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IN-DEPTH 2 January 2018
New punters: is it all about the money?
Josh Apiafi, Founder of Rewards4Racing explains why bookmakers should look to offer more non-cash incentives to attract new customers
By Gambling Insider

In such a competitive industry, where bookmakers are competing for every pound of a bettor’s wallet, rewarding people’s interests and passions is key to standing out from the crowd.

Over the past decade we’ve witnessed both the supermarket and bookmaking industry drive their margins down with the mantra: ‘It’s all about the offer’. It has been a fantastic time to be a punter, but I believe that times are changing. The mergers of some of the largest brands in the industry will now return power back to the bookmaker rather than the ‘promotion focused’ consumer. This in turn will assist in driving bookmakers’ margins back to a sustainable level rather than competing on near exchange-level prices.

What we are seeing though, is a shift in the demands and expectations of consumers who are now looking for a more personalised experience rather than just a free bet or cash back offer. A recent report by The Mintel Group found that only 52% of customers opened a new account because of the cash incentive on offer, a serious percentage decline over the last 5 years. However, as the pool of players begins to plateau, bookmakers should increasingly be on the lookout for ways to incentivise new customers and drive customer loyalty. The same report also found that a whopping 81% of either current or potential online gamblers expressed an interest in non-cash incentives: almost half said reward points which you can cash-in for experiences or gift vouchers would be a major factor as to which bookmaker they use or join.

RACING AS A SOCIAL SPORT

As a group, racegoers are a social bunch. In fact a recent survey carried out by the sport showed that the number one reason for people going racing was the social aspect of the event. To these people, what is going to be a more attractive sign-up offer - a free matched bet or the chance to earn reward points on every single one of their bets? Points that are then redeemable to repeat their social day out or even upgrade their experience next time they go racing. It’s a similar trend with airmiles, which sees customers regularly using their points for upgrades into a better class rather than a discount on their usual class of seat.

Last year, some Rewards4Racing members got the chance to go behind-the-scenes at the yard of Grand National winning trainer Oliver Sherwood – a ‘money can’t buy’ experience. This is the type of incentive that leads thousands of new members to sign up in the hope of winning the opportunity. In similar fashion, online casino developer Playstudios partnered with casinos at London’s Hippodrome and Birmingham’s swish new Resorts World venue, to offer prizes such as spa days and free hotel rooms.

The proof is in the pudding! In 2016 almost 60,000 Rewards4Racing members joined one of our three bookmaker partners, Bet365, Coral and Betfred, and began earning reward points on every bet they placed. This resulted in more than 100,000 tickets being purchased to the races with points earned from their betting activity. It was a win-win-win for racecourses, bookmakers and punters alike. In terms of revenue, the three bookmakers combined saw these members stake £1.24bn with them in the last 12 months – and all without a cash incentive to draw them in.

ATTRACTING NEW DEMOGRAPHICS

Whilst cash incentives still have a role to play in the gaming world, the non-cash incentives could open up a whole new world for bookmakers to target. Non-cash incentives also have the advantage of being flexible and can be highly targeted depending on the demographic you are trying to appeal to. Those looking to attract new customers under the age of 25 could look to offer discounts on tickets to sporting and music events, whilst those aiming at the other end of the demographic spectrum would look to push racing club memberships as a reason to sign up. The 35-44 age bracket is one which is widely accepted to have experienced a recent decline, so the offer of discounts or vouchers would certainly be one way to offer an alternative reason for them to sign up.

The Mintel Report confirmed a broadening of horizons is necessary in order to continue to grow the customer pool. Currently bookmakers are recycling the same customers, proving that the active customer pool is not growing whilst they continue to offer the traditional cash-based incentives. In order to attract a new customer demographic, bookmakers should be looking to personalise their customer journey, which in turn drives loyalty from the consumer, rather than them grabbing the cash-back offer and making a run for it.
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IN-DEPTH 4 September 2019
Virtual reality: Creating next-gen experiences for players

Singular CEO George Shamugia discusses a new revenue stream for casino operators

The competition in online gaming is intensifying, with players becoming more and more demanding. In some markets, single-customer acquisition costs can reach up to €400 ($440) alongside growing churn rates. Furthermore, the online gaming sector struggles to attract one of the most lucrative groups of players – millennials. The experience provided by casinos no longer appeals to the younger generation.

