Omni-Channel (and Online Casino) Gaming

I was recently asked to speak on a panel during the Digital Play Summit at the Indian Gaming Association Tradeshow and Convention on the topic of Omni-Channel gaming (offering online casino games in addition to bricks and mortar), and how shifting consumer behaviors are reshaping gaming. Interesting and timely topic (check), highly successful and impressive professionals on the panel with me (check), conference held in a great locale (check) – so of course I said “yes”. I don’t think I’m exaggerating when I say we had a great time, and I believe the audience gained some valuable takeaways.

The premise of the panel: The next generation of gamblers isn’t waiting – they’ve already gone mobile. As consumer behaviors shift toward digital-first experiences, tribal gaming must evolve.

The experts: Bill Anderson, Business Development Executive – SportRadar, Jai Maw, Co-Founder & President – Betting Hero, Dominic Ortiz, CEO – Potawatomi Casinos & Hotels, Suzanne Leckert, Co-Founder – Convergence Strategy Group, moderated by Joe Kustelski, Chalkline.

Key Take-Aways

As the panelists touted the necessity for bricks and mortar casinos to consider their online plans and supplementing their physical product with an online presence, the moderator posed the following question to me: What is the potential size of the omni-channel opportunity, what could it mean for revenues to a Tribe, and what are your thoughts on the potential cannibalization of bricks and mortar casinos? My answers:

• The revenues that could be generated will vary greatly by tribe and by their particular deal and circumstances.  On a per-capita basis, we’re seeing online sports betting generating $60-80 per capita in states where it’s legal, versus $120-160 for online casinos.  But that gets split up between all of the operators in the market.  On an individual tribe’s basis, the online gaming opportunity could add $400 million in GGR, such as with the Bay Mills Tribe of Michigan, or it could add $11 million as with Hannahville Indian Community.  But keep in mind that the devil is in the details of the deals that these Tribes entered into – they aren’t keeping all of that GGR.  Some partnership deals give Tribes around 10% of Net Gaming Revenues (after promotions). 
• Cannibalization of bricks and mortar – we aren’t seeing that as huge in any market – around 1% to 3% in markets where online is fully legal and competing with bricks and mortar. 
• Customers are already online. They are playing sweepstakes games. They are playing on illegal offshore sites. They want to be online.  If you don’t offer an online product, how much are you missing out on?  And will your bricks and mortar revenues start to decline?  I think so.  We just don’t have the data yet to quantify that.  
• Importantly, you have to know your customer.  We regularly analyze mobile phone tracking data, and we’re able to see just who visits casinos and a ton of data about those people.  We’re able to see data on not just registered players, but everyone. Prior to this panel, I pulled data on two tribal casinos in differing markets – Sycuan in California and Harrah’s Cherokee in North Carolina. In comparing the visits to of these two properties, they have very different customer bases.  For Sycuan, for instance, the top three segments that visit the casino are pretty tech savvy groups- they love online shopping.  For Cherokee in North Carolina, yes, their top group is pretty tech savvy, but their number 2 and 3 segments are not and are not likely to play games online.  But, their 5th, 6th, and 8th largest groups would likely play online.  And these folks can certainly help grow the pie.  The point here is that each property is different, so the ramp-up may be different, and the expectations should be different.  

This is just a snippet of the day’s conversation – a conversation that I not only contributed to, but I learned from immensely. This conversation will certainly continue as the online space evolves, as first movers venture out, stumble, learn from their mistakes, and ultimately succeed. We’re there for it all.

Suzanne P. Leckert, AICP