Online Gambling Insiders Talk Retention, Despite Customer Acquisition-Mode Market

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Maybe it’s wishful thinking in such a competitive online casino startup marketplace, but North American online gambling insiders are loving the word “retention” lately.

That’s such a sober term for a market drunk on customer acquisition marketing spending.

In January, it seemed like only BetMGM CEO Adam Greenblatt was urging online casino operators to rein in their promotional spending. DraftKings CEO Jason Robins appeared to ignore that advice completely.

At that time, many operators who could’ve used their loyalty program databases to retain online gamblers with experiential marketing were instead using those customer databases to cross-promote their other online gambling products. Or they were spending millions on brand awareness and customer acquisition campaigns.

Most of the time, though, online gambling operators were doing both. For the most part, they still are.

However, fast forward to July 13 at SBC Summit North America 2022, and retention was on the minds of most of the iGaming Americas track speakers and attendees at the New Jersey conference.

Online Gambling Insiders’ Aspiration: Retention

Perhaps the Meadowlands Exposition Center’s inhabitants were speaking more aspirationally than concretely. Perhaps their heads were in the clouds. Nevertheless, their words did seem to provide a glimpse into online gambling’s future.

Bettors stay engaged with the best user experiences, said Anika Howard, CEO and president of Wondr Nation. So operators need to design experiences gamblers want, said the head of the Mashantucket, CT-based iGaming arm of the Mashantucket Pequot Tribal Nation.

If online gambling operators don’t provide bettors with the experiences they want, those gamblers will do things like bet using illegal offshore operators, said Luisa Woods. She’s the vice president of marketing and gaming at Buffalo, NY-based Delaware North.

“They find a way,” Woods said.

Her company is known in the online gambling world for Betly Sportsbook in Arkansas and West Virginia.

Howard’s company is owned by the tribe that runs Foxwoods Resort Casino in Connecticut, which partners with DraftKings Casino.

His company is putting that theory into action, offering a great user experience (UX), said PointsBet Canada CEO Scott Vanderwel. He said if players try PointsBet, they stay.

However, the online gambling operator first must acquire those customers. In Ontario, the regulatory environment makes onboarding bettors “a hurdle.”

“The effort and energy to get someone” is higher than it is in the US, Vanderwel said.

Retaining Online Casino Gamblers Matters

Online casino gamblers are more profitable for operators than sports bettors, said Andrew Foster, Malta-based Enteractive‘s chief business officer.

While that information comes from an iGaming customer retention and reactivation software and services provider, a Bonus.com reporter found the same truth.

In a May 2021 study published by Online Poker Report, she reported that online casinos in the full-service online gambling states of Michigan, New Jersey, Pennsylvania, and West Virginia accounted for 70% of the gross gaming revenue. Connecticut didn’t launch its legal online casino and sports betting marketplace until Oct. 19, 2021.

In the meantime, some online gambling operators prioritize getting as many warm bodies on their apps as possible.

They may be disregarding long-term profitability, Woods said. She said those operators may even be gaining bettors who will never be profitable.

Agreeing, Howard said customer lifetime value and loyalty are essential for profitability. It’s important how operators find players, she added.

Bonus promotions operators are advertising to acquire online gamblers are “not sustainable long-term,” said Rob Picard, vice president of business development for Chicago-based Rush Street Interactive (RSI). RSI is known for BetRivers.

UX will drive long-term revenue, he said.

Foster wrote a longer version of RSI’s opinion for SBC Americas before staffing a Meadowlands vendor booth.

He said:

In a recent call with investors the medium-sized operator Rush Street Interactive explained how quality products, strong user experience features and customer service helped it retain players and avoid major marketing expenses.

The group’s CEO Richard Schwartz said: “From day one we have said product development will be the winner in this industry. Short-term marketing will result in some market share, but players are fickle and in the long term they decide on who they play with according to which products they prefer. If you treat players well and have strong products you can grow.”

Online Casino’s Retention Powers

Vanderwel said online casino works well to retain online sportsbook bettors during the category’s slow summer months. Because his app is a “sports-led” brand, it’s been easier to acquire sports bettors, then ask them to try online casino gambling. Between 20% and 30% of sports bettors gamble on the casino platform, he said.

Eventually, Vanderwel said, he expects that PointsBet Canada’s customer breakdown in Ontario will be 60% casino and 40% sports.

Howard concurred:

Sports betting customers translate really well into iCasino players.

Vanderwel added that customer acquisition cost (CAC) is also less expensive for online sports bettors vs. online casino gamblers, he said.

Indeed, OPR reported in May 2022 on Jersey City, NJ-based BetMGM‘s plans for an overall CAC of $250 per player. Greenblatt told analysts that cost will be broken down as follows:

  • $160 for online casino players
  • $90 for online sports bettors

BetMGM regularly reports its CAC, but most US online gambling operators don’t reveal the number. Perhaps that’s because it’s usually higher than BetMGM’s. New York-headquartered FanDuel, for instance, revealed its $290 CAC in May 2022.

What Goes Into UX?

One aspect of gambling remains the same as it was 120 years ago, when Charles Fey invented and began mass-producing slot machines that automatically paid out coins.

That aspect is the thrill of the game, said Daniel Sahl.

In that respect, gambling’s always been about UX, said the director of the Center for Gaming Innovation at the University of Nevada, Las Vegas.

Good game design creates this story for bettors, Sahl told Bonus.com on July 13:

  • anticipation
  • placing the wager
  • the result

Sahl, who teaches game design at UNLV, explained to Bonus.com:

That journey produces the entertainment value that makes [casino games] unique. … The delivery [mobile vs. retail] changes it. But the game’s impact, that translates across all games.

Even if a slot game is boring or a blackjack player needs to double down on sevens, gambling is always exciting, he said.

As for the wrapping paper, others at SBC had ideas.

Woods said today’s competitive online gambling market means only operators who meet online gamblers’ needs will succeed.

This marketplace will be customer-driven, so operators should be customer-focused, she said.

That means online gambling operators should know bettors stay on an app because of the UX, customer service, and personalization, said Delasport CEO Oren Cohen Shwartz. The Gibraltar-based company is an iGaming software provider.

Localizing offers and personalizing marketing is a “critical” brand differentiator, said Rob Lekites. The vice president of North American sportsbook sales and operations works for Las Vegas-headquartered iGaming software provider GAN Sports.

In the end, the “Gold Rush” of online gambling operators will notice “the natural rules” of the market prevail, said Spin Games CEO Kent Young.

“I think it’ll just be a matter of time,” said the leader at the Reno, NV-based iGaming content and software provider.

About the Author

Heather Fletcher

Heather Fletcher is the lead writer at Bonus, concentrating on online casino coverage. She had her first published byline at age 10, but didn't get paid for her writing until she got her first newspaper job. Fletcher's newspaper career started at Suburban News Publications in Ohio and eventually took her to The New York Times, where she's still a contract freelance reporter for the National Desk. She covers breaking news from Philadelphia, as needed. In March 2021, Fletcher began writing about online casino gambling as the lead writer for Online Poker Report.

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