“Trends: Slots and online gaming, a growing society”

Moderator Augusto Dechat started the issue asking the speakers about the current situation of the online gaming market.

John Connelly said that, in the online casino business, the table and slots category are the most profitable, and that, on the other hand, the amount of profitability in online poker is minimal. Marcus Yoder agreed by saying: “Poker brings people in but it doesn’t make a lot of money”, and affirmed that, in Nevada, 45% of the market is sportsbetting, then, slots and table games, and then bingo.

“us$ 35 billion are spent in online gaming”, assured Sebastían Salat, but explained that it does not include statistics on applications in social networks. “Half is spent on sportsbooks, followed by poker, online bingo, casinos and lotteries”. Besides, Gavin Isaacs gave his opinion on the matter: “I think sports continue dominating the sector.”

Dechat then mentioned social gaming and online gaming, and the role of social gaming in the real gambling business.

Isaacs said that social gaming is a way to attract new customers. “It offers a whole new market. It opens games to a whole new generation of players.”

Connely pointed: “If you look at distribution channel for gaming, you think in casinos. If you talk about social gaming, you need a wireless device to do so. When you develop your strategy online, you need to know which is the distribution channel to contact those players. Facebook is a way to do so. From January up to now, the cost of acquiring a new player on Facebook has increased a lot. More and more companies are advertising to those players”.

Salat mentioned that the challenge is not to to compete for the money but for people’s time, and added that it is difficult because there are many forms of entertainment.

He then added: “Our mission is, presenting our gaming content, to boost people to play online or in traditional casinos; it means, to expand the market”. Moreover, Salat said that another issue is to show the brand to the market. The online casinos operate in a way that people pay a modest sum of money to play, so they are motivated to try. “Social gaming is transversal, so it is a way to reach the new generations”.

Yoder remarked that, from the social perspective, is a new opportunity. It has to do with experimentation. “When you look at the players, when they get out of the casino, they still play online. Facebook is not the only platform, but the most important in Latin America. From a marketing perspective, you need to be online.”

Then, they talked about the future of online gaming for the next five years.

“Nothing happens quickly in gaming. 20% of revenues are online”, said Isaacs. “It is too short time to develop. I think this proportion will not change much.”

Yoder commented that they expect a rapid expansion in Latin America, for example, in Mexico. “We are very active in Mexico, Argentina, Chile, Uruguay. I think in the next 12 months online gaming will develop at a fast pace.”

Salat thinks that a convergence of traditional gaming, online gaming and social gaming is being developed.  “In my view, online gaming will be a complement of traditional gaming. There will be an interaction among them. There are applications in which traditional gaming goes beyond the casino experience. The future is based on the convergence of the three types of games”.

Finally, he commented that Europe is the continent in which online gaming is more developed. The goal has been that  Internet companies remain in each country and pay taxes there. Another important point is the protection of underaged and gambling addicts. In this aspect, control is superior. That is the trend in UK, Spain, Italy, Baltic Countries.

Role of land-based operators
Connelly said: “We can all agree that 5 years from now, the online gaming will be different. We spend a lot of our time and investment related to the technology. We will need to be flexible in the future. You have one supplier providing you poker, bingo, casino...you have to be flexible and change suppliers in order to bring more offers and be competitive. Traditional casinos have more advantages with regards to online casinos, because you have more experience. When you connect the online world with the traditional world, you have more chances to succeed”.

“We are trying to bring the online gaming experience back to the casino”, pointed Yoder. “When you look at the content you offer, basically, any provider can create a game that can be put on the IGT platform. You have the Double Down platform to put that content.”

However, Isaacs presented a different view to his colleagues. “I think there is a good opportunity. Marketing online is very different from traditional marketing. I think you have to take full advantage, so further investment is required.”

Salat said that WMS is also working on the integration of their games with platforms belonging to third-party operators, and named successful experiences of combining both worlds: presencial and online. “In Barcelona, EPT is a successful event that collected much more money that any other event. It is an example of how online gaming may boost land-based gaming”.

He added that, in the future, they see online gaming as an additional distribution channel; as an opportunity to increase land-based gaming more than a threaten.

Yoder highlighted: “Online gaming is the future. You have to engage with regulators, with operators, with the partners. You have to invest in a team to do the research, to investigate.”

Transition from traditional gaming to online
“I don’t 100% agree that online gaming is the future. Think in Asia. I think there is a great opportunity in land based gaming”, assured Isaacs. Besides, Yoder said: “People want to play on their tablets, on their phones. The concept of EGM is doing to go away. We are going to do that in Las Vegas and New Jersey as well.”

Legislation
“In Nevada, legislation was very well done. They benchmark against European countries. They protect the operator. In Europe, suppliers or industry are more controlled,” he said, and added that in Nevada, suppliers, regulators and operators have to be licensed. They have to enter the state of Nevada. “Some of the largest online gaming companies worldwide have recently withdrawn from US. As regulators, it is important to protect your business, because these companies do not work with the same rules.”

Salat added that Nevada has the advantage of having started from scratc. “In Europe, the fact is that every new operator is in disadvantage”.

Yoder mentioned Canada as one of the best approaches in responsible gaming. “They went from 95% offshore to 95% onshore.”

Another issue was how economic downturn will affect the online gaming regulation
Isaacs claimed that there will be a tax increment on casinos. On the other hand, Connelly advised operators: “If you want to drive an agenda, you have to work collaborative (in Argentina or other countries). If you dont, business will be put in jeopardy. If you want to protect your business, you have to work together. No one has more political power than traditional casinos in the sector. You have to form associations to work together.”

Salat claimed that, in Europe, regulation did not consider diversity. “There is not a unique solution, but a specific solution for each country”

Gaming addiction and money laundering
Yoder mentioned that they actually track online players and have a lot of information, and that the government is the one that has to establish the rules. Isaacs agreed with him, and Salat added that it is easier to do prevention in online gaming than in traditional gaming.

To sum up, Connelly affirmed: “I think the business has to be both traditional and online. Perhaps online business will not grow much in 5 years, but you put your business in risk if you are not online”.