Will the land-based casino sector ever be the same? What changes will have been brought about by the Covid-19 pandemic? Such questions are crucial when it comes to understanding just how much of an impact has been made on this huge industry and, subsequently, how much of the land-based casino sector as we know it will never be seen again.
Jakob Rothwangl, Novomatic AG, VP Global Sales, shares his thoughts and opinions on the impact of the pandemic on the land-based casino sector and importantly, how the sector will look in the near future after this unavoidable yet significant change.
Firstly, however, it’s crucial to gain some insight into the general ways of the land-based casino sector, even before the world was brought to a halt by the pandemic.
According to Rothwangl, it is a sector that has “constantly diversified.” The VP Global Sales explained that “offers have broadened in every sense: depending on the market, either more machines on the floors or more games in the machines; more features in the games; a growing jackpot offer that has developed from simple jackpot concepts to progressive links and WAPs. ETGs have blurred the boundaries between the classic table games and the slots floor."
Concurrently, he continued, “non-gaming amenities have become part of the overall entertainment offer and keep gaining shares in destination tourism.” And in more recent times, there has, of course, been a significant trend of diversification among land-based operators to enter the online segment, providing what Rothwangl calls an “alternative additional offer that stands the pandemic test.”
The height of the pandemic was, naturally, a turbulent time for the entire world. It is also still causing much interference, with many industries affected. The gambling industry was no different. And land-based, unsurprisingly, with all of its related closures and strict regulations, felt the greatest impact.
When asked how land-based casinos dealt with closures throughout the pandemic, Rothwangl replied: “We observed diverse strategies. Some operators proactively used the lockdowns to realign their gaming offer – renovation measures, which would normally require them to close at least parts of their venues, and an update of their machine park went, hand in hand with the implementation of the social distancing measures. Others were initially paralysed and primarily worried about the financial impact and social consequences, such as their responsibilities towards staff. And many eventually evaluated online options.”
There were Different strategies for different operators, but there was one aspect that remained constant. Rothwangl summarises the situation well, explaining that in any case, the industry saw an awareness of land-based casinos’ “responsibility towards guests and staff alike, with the committed implementation of biosecurity protocols and distancing measures.”
One strategy that the industry did bear witness to was the transition from land-based to online. Countless casinos were forced to make such a switch and they have not only survived in these unchartered waters, but thrived.
Yet for many different reasons, this switch was simply not possible for several land-based operators. Legal restrictions, timing, audience and perhaps trepidation were among the complex issues involved in the process. However, most operators slowly but surely clocked the inevitable benefits.
“For many it was a jump into the deep end, but most of them sooner or later realised the advantages of diversifying into the online sector – of course within the legal possibilities of the respective gambling legislation,” noted Rothwangl.
“In the US, for example, some picked up the social casino trend very early on, and by building a solid online player base, benefited from the many advantages of these solutions in the area of customer relationship management. However, with regulatory changes and at the latest since Covid-19, many casinos have ventured into the online sector as an alternative offering for their players.”
He provided the specific example of one of Novomatic's companies, saying: “Greentube has seen massive growth, especially in recent years – a fact that can be attributed to the increasing demand through Covid and Greentube’s unique position as a provider of excellently established content that is familiar to land-based players."
The turning of millions of customers to online casino as a direct result of pandemic-related closures has certainly improved that vertical, but online’s joy came at the expense of the land-based vertical, with brick and mortar casinos hit hardest by the events that have occurred over these past few years. As Rothwangl explains, though, land-based casinos need not fear. When asked the question how can such venues attract players that have turned to online casino, he replied: “Land-based casinos will have to create a new self-awareness of their USP. That comprises a lot of emotional aspects: the unique look and feel of a casino, its atmosphere, service and hospitality; the soundscape, the smell, the physical touch of a slot, the haptics of the start button and last but not least the social aspect of a casino visit, whether the guest comes alone and engages with fellow players on the floor or whether they come in groups for a fun night out.”
As someone working heavily within the land-based sector, he can be forgiven for expressing his tendency to lean towards brick-and-mortar when placing it next to online casino.
“It’s a world of a difference whether I hit a big win online or whether it happens in the middle of a casino floor,” claimed Rothwangl. “And again, it’s all about emotion: excitement, pride, shared joy – even envy. Think of what exclusive online players miss out on! It’s obvious that I am a land-based fan through and through…”
It’s certainly not in the hands of those within the gambling industry, but it’s telling how different regions have handled the pandemic in different ways. Some methods have proved hugely successful, others have not. Like many others within the industry, however, Novomatic’s VP Global Sales is not short on confidence. When asked if he thinks the European land-based sector in particular can return to pre-pandemic levels, he replied: “I am convinced that it will. It is already recovering, but it is a process that is ongoing and one which strongly depends on the further pandemic curve – and in this context, it also remains to be seen how the situation in Ukraine will affect the overall economic situation. Of course, as players are returning to the gaming floors and GGRs bounce back to pre-pandemic levels – and often even above – even the most cautious operators find the confidence to invest again in their venues.”
Such confidence is definitely hard to deflate when patrons are returning to land-based venues in numbers. Returning customers bring excitement for all, especially for Rothwangl, who shared his joy to see Novomatic’s gaming offerings on casinos floors now that land-based venues are reopening.
He told Gambling Insider: “Well, it feels good! We have an excellent portfolio of very well-performing products in the international markets, such as linked multi-game offers like the Cash Connection and Impera Link across Europe; and other market-specific products for the US and LatAm.
He continued: “On top of a solid stock of classics that players keep returning to, we also have a constant pipeline of new content that will guarantee fresh impetus and player excitement – and will yield a positive ROI for operators.”
As mentioned, the Covid-19 pandemic has wreaked havoc on the land-based industry. And nowhere has this been more felt by industry veterans than when it comes to exhibitions. After much delay and much deliberation, ICE London finally took place in the middle of April, but it is an event that arrived fractionally too soon for many companies, including Novomatic.
“That was a very tough decision and one that we certainly didn’t take overnight,” said the company’s VP Global Sales. “A whole committee had been observing and analysing the overall situation for weeks and, of course, we were in constant talks with the show organiser, Clarion. Eventually, a multitude of adverse aspects – including the pandemic, logistical challenges and the unfavourable and unavoidable alternative date – have culminated in a situation in which we decided that participating in the show was no longer viable.
Fortunately for Novomatic and indeed ICE itself, the group plans to return soon, with Rothwangl noting: “Of course, we are aware that ICE is a major industry event and we certainly hope that the successful cooperation can be continued under more favourable conditions in 2023." Importantly, the group’s absence from ICE doesn’t mean a complete absence from land-based events, with Rothwangl adding: “In the meantime, we are focusing on smaller regional events, which will also be complemented by a number of local customer events organised by our regional offices throughout the year, each with its country-specific focus and colouring.”