During the Keynote speech at G2E Las Vegas this week, Bally’s Chairman Soo Kim and Penn Entertainment’s CEO and President Jay Snowden discussed the importance of developing a successful omnichannel strategy.
For Snowden, developing an effective omnichannel strategy is as important to the gambling industry as any other. He said: “If you don’t have an omnichannel approach, or aren't at least thinking about your digital business, you’re probably going extinct.
“Look at what Amazon did to Walmart and Target – those retail providing companies had their heads in the sand for some time as they didn’t think Amazon was going to work.”
The same rules apply to the gambling industry, according to Snowden. He explained: “When PASPA was overturned in 2018 and sports betting became legal, we viewed this as a good opportunity for our industry to go digital.
“For a long time, we asked questions about our aging audiences in our land-based businesses. So the question was: how are we going to get younger? Online mobile products engage younger audiences.”
Snowden's view is that digitalising the gambling industry was crucial for its relevance and survival, let alone to stay in lock-step with other industries.
For Bally’s Chairman Soo Kim, moving from a predominantly land-based business to an online one required a simple psychological shift.
He said: “The way we look at it, it’s not online gaming, it’s not land-based gaming, it’s just gaming. When you look at it that way, gaming can be seen more universally. Gaming is something you can do anywhere; it doesn’t have to be constrained to a certain vertical. You can call it omnichannel, but for us, it’s, 'why not expand the pie?'”
Shifting a business model to an omnichannel approach can have its downsides, as the means to integrate customers both on and off-line becomes more seamless, and marketing to audiences increases. This creates a danger of overreaching the parameters of what constitutes responsible gambling (RG).
Gambling responsibly is something Snowden says should always be at the forefront of an operator’s thinking.
He said: “We have to approach how we market our omnichannel services responsibly. There are a lot of issues that have come to light In European markets over the last decade. So if we don’t self-regulate as an industry, we’ll end up getting regulated in ways that none of us will get too excited about.
“I do get concerned sometimes that advertising is becoming a bit much. When I’m watching football with my 13-year-old son and he’s asking me what bets we should place after seeing an ad, this is something you have to be particularly mindful of.”
Kim was equally aware of the lessons US operators need to heed from mistakes in the European markets, with some European operators having decades worth of experience in regulated areas.
“Some places in Europe have had online gaming regulated for two decades. So they’re further along than the US is when it comes to RG. The RG there is more advanced with greater tools and technology in place,” said Kim.
“I think the US will need to get to this stage, and that there will be a backlash in terms of maybe overloading the consumer. It’s all about getting the balance right and using technology to better understand consumer behaviour.
“RG has to be core to our business and you must build in the right responsibility features.”
For Snowden, RG is crucial to ensuring a business remains sustainable – claiming accusations of “lip servicing” RG to stave off any regulatory nose-poking are false.
He claimed: “Penn has been in the gaming industry for a long time from a brick-and-mortar perspective. We learned long ago we don’t want irresponsible gamblers in our ecosystem. Problem gambling doesn’t move the needle from a cash flow perspective.
“So we constantly seek out these problem gamers. That will never change just because operators are moving online, the principal remains the same.”
In fact, creating an omnichannel experience can actually lessen the marketing intensity a consumer is subjected to, according to Kim.
He finished: “If you only operate mobile gaming, a person’s product is what you say it is. Therefore, the only way to get people engaged is to load all that advertising in with media and everything else.
“But when you can combine a land-based presence with online and combine it with actual media rights, what you get is a more subtle engagement of gaming with the media, rather than a hit, hit, hit approach where you’re bombarded with ads.
“This way, I think you get a better customer experience while driving RG. An omnichannel gaming company can offer a better-balanced approach to marketing themselves without overstepping the boundaries of responsible gaming.”