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iGaming Landbased Operators Survey
2013
The Survey
• Goals:• Where are landbased operators in process of implementing
iGaming• What are the expectations on revenue impacts:
• Landbased revenues• iGaming revenues
• What resources are they assigning to iGaming• What are issues with provider solutions
• Was conducted in January and February of 2013• Sent to all US landbased operators• Received 61 completed responses (108 overall)
Respondents Level of Involvement
67.8% of respondents either lead the process or were very involved
Type of Respondent Company
73% of respondents were Native American operators
Number of Properties OperatedOn average respondents operated 1.9 properties
Type of Respondent Company
74% operated between 1,000 and 7,499 gaming positions
Status of IGaming67.9% either formally or informally investigating iGaming,
10.7% initiated provider selection process, 10.7% already selected provider,
and 7.1% have already implemented, only 1.8% have decided not to pursue
Status of IGaming
Other Observations:
Greater proportion of Commercial casinos have already implemented iGaming compared to Native American casinos
Native American casino catching up as greater proportion have initiated formal research, initiated provider selection process, or have already selected provider
Motivation for Implementing iGaming63% cite need to stay competitive, 59.3% to support landbased rev. and marketing,
53.7% motivated by new online revenue, 35.2% as extension of online presence
Form of iGaming85.4% preparing for real money gaming, 75% focusing on social gaming,
66.7% focusing on free play
iGaming Staffing and Salary Expectations71.4% planning to add new staff dedicated to iGaming
ranging from 2 to 30, with total salaries from $60,000 to $750,000 plus.Average 5.9 FTE’s with total salary of $306,429
Native American casinos more likely to add staff compared to Commercial casinos
Cost ExpectationAverage start up costs=$2,4 million
Average annual operating costs = $567,586
In House Functions
• Bonus and Loyalty programs•VIP account management•Customer Service
Also looking to have control inthat they are retaining functionssuch as:
•Hosting•Selection of Games•Analytics
Landbased operators are keeping in house functions that touch thecustomer such as:
Out Source Functions
• Payment and Fraud Protection• Geo-Location & Age
Verification• SEO/Site Optimization• Web site maintenance• Affiliate management• Hosting • Network chat maintenance
Landbased operators are outsourcing:
Out Source / In House
Integration with Landbased Rewards/Loyalty Program48.9% reported no or minimal integration with landbased rewards/loyalty program
42.8% are integrated or highly integrated with rewards/loyalty program17.6% of future marketing budgets to be aimed at iGaming
Integration with Landbased Rewards/Loyalty Program
Other observations:
Commercial casino more focused than Native American on integration with landbased rewards/loyalty program
Native American casino likely to devote more of their marketing budget to iGaming
Larger casino expect to devote greater proportion of their marketing budget to iGaming than smaller ones
Current Social Media Participation
Current Level of Commitment to Social Media
Perceived Threat from State Lottery46.1% see State Lottery as a significant or severe threat in online gaming
Legislative Expectations63.6% expect State by State legislation, 34.5% expect mixture of State and National
Only 1.8% expect Federal legislation alone,Everyone expects some legislative action
Desired Legislative Framework41.5% want Federal legislation, 26.4% want State by State legislation,
30.2% want a mixture of Federal and state legislation56.6% want State legislation with or without Federal legislation
Surprising given predominance of Native American casinos in sample who would benefit more from State legislation
Impact on Landbased Revenues39.6% see no or minor impacts on landbased revenues, 21.6% see a significant or
very significant impact while 37.7% see a moderate impact
iGaming Revenues 73.6% of respondents see iGaming revenues as minor to moderate
in comparison to landbased revenues
iGaming and Landbased Revenues
Other Observations:
Commercial operators foresee a smaller impact on landbased revenues from iGaming than do Native American operators
Both Commercial and Native American operators foresee minor to moderate iGaming revenues with respect to landbased revenues.
Partnering with other casino for online point redemption
Moderate level of interest
Partnering with nontraditional companies such as Expedia, American Express or airlines for the redemption of points won online?
Moderate level of interest but higher than for other casino companies
Top Three Reasons you decided to pursue iGaming?
40% Future Competitive Positioning30% Marketing/Branding/Younger Audience27% Revenue Enhancement
Major Concerns voiced internally within your organization as it relates to online gaming?
24% Regulation/Compact/Legality Concerns
19% Cannibalization / Profitability / ROI
13% Cost of System and Developing Capabilities
10% Integration with Landbased
Main Concerns with the software solutions that have been presented to you?
30% Data Protection/Reliability/Stability/Security14% Cost11% Integration7% Regulation/Compact/Legality Concerns5% Flexibility/Open Architecture
In terms of factors, processes, and/or software functions, what are the three most important technology advances that you would like to see providers integrate into their offerings?
19% Integration/Compatibility/Mobile Functionality
13% Flexibility/Variety/More Games/Mobile apps
13% Player Identification/Verification/Security
10% Data and payment processing4% Cost
Major problems/concerns you have encountered in developing iGaming
37% Regulation/Compact/Legality Concerns
10% Lack of Clear Information/Confusion/Road to monetization/Lack of knowledge
10% Finding a trustworthy and credible Partner
7% Cost6% Integration/Compatibility
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