Seizing the Opportunities of the US Gaming Market: Offering a Digital Social Casino Experience

Nicky SenyardCEO & Founder

Income Access Group

Rory ShanahanHead of Marketing & B2B Social - InteractiveScientific Games

To set the landscape, how has the US Gaming industry evolved over the years?

Two key themes have emerged:

1. Compliance

• Compliance vs. commercials

• National versus state regulations

• Vertical specific regulations

2. Market size of land-based casinos

• Growing size and penetration of land-based casinos

• Unique approach to community and reinvestment

A brief history:

1931: Nevada legalizes gambling

1976: New Jersey legalizes gambling, restricting it to Atlantic City

1978: Resorts Atlantic City opens, first NJ casino

1999: Multiplayer online gambling introduced in the US

2014: American Gaming Association: The US land-based casino industry contributed more than $240 billion to the national economy

2009 – 2014: However, revenue growth has recently been challenging: following the US financial crisis, the casino industry’s revenue growth averaged only 0.8% a year between 2009 and 2014

2014: Some recent closures of casinos include the closure of Harrah’s Casino Tunica in Mississippi in June 2014 and the shutdown of the Clarion Hotel & Casino in Las Vegas in September 2014

Talking of online gaming, what are the main trends impacting the US gaming industry at present?

Divergence

• European market is homogenous and coherent

• US market is still evolving and remains divergent related to regulation and approach

Technology

• Technology is enabling the growth of the market and increasing engagement levels

Consumer appetite

• There is an incredible pent-up demand in the US for gaming content

Brand interest

• Brands in the US resonate with consumers and hold great value

• Organizations have the opportunity to evolve by capitalizing on brand interest and consumer appetite

Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 – federal legislation banning real-money iGaming in the US.

State by state legislation

2013: Nevada, New Jersey, Delaware regulate online poker

2014: No new states regulating real-money gaming

2015: Online poker bills before state legislature in California and Pennsylvania

2016: According to Eilers Research, no new states expected to regulate

2017: Pennsylvania online market to go live*

2018: California online market to go live*

2019: New York online market to go live*

2020: Connecticut and Massachusetts online markets to go live*

*Based on Eilers Research

Discussing land-based casinos in particular, what do you see as the current landscape for this sector?

Opportunistic

• Customer database

• Brand strength

• Market awareness

• Connection to the customers

Age of Digital

• Expansion by leveraging current customer experience

• Ensuring brands are following innovative digital trends

• Increase revenue by implementing new acquisition and retention strategies

• Understanding compliance

Challenges

• Slow pace of iGaming regulation

What choices do land-based casinos have?

Verticals

• Depending on the state, there are choices related to the five key verticals (horse-racing, fantasy, social gambling, real-money, branded social casino)

Application

• Concierge mobile

• Adopting brand partnership

• Licensing social product

2014: Social casino revenue rose 38% year-over-year to reach $2.8 billion (Eilers Research)

2015: Forecasted that the global social casino market will expand to $3.8 billion

Over 35.4 million American players, according to SuperData Research

From your point of view, what is the best focus for land-based casinos and why?

Developing a social casino product can serve four main goals:

1. Engagement and customer retention tool

2. Acquisition of new customers (beyond current geographical boundaries)

3. Additional revenue/ revenue diversification

4. Building player database ahead of real-money regulation

Separate research by Sally Gainsbury (academic) and US gaming firm IGT says social casino and real-money online casino brands have similar player demographics:

Players aged 30+ predominate (75% of social and 82% of real-money)

According to SciGames, player stickiness with social product is high and averages 2 years

Average monetization rates for land-based social casinos is 13% according to SciGames Play4Fun

Can you take us through the steps that a casino can take to begin the process of moving online with a social casino product?

Let’s assume that a land-based casino has only a web presence (retail website, social media)

1. How to go online – what technology option best achieves the goal

2. What does the infrastructure integration look like?

3. What content do I choose – what are my customers going to want o play? (social casino games, etc.)

4. What is the internal management of the product to look like?

5. Marketing, including use of online and offline channels

Given your company’s focus on marketing, can you provide more detail on marketing a social casino brand?

The first question to ask: what is the goal?

• Increase property revenue

• Increase customer base

• Increase market share

Goal: engage current database

• Engaging and Existing with existing customer database

• Leveraging the resources a casino already has, and implementing content related to social into current strategies – email marketing, social media, etc.

Goal: increasing geographical reach of brand

• Marketing/ acquisition beyond existing database – SEO, PPC (Google ads), performance marketing (use of social networks), paid social media ads, offline channels (TV, print, radio, local billboards, etc.)

What can land-based casinos expect to achieve in the first stage of marketing their social product?

Keeping your ideal player in mind when strategizing engagement

• Identifying your ideal player, and concentrating on these types of players

Expansion of current marketing activities

• Email marketing: Sustained email marketing campaign to the customer database that promotes the social brand (both the desktop version and the mobile app)

• Social media: Focusing primarily on Facebook and Twitter, as they are considered the most impactful social channels for B2C marketing, according to research from the Social Media Examiner

Testing your marketing strategies

• Using efficient tracking technology to ensure you are maximizing conversion of existing customers into social players

Findings – Scientific Games

• 20+ mobile concierge player downloads

• 4.25+ sessions per daily user

• Players using social products increase in-casino spend

What about the secondary phase of marketing? What can land-based casinos expect to achieve then?

Again, come back to the goal. Here are two examples:

1. Increase profitability

• Targeting current customers that are digitally exposed

2. Increase customer database

• Players that are outside geographical boundaries will be digitally exposed, and seek to spend leisure dollars on activities such as a digital social casino

NOTE: ensure transparency of your marketing efforts and investments to understand what is most effective

• Track online, offline, and mobile channels

• Implement ad serving tools for targeted digital acquisition

• Google analytics/AdWords

Constant re-evaluation of channels and marketing campaigns

What have you seen are some advantages that land-based casinos have related to marketing?

Land-based casinos are really well-positioned to market a digital product:

• Pre-existing marketing budget

• Already existing relationships with customers

• Brand value

• Customer database – segmented

• Player rewards programs

THANKS FOR ATTENDING!For more Information, please feel free to email Nicky at nicky@incomeaccess.com

Thank you to Rory Shanahan from Scientific Games for sharing your insights. To contact Rory: rory.shanahan@scientificgames.com