The social casino universe may be getting more crowded, but interactive products remain an increasingly vital tool for growing land-based casino revenues, explained a panel of experts at the AGS GameON conference Wednesday.
By using strategically using the products to interact with and entice players once they’ve left a property, the panelists explained that casinos can better build brand recognition, monetize their players and capture a greater share of their customers’ wallet.
All of this translates into increased visitation and more customer spend at the land-based parent.
“What we’ve seen so far in a year-and-a-half of operating Play4Fun is that they increase their visitation to land-based casinos by over 20 percent.” said Richard Schwartz, president of Rush Street Interactive, said of the relationship between his social casino platform and SugarHouse Casino in Philadelphia, which is owned by Rush Street Gaming.
Furthermore, 85 percent of social casino users visit a casino at least twice a year, according to research from Eilers & Krejcik Gaming.
Bryan Bennett, senior vice president at AGSi, laid out a strategy by which casinos can promote interactive products to brick-and-mortar customers, allowing those customers to earn credits playing social games online and then redeem those points upon return to the land-based property.
But the existence of many of the major manufacturers and gaming operators in the market has made entering the space somewhat daunting. This has made acquiring customers and scaling a social casino business a much tougher proposition compared to three to five years ago.
“There are some big, big [companies] in this market and it’s not easy to take these players and convert them to your app,” said Adam Krejcik, an analyst with Eilers & Krejcik Gaming. “The glass half full view is that this is a huge market opportunity waiting to be disrupted. The flip side is that it is challenging. There are very large companies that are very well financially backed.”
As the market has matured, the cost of acquiring new customers has grown steeper.
“[User acquisition] is far and away the biggest expense for any social casino game company,” Krejcik continued, adding that this expense typically counts for anywhere between 20 to 50 percent of total revenues generated and poses a significant barrier to entry. “Usually that’s the biggest challenge for people outside the industry. You’re acquiring players with money that you won’t make back for about 12-18 months.”
But that should not necessarily deter land-based operators from exploring a social offering of their own that is geared toward their own player base, particularly if the product is delivered not just as another gaming offering but as a marketing tool that creates greater customer exposure.
“We think of it as a marketing channel that actually pays for itself. You can communicate with players after they’ve left your facility and gone home,” said Matt Cullen, CEO and founder of Stealth iGaming.
Cullen also emphasized that customers are likely already playing social games somewhere else, so there’s an incentive for a land-based operator to create a product that can reel them back in. “Why not pull them around your brand?,” he said, noting that customer play can be “promiscuous.” “There’s no reason not to offer them something.”
The panelists also played down any concerns about cannibalization from social or real-money online casinos on brick-and-mortar properties.
Schwartz said that online play at Golden Nugget in Atlantic City – where Rush Street Interactive operates – has served to both bring in new customers and increase spend from existing ones. “There are very few marketing tools in our industry that get both results.”
Offering free-play social products also carries bigger picture strategic implications by providing a potential springboard to transition players into real money games should online gaming expand into new jurisdictions. If players are already engaged on a free play casino, moving them to real money would be like “flicking a switch,” said Schwartz.