On  the other hand, the video gaming industry perfectly understands the needs of millennials and by introducing elements of luck in their games offers the best of both worlds. With the launch of loot box systems and Grand Theft Auto’s in-game casino, we have seen their first successful steps in targeting the online gaming sector. GTA V online, with 33 million active players, recently opened an in-game casino, where players gamble real money on games such as poker, roulette, slots, etc. As a result, churn users returned and GTA Online reached the highest number of active players since its launch in 2013.

The online gaming industry has almost fully utilised the potential of the mobile medium. The time has come to look for new, innovative ways of delivering a next-gen experience to customers.

The potential of VR

Could the next big thing for online gaming be a fully fledged virtual reality (VR) casino delivering an immersive experience and limitless new opportunities?

Although not widely adopted yet, VR has a sizable number of customers. Analysts predict it’s poised for explosive growth to become mainstream in about five years. According to market intelligence firms, the VR market will be worth $117bn by 2022, and according to Juniper Research bets made through VR will reach $520 billion by 2021. Upcoming 5G mobile network technology will propel VR’s mass adoption by allowing the development of fully portable untethered and affordable VR headsets.

Different level of social interaction

The captivating nature of gambling comes from its social aspect. Unfortunately, personal interaction is widely missing from online gambling sites. VR technology creates multiple opportunities to bring back and even enhance that social moment. The ability to connect with other players is one of the main reasons behind Fortnite’s popularity. This form of co-experience is the next generation of entertainment. Research conducted by Facebook has found participants spend more time on VR compared to any other medium. This directly translates into increased profits for casinos.

Pokerstars has made efforts in this direction by implementing Voice UI. Instead of using hand controllers to make a call, pass, or raise, players give voice commands.

Another opportunity for bringing in the social element are the players’ avatars. They enable players to build their identity reflected in the avatars’ appearance, but also the avatar's social, competitive and community status. For instance, players are willing to pay real money for virtual drinks at the bar. Operators can offer these social touchpoints for free to VIP customers as an act of appreciation.

VR also brings a new dimension to customer support. Customer support can also be represented with avatars to assist the player in person. The social moment increases the LTV of players and contributes towards lower churn rates.

Rethinking game design

VR is a way more capable medium than a 2D mobile or desktop screen. Instead of copying the existing online experience, games must be redesigned from the ground up for a competitive advantage with VR. For example, a VR slot game can become fully immersive by teleporting the user into the slots’ world of Ancient Egypt. Next, enrich the experience with high-fidelity graphics, realistic spatial sounds and animations. When betting on virtual race cars, the user can be teleported inside the car he/she made a bet on and experience the race firsthand.

New revenue streams

VR casino lobbies create new revenue stream opportunities: ad placement of brands on the venue walls, company logos decorating the bar etc. This kind of branding is not intrusive in the VR space and feels natural from the user's perspective. VR also gives users the ability to change venues from a Las Vegas casino today, to Macau or even Mars casino, the very next day. The dynamic and diverse experience increases retention rates.

The majority of profits for online gaming operators come from their high-roller players. Although they represent a small subset of active players, an operator can launch a separate VR casino brand for them. Providing exclusive VR gaming experiences to high rollers/VIPs, the operator can minimise churn and maximise VR efforts for these player demographics.

The catch with VR is to focus on quality, rather than scale. The target audience might be limited yet, once these players experience it, they will become ambassadors for your offering.

Surely, the opportunities and possibilities offered by the VR medium truly exceed anything offered by mobile and desktop. VR is a new frontier not just for gaming but for every industry, and it’s exciting to see where it takes the industry and what kind of innovation it brings upon us.

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