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05/04/20 - The land-based Gambling Operators must engage an omnichannel strategy

Author: Eduardo Morales Hermo                                                                                                                           

March 24, 2020 

 

With the Covid19 pandemic, a paradox is occurring that a few months ago very few imagined, the closure of land-based gaming establishments has caused that the only way to gamble is through digital channels, the internet and/or mobile.

 

This is not something that has affected small casino, bingo or gambling companies, but also large global gaming groups which are present in large gaming hubs such as Macao or Las Vegas, extending to all markets, of the different countries across all the continents where containment measures have been implemented with the closure of all services and retail commerce that are not essential for the survival, health and safety of people, in addition to forcing them to be held in their homes "until new notice".

 

As a consequence the vast majority of operators of land-based gaming establishments who do not have or have not considered their gaming offer thru the online channel strategic, they have become invisible to their customers, many of whom have had to choose to access the online gaming offer through the different operators, whether international or local in each country.

 

It is possible, at least as it should be, that this pandemic disaster makes land-based gaming operators reconsider the need to develop into an omnichannel strategy; those located in jurisdictions where online gambling is regulated and allowed, should consider it a must to incorporate the gaming offer through digital channels, and not only by opening a website and waiting for the fish to come, but also by carrying out an active development and promotion strategy for its digital offer combined with its land-based offer: a well-designed and well-developed omnichannel offer.

 

It is evident that the dimension or the size matters, for that reason it would be necessary to take into account if it is worth it to those smaller or individual companies, but even for these, there are options that can allow them to capitalize their land-based business on digital channels by reaching an agreement with third-party online operators.

 

On the other hand, many large groups of casinos and land-based gambling in jurisdictions where online gambling is not allowed, for example, the United States and Asian markets; to give relevant examples, cannot launch an online supply channel either.

 

It is also to be hoped that this situation created by the Covid19 pandemic will make the US land-based gaming industry to start pushing, and much more, to policymakers at the federal level, to replace the Wire Act of 2006 that prevents online gambling transactions in North American territory legally and promote an initiative that implements the regulation of online gambling more sooner rather than later, because in the meantime it is impossible to prevent Americans from playing online with the different operators that seek ways to offer online gambling and betting with impunity, without control, without guarantees for consumers and evading the fiscal and compliance commitments that it establishes a regulation.

 

The recent opening of the sports betting nationwide in the U.S. is allowing the land-based gaming operators to discover the additional revenues that can be obtained from a different and new customer base, and especially in those states where a mobile channel is allowed, they can see by themselves how 70% of the revenues come thru that channel.

 

There are few but some experiences in New Jersey and Delaware with online gaming already, but it is a must that a federal or state by state online gaming regulation is put in place. It can only add under an omnichannel strategy for all parties.

 

Something similar could be said about the Asia Pacific region in those territories where regulated online gambling is non-existent, and the unregulated offshore offer is in its own right.

 

In general, countries that do not put in place a regulation for gambling and online gambling are simply benefiting the unregulated offer, offshore or illegal, no matter what it is called.

 

The old Spanish saying “that you cannot put doors to the fields” is very appropriate, because in addition in some cases when regulation is implemented and they do so with limitations that take demand to the unregulated market, where the problematic game is not controlled, nor are there effective methods to prevent minors from playing, and players have no guarantees and are at the mercy of the invisible operator.

 

The regulation must be balanced, complete and that allows proposing a product offer and playing conditions for a sustainable business and with tools to carry out responsible gaming policies, preventing access to minors and vulnerable people, with compliance rules that allow and oblige to carry out a leisure and entertainment activity with all the guarantees for consumers and socially and economically transparent.

 

We know that the proportion of contribution that online gaming has to the total of global gaming does not go beyond 15% of its gross gaming or GGR income at this very pick times, but it is important for land-based operators to its income from its core or core business, which is the land-based premises, and we all know the strategies of land-based companies that have incorporated the digital channel as a fundamental division, how they have grown and capitalized on their position as land-based premises to feed their online business and vice versa, it is also not necessary to mention the multiple positive experiences that must be an example to be followed by all those who have the dimensions, capacity and can do it.

 

Naturally, it is not something that should be done without the necessary study and analysis of each case, to adapt the development to the company, market and regulated jurisdiction where it is carried out, and it should be borne in mind that online gambling is not another area of gaming for your land-based business, it is a different business model and requires configuration specific strategy and business model that guarantees its viability.

 

In the online gaming business, there are several “leagues or levels” in which you can participate, and each one must be aware in which they can and should participate so that the structure and investment are adapted to the possibilities that each business has.

 

It must necessarily be done with the contribution of people with experience and knowledge of the operation and marketing of online gaming, and it is not worth transferring people from land-based gaming areas simply because it is a product equivalent to the land-based offered through the internet or mobile technology, is more than that, the strategy of starting an online gambling business goes much further and must take into account each and every one of the aspects that influence whether a sustainable business can be put in place, otherwise will just struggle and be a waste.

 

It seems to me, with all my respects, serious neglect of management functions in a land-based gaming company that has the characteristics to do it, not contemplate, plan or execute a strategy to capitalize its establishments and land-based customers by completing its gaming offer through digital channels for an omnichannel model.

 

And it is not worth just obtaining a license and launching a website simply to vegetate, with the consequent operating expenses, without any return, just throwing money away.

 

I am sure that many land-based operators already have their complete multi-channel offer, and others are in the process, but those who are missing it or are undecided or do not believe in the model, I encourage them to analyse it pragmatically and if you understand that could and should be on the market, do it sooner rather than later.

 

Online gambling through digital channels is an attractive option and more and more consumers are opting for the option to play online through different access devices, and they can do so while also being consumers of gaming in land-based establishments, doing so only in the digital channel, or becoming a valuable omnichannel customer.

 

Today's consumers, where age is not a limiting element in general, is always "connected" and accessible in a terminal that is always with him, "his mobile” and must be a primary and priority objective for land-based gaming operators of land-based in order to establish a universal offer.

 

Online gaming and betting growth may seem slow in relation to land-based gaming, but it is constant and by no means cannibalizes or substitutes land-based gaming, which has and will always have its appeal due to its characteristics of personal and direct participation, the social aspect of the environment, as well as the leisure and entertainment accessories that complete the offer of many gaming establishments, especially casinos and bingo halls.

 

Land-based gaming operators with dimension and capacity for this must inescapably include the online gaming offer in their objective of reaching a greater universe of consumers and having them contribute greater value to their “brand”, making them customers omnichannel, which more than doubles its value in terms of revenue per customer and favours the loyalty of these to a single brand in the two channels.

 

And time is money to start it, a very relevant aspect in a market that is already full of competitors, but the land-based position factor is a great advantage if done under the right strategy, so the sooner they start the sooner they can have participative in whatever market they approach.

 

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