Social Casinos: How the House Wins

Players can’t cash in at social casinos. But gaming operators can and do.

I n 2012, when New Jersey lawmakers OK’d real-money internet gaming, many thought it was the first ripple in a wave that would sweep the nation and kick off a giant interstate industry.

Some operators launched free-play internet platforms while they waited for the real thing.

They’re still waiting. In 2018, only three states—Jersey, Delaware and Nevada—offer real-money online games. But social casinos continue to grow.

The digital platforms do triple duty: as branded entertainment hubs, marketing channels, and data-capture tools. Ideally, they lure more players on property.

And sometimes, they even make a little money.

Adam Krejcik, principal of Eilers & Krejcik Gaming, says many thought the social casino phenomenon “would not survive as a genre” when real-money gaming stalled.

“They thought, who in his right mind would spend real money for virtual coins that can’t be withdrawn?

Well, the numbers and the growth of the industry have disproven that thesis.”

While social platforms associated with land-based operations occupy a tiny corner of the $4.5 billion worldwide social games market, there really is a payoff—for casinos and for players.

“Such a solution is not necessarily driven by P&L,” says Krejcik.

“It’s more focused on helping to drive land-based play.

That’s harder to quantify in terms of impact, but the evidence and research we’ve collected points to it being a complementary service and solution that makes a lot of sense for casinos.”

It’s been a big win for Foxwoods Resort Casino, according to Seth Young, director of online gaming for the tribal enterprise. Young gives FoxwoodsOnline “an A-plus ranking.”

“Roughly 92 percent of new FoxwoodsOnline players aren’t known to the Foxwoods Rewards Program,” which suggests that the social casino is tapping into a whole new customer base, Young says.

Allowing online players to earn on-site rewards has led to a “quantifiable increase in both frequency of visitation and spend at the physical property” among those guests.

It’s also “a great asset for new-customer prospecting.”

Facetime = Foot Traffic When the value of social casinos was in question, gaming manufacturers recognized the opportunity,

says Dana Takrudtong, executive in charge of digital transformation at GAN.

“They watched the rapid development of social casinos on Facebook and mobile apps, and the meteoric rise of revenues.

“The vendors who produced content said, ‘We have these historic libraries and these incredibly valuable games.

Why don’t we bring take this IP to our casino partners so they can participate in the marketplace as well?’”

She calls social casino “a phenomenal tool” that extends the house to the digital space, 24/7/365.

“Players can be home watching Netflix and shopping on Amazon while playing a social game, and the casino still has the player’s share of wallet, share of mind and share of time.”

“This goes beyond simply providing casino-style games in mobile apps,” says Luisa Woods, vice president of marketing, gaming and entertainment at Delaware North,

who previously led the online divisions of Tropicana Atlantic City and Caesars Interactive.

“These games are integrated into a deeper relationship with the customer.

Casinos can provide features, services and benefits in new ways and get more face time with their customers.”

Ideally, “that open communication channel” will tempt online patrons to become on-site players.

“Casinos have hotel rooms to fill, slot machines to be occupied, restaurants they want people to frequent,” say Woods, whose company acquired social casino developer Ruby Seven Studios in 2016.

Social casinos, as much as direct mail and other types of outreach, can help make that happen.

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