Well, this is a first, I agree with something Sheldon Adelson said about online gambling.
On numerous occasions, as he has railed against online gambling, Adelson has expressed his belief that brick & mortar casino gaming is different than online gaming. Adelson believes casino gaming is a part of a larger experience, whereas online gaming is simply about gambling. He has said things like, “If you’re sitting at home playing on a screen, you’re not in the restaurant, or the shopping mall or the showroom spending dollars that simply don’t exist online.”
I have to admit, I agree with this assessment. And considering non-gaming revenue trumps gaming revenue at certain Las Vegas Strip resort-casinos, it’s easy to see why someone like Steve Wynn is not really interested in getting involved in online gambling – based on previous public statements, Wynn is not necessarily opposed to online gambling, he just wants to see the business plan and the profits before he decides to get involved.
While I agree with Adelson that online gambling is lacking non-gaming revenue streams, I of course disagree that the answer is to prohibit online gambling. The fact that online gaming sites are not monetized beyond gaming isn’t a reason to ban iGaming; in fact, I would say it’s a good sign for the industry, as it shows room for growth.
How I would address this issue is to make online gaming experiential. In my opinion, online casinos need to take a similar approach to their brick & mortar counterparts. They need to monetize their players beyond gaming (easier said than done), as this would serve two purposes:
- Generate more revenue and create new revenue streams
- Give losing players something tangible for their money
Longer stays vs. better experiences
To make this happen we need to reward players not with online gaming credits that simply prolong the inevitable, but with real world credits that will resonate with them.
Offering someone money deposited straight into their online account is one way to keep them at your site longer, but what kind of experience are they having with that reward? Most likely a bad one. When their initial stake money is gone, and they have long burned through any deposit bonus and reward dollars they have received, how will they view their time on your site? What will their lasting impression be?
While some people simply want to gamble, for others it’s not just about gambling, they desire an experience beyond gambling. If only offered a pittance of money, these people will be less likely to return to your tables even if they have the disposable income to do so, because they have nothing to show for it.
Allowing players to choose Amazon.com gift cards, or poker chip sets, or restaurant and hotel vouchers over reward dollars may seem like you are pushing them (and their money) away from the online tables, but I think for many people the opposite occurs: I think these types of rewards bring them back to the online tables – with their own money.
After all, it’s their money you are after, not the money you gave them to gamble with as a reward.
This seems crazy to a professional player who looks at it from the point of view of ROI’s +EV. Yes, they lost $1,000 to get a $50 chip set or a $100 restaurant card, but people gladly lose this kind of money for a free buffet and/or the occasional hotel stay at a brick & mortar casino. They are going to gamble anyway, and gambling is not the way they earn a living, so give them an experience to soften their losses.
If I lose $1,000 to a casino over a handful of visits during a six month period, but receive tickets to a show I want to see I’m generally pretty happy. Yes, it sucks losing $1,000, but if I can afford it, and I enjoyed my time gambling, who cares? I probably had at least one winning session (another good experience) and I got free tickets to a show. Sure, those $50 tickets essentially cost me $1,000, but I was going to gamble anyway and now I get to see a show and have a nice dinner (on my own dime) beforehand.
Landry’s Inc. is a great example of this potential synergy
This type of incentivizing is going to take partnerships between online operators and merchants. But, even without partnering up with local restaurants, or Amazon.com, or some other merchants, these possibilities already exist in some places.
Take Landry’s Inc. for instance. The restaurant and hospitality giant owns the Golden Nugget in Atlantic City (which operates GoldenNuggetCasino.com) as well as over 50 restaurants and chains.
So imagine if GoldenNuggetCasino.com offered vouchers to restaurants instead of or alongside reward dollars?
Imagine a husband tells his wife he is going to deposit $300 at an online poker site, and the wife rolls her eyes because her husband is crap at poker, but it’s only $300 of nonessential money, so let him have his fun.
He will likely lose the $300, maybe deposit a couple more times (probably without telling his wife) and lose that money as well over the course of a month. But in the process perhaps he earns enough rewards points for a $100 restaurant voucher to one of Landry’s many upscale steak houses or seafood restaurants, which he uses to take his wife out for a nice dinner.
Yeah, he lost $500, maybe $1,000, but in his wife’s eyes, he was excited about playing, it’s not irreplaceable money, and it kept him occupied over the past month (maybe he spent far less time and money at the bar with his friends), and I got an awesome dinner date out of it.
If the husband wants to keep playing he can, with his own money, and the experience of the dinner softens the blow of the losses for everyone involved. It’s something to laugh about: “How’s your $500 Steak?”
Unfortunately, here is what happens now. In the current system the husband would simply lose the same amount of money (plus the bonus money he received) over the course of maybe two months. He would have nothing to show for it, nothing to offer his wife, and no experience to fondly look back upon. All that happened was he lost money.
Which scenario is:
- the husband going to enjoy more?
- the wife going to be more likely to allow him to redeposit and try again?
As a married man I consider these rhetorical questions.
For most people who gamble recreationally, it’s not about the money lost, or how fast you lost it, it’s about the experience you had with that money. Even if you end up paying what amounts to $1,000 for tickets to a comedy show, if the experience is good it was worth it, and you’ll take the chance and gamble again.
Several times I have gone to a casino with my wife for a dinner and/or a show and lost money gambling. If the dinner and show are good, the gambling losses are just a side note to the story; if I go to the casino and only gamble the losses are THE story.
So while my former self (the professional poker player) would choose the reward dollars; my current self (a recreational gambler) takes the real world rewards 100% of the time.