Casino Execs Expecting More Competitive U.S. iGaming Market

December 3, 2021
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Tribal and smaller regional casino operators will have a better chance in competing in the U.S. online gaming market than in the country’s sports-betting gold rush, according to leading industry executives.

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Tribal and smaller regional casino operators will have a better chance in competing in the U.S. online gaming market than in the country’s sports-betting gold rush, according to leading industry executives.

During a discussion at the SBC Summit North America in New Jersey on Thursday, panelists touted a host of advantages smaller operators have that will benefit them more in online gaming than in a sports-betting market dominated to date by large fantasy sports or casino-resort giants such as FanDuel, DraftKings and BetMGM.

Richard Schwartz, CEO of Rush Street Interactive, pointed out that online casino requires neither the heavy financial commitments of league and media partnerships as in sports betting, nor the liquidity required to offer online poker or daily fantasy games.

“[Online] casino you’ll probably have more competitors longer term because you can be more successful on a smaller basis in casino than you can in a sportsbook given the investment you need to make in a sportsbook to remain competitive,” Schwartz said. “They don’t need large size and scale to offer a better experience.”

That experience, Schwartz said, could include offering integrated promotions at local casinos, as well as immediate cash-outs of online accounts at affiliated land-based properties.

“Local brands have local trust and local databases,” Schwartz said. “Let’s be honest, the land-based casino database is much stronger for online casino than it is for online sportsbook, because a large percentage of population at the casinos have no interest in betting on sports.

“Those are real advantages that a local, land-based property has,” he continued. “Whether it’s a regional commercial casino, or a tribal property, I think as long as you have a good product, online casino is a good opportunity for those properties too.”

Don Ryan, chief operating officer for GAN, added that in many cases, land-based casinos frequently have an advantage built into state-by-state legislation through control of market access.

“If you’re in a small casino that doesn’t have any advantage, it may be tempting to sell it off to the highest bidder on the online side, but certainly the well-established regional operators that have a monster flow of huge business today, they’re very well positioned to build on it,” Ryan said.

Both Schwartz and Adi Dhandhania, chief operating officer of Bally’s Interactive, pointed to Parx Casino just outside Philadelphia as an example of a regional property that has still performed well in online casino with its own branded product. Parx was the highest-grossing land-based casino in Pennsylvania in October, with the fifth highest online market share, trailing only BetMGM, FanDuel, DraftKings and Rush Street Interactive’s BetRivers.

“Whether it’s Parx in Pennsylvania or tribal operators in Michigan, there’s certainly an appetite to expend more on the iCasino side and less on the sportsbook side,” Dhandhania said.

“You’re marketing to your database, you’re marketing to your brand and the ability to add online casino to it, which is a more similar product than sports betting, [that] is giving them enough of a comfort level to say they want to explore that space.”

Schwartz said that one challenge for land-based casino operators is applying a different approach to customer retention in an online setting.

“When they leave the casino, that’s where the opportunities end for the revenue for that brand,” Schwartz said of a traditional casino without an online offering. “Online, you have the opportunity to engage players much more often, so you have to be more sensitive to responsible gaming to slow down the pace of play to sustain the entertainment budget for much longer, years instead of months.

“I think that’s the thing that a lot of the land-based casinos haven’t quite figured out yet how to do with the online space, which is how to slow down a player as opposed to accelerating them.”

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