilising the brand extension of the social casino, land-based casinos can begin to build their databases of new customers. With the social casino gaming market growing by leaps and bounds, upwards of 173 million players worldwide, this can open up a whole new demographic for the casino.
A recent survey by Trafﬁc Generation found that 32% of social casino players visit a land-based casino “more than once a week” and 12% visit “once a week”. That means that 44% of social casino players will visit a casino at least once a week.
Not only can a social casino help to drive new player trafﬁc to a land-based casino, it can and should also be viewed as a legitimate revenue channel, similar to retail, F&B, hotel and other alternate revenue streams of a casino. Eilers Research reported that the social casino gaming market saw gross revenues reach $1.98bn at the end of 2013, and
that number is projected to grow by double digits over the next few years. Social casino gaming should not be viewed by land-based casinos simply as a leech-in business, but as
a serious business and highly lucrative transition (if not alternative) to online gaming.
Innovating to succeed
The bottom line is that online gaming in the US is getting more and more attention. And whether or not online gaming becomes a mainstream reality remains to be seen. But land-based casinos that want to get in on the internet-based gaming action don’t have to wait until online casino gaming is a reality in their jurisdiction.
They can do something now. Social casinos are continuing to evolve and getting closer to the experience of real-money gaming. If and when online casino gaming becomes an actuality, the land-based casinos already operating social casinos will be poised and ready to ﬂip the switch.
Moving forward, the key to succeeding with social casinos is to be as close to the real casino experience as possible – players expect the real thing. As we have clearly seen by the two largest players in the space, those that can offer content as close as possible to the real thing are winning.
Gone are the days when social game developers just put out a slot game that is fun and looks pretty. Many social game developers, some of the biggest in the industry, have tried to migrate to real-money online gaming and have failed. In order to be successful as a transition (or alternative) to real-money gaming, social casino operators need to have not only social gaming expertise, but also the casino industry insight that only comes from years of experience in the casino games industry.
It’s not just a social gaming business, it’s a casino gaming business. And with having to offer only real licensed gaming content from casino equipment manufacturers, this begs the question on what is the future of our industry. Is ‘innovation’ in the social casino business dead?