One of the biggest struggles in the business world is between long- and short-term thinkers. Usually, quarterly results win out. Surprisingly, the industry many believe is all about immediate gratification — the US online casino vertical — appears to be filled with online gambling operators who are thinking about customer lifetime value (LTV).
Evidence of this showed up in another unexpected place. It’s part of the research shared with Bonus.com yesterday by iDEA Growth (development and Economic Association). The nonprofit trade organization that represents the online gambling industry passed along the news to Bonus.com from the Indiana Gaming Commission (IGC).
IGC and Horsham, Penn.-based Spectrum Gaming Group just released a 103-page report titled Market and Policy Analysis: Prospective Internet Casino Gaming in Indiana.
Indiana is the next jurisdiction US online casino advocates like iDEA Growth think will legalize iGaming soon. To that end, its gaming commission published a study about how such a market might look.
At the moment, the following states allow legal online casino gambling:
- Nevada (only online poker)
- New Jersey
- West Virginia
The research used data from those markets to evaluate Indiana’s prospects.
Within that evaluation, Bonus.com learned that the relatively nascent US online casino market is hoping to live a long life.
Targeting Gen Z US Online Casino Gamblers
Whether it’s due to shareholder pressure or CEO expectations, many organizations fall into the quarterly results trap.
As a result, it’s harder to push for marketing programs rather than campaigns. It’s also difficult to justify targeting a less profitable demographic for customer acquisition simply because doing so will pay off in the long term.
Yet that’s exactly what online gambling operators are doing, according to the IGC research.
What US online casino operators may have going in their favor is many of them are private or are part of such large organizations, shareholders may not be able to micromanage them.
For instance, the No. 1 operator in US online casino circles is a joint venture between two giant companies. BetMGM is half-owned by MGM Resorts International and Entain.
The top US online sportsbook operator, FanDuel, is primarily owned by the behemoth online gambling business Flutter Entertainment.
Still, it did seem to take a little bit of convincing to talk operators into investing in Gen Z. A little more than a year ago, online gambling industry thought leaders were advising operators to target Gen Z for customer acquisition.
They said some operators were still behaving like retail casino marketers.
According to a National Council on Problem Gambling (NCPG) study released in March 2021, online gamblers were 34, on average. Retail casino guests tended to be 44.
Seeking US Online Casino Player LTV
Lately, according to the new research from IGC:
The age difference between igaming players and traditional casino players is central to the appeal of igaming by retail casino operators. The traditional casino industry has long searched for an effective means of attracting a younger demographic. The retail industry’s core players – particularly slot players – continue to age, and are not being replaced by younger players. As igaming offers a broader demographic reach, it would help address that demographic challenge.
So now, US online casino operators want Gen Z gamblers.
For reference, the Pew Research Center says the oldest member of Gen Z is 26 and the youngest is 11. That means some members of Gen Z have already been playing online casino games for five years.
That’s even though the IGC study finds one operator’s “youngest age group accounts for nearly half of the players but only slightly more than a quarter of revenue.”
More specifically for that operator, 47.1% of its iGaming players are aged 21 to 39, bringing in 28.7% of its gross gaming revenue (GGR).
The research opines:
This makes sense, given that they are likely to have less disposable income.
Its most profitable gamblers are 40 to 54 years old. That demographic generates 44% of its GGR. Only 18.4% of the players are 55 and older, causing 27.4% of the GGR.
The IGC study continues:
• Another national igaming operator found that igaming players are younger than traditional casino players but older than digital sports bettors.
• Igaming and digital sports betting together create revenue synergies. Two national digital gaming operators reported that players who participate in both igaming and sports betting spend significantly more than players who participate in only sports betting or only igaming.
Women Play US Online Casino Games
Speaking of operators targeting LTV rather than immediate profit, marketing US online casino to women may fall into that category.
The IGC study shows a “national igaming operator reported from its database of more than 100,000 igaming customers” that “more than half of the players are women, but they account for less than half of the revenue.”
The IGC study repeats that GGR assertion twice, but may have missed an important typo in its chart that lists gender, percent of players, and percent of GGR:
- M: 53.6% of players, 42.7% of GGR
- F: 43.2% of players, 51.1% of GGR
- Other: 3.2% of players, 6.2% of GGR
However, the generalization that most US online casino gamblers are women does seem to hold true across operators.
The IGC report quotes a February 2021 prospectus online gambling operator Rush Street Interactive (RSI) filed with the US Securities and Exchange Commission (SEC):
Unlike sports wagering, which predominately appeals to males, casino wagering appeals roughly equally to both males and females. In Q3 2020, approximately 90% of our monthly unique online sports wagering only players were male. For Q3 2020, approximately 55% of our monthly unique online casino wagering only players were female.
Conversely, Golden Nugget Online Gaming (GNOG) told researchers that 45% of its iGaming players are women, 55% are men, and all of them are 40 to 45 years old.
In July, FanDuel Publicity Director Kevin Hennessy told Bonus.com that half of FanDuel Casino players were women.
Adding Women Gamblers to FanDuel Casino
Hennessy told Bonus.com that nationally, half of FanDuel Casino’s bettors are women.
However, in Pennsylvania, women were in the majority for a long enough period of time that the app’s most popular game “almost flipped” from blackjack to slots, he said.
Because FanDuel Casino wants more women among its player ranks, FanDuel announced in July that it hired New York-based ad agency Mischief @ No Fixed Address.
FanDuel expected Mischief’s subsequent marketing campaign to continue to broaden its FanDuel Casino audience, as well as cross-sell online sports betting to diversify that predominantly male group of bettors.
FanDuel’s US online casino and sports betting apps are responsible for most of Flutter’s 2.2 million monthly users of its US brands. FOXBet, TVG, PokerStars, and Stardust round out that list.
Before the FanDuel Casino marketing campaign began, Hennessy and Jacob Claesson, head of North American operations for Evolution, led Bonus.com on a tour of Evolution’s Philadelphia live dealer studio facility.
On July 18, FanDuel launched its branded live dealer studios in Michigan and Pennsylvania.
On Aug. 4, I received my first FanDuel Casino postcard at my Philadelphia home. Matching Hennessy’s words, it advertised FanDuel Casino’s branded live dealer studio.
Unlike my experience during the Evolution studio tour, the postcard’s ad shows a white man dealing blackjack. During my visit to the branded studio, the dealers looked more like what FanDuel Casino is trying to attract. About half of the dealers were women, and most croupiers were Black.
On Aug. 19, I received the second piece of direct mail, pictured here.
On Sept. 17, the postcard advertised the FanDuel Casino Reward Machine.
I also see the FanDuel Casino ads on television.
So while I’m not a member of Gen Z, I can personally confirm a US online casino operator is pursuing women, as a demographic, over the long term.