hat is the most significant opportunity that you’re seeing in the US at the moment?
The US market holds plenty of opportunity – it’s just a question of understanding the opportunities and then taking advantage of them.
When you look at regulated real-money iGaming in the States, it certainly has its natural boundaries – only 4% of the population is currently able to gamble legally online. In the states where real-money is regulated – New Jersey, Nevada and Delaware – they’re doing well and the state governments regulating these advancements have been proactive and progressive in their thinking. We therefore expect continued improvement and innovation as other US states regulate.
At the same time, the market’s current state shines a light on alternative opportunities. US land-based casinos are well positioned to make a move online. They can leverage their current assets, including brand name and customer relationships, to develop an online gaming product that expands their digital presence. In terms of product, there are two opportunities for casinos – launching a free-money casino or a virtual currency social gambling product.
Among land-based customers, there’s strong appetite for digital gaming content. Casinos are therefore in an excellent position to expand their online presence with a social gaming product that will meet this demand and also work as both a customer acquisition and retention tool.
Understanding the current situation with regulated iGaming in the US, how do you see this sector developing over the next few years?
I see it as evolving state by state, product by product and unique approach by unique approach. In terms of which markets will be next, Eilers Research are forecasting that Pennsylvania will go live in 2017, California the year after, and New York regulating real-money in 2019. This seems to me a reasonable estimate.
All three states are massive markets. California has the biggest population in the country with over 38 million people and when you add Pennsylvania and New York that brings the total north of 70 million, which is more than the entire population of the UK. It would seem there’s great potential for the real-money market in the future.
To look at the US from a technical standpoint, it’s going to evolve in stages, just as we saw in the European market about a decade ago. The first stage is compliance and regulation, followed by the implementation of effective geolocation and payment solutions, and then content development. The final and most critical stage is marketing.
Against this backdrop, there’s also the untapped opportunity involving land-based casinos I mentioned earlier. The most successful digital brands will be the ones leveraging land-based branding to achieve the greatest customer stickiness and loyalty.
For land-based casinos in non-regulated states, what do you perceive are the hurdles for these properties as they move online with a digital gaming product offering?
I’d say that the first obstacle is making the right choice when it comes to platforms and the gaming products themselves. In terms of games, should a casino focus more on a free-play poker product or is it better to focus on social casino? If casino is their focus, should more emphasis be placed on table games or social slots? Casinos need to carefully evaluate the pros and cons of each and every platform and social gaming product on the market.
Once they’ve made that choice, the next hurdle is how to integrate the digital gaming content with their land-based property. For instance, do they allow online players to win on-property prizes – hotel stays, restaurant vouchers and offers for the casino floor – or integrate the loyalty program whereby customer property profiles are linked to their digital profiles for increased engagement? Both can be highly effective for customer retention and also for attracting new customers to visit the property for the first time.
The final challenge is marketing. Casinos need to look at how to market the digital gaming products using their current resources, tools and skill-sets.