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All to play for?
Mitch Garber, CEO of Harrah's Interactive, explains to CI the grey area between land-based and online gaming and how close the two have now become
Mitch Garber is blunt: “We as a company are looking at the future of gamers. Those who today are under 20 are living their lives on the Internet.”
The CEO of Harrah’s Interactive Entertainment, who previously held the same position at PartyGaming, is a firm believer that for land-based casino operators, moving online should not be seen as a flank-covering adjunct to their main business but as the first step on a long journey toward a gaming world where online and offline not only co-exist but complement each other.
The firm has a powerful suite of brands – including Bally’s, Caesars, Flamingo, London Clubs International (LCI), Planet Hollywood and World Series of Poker as well as Harrah’s itself – which it is now leveraging online, where it has already launched Caesars Online (www.caesarscasino.com and sister site www.caesarsbingo.com) and www.WSOP.com, which are only available to UK residents. Garber makes the point that Harrahs has an extensive offline database of players, which they can access to attract new visitors to their online presences. Most online gaming sites don’t have the benefit of being affiliated with a casino operator in the countries they are targeting. Harrah’s can utilise the extensive player databases from its London Clubs International portfolio of casinos in the UK.
But Garber’s objective is not to see off the Internet pure-play competition. Instead, he is looking ahead a decade to a time when the online and offline brands “will absolutely coalesce more”. Harrah’s wants an online relationship with its offline customers, and vice-versa, he says.
“We’re attracting a new customer who has not visited one of [our] physical properties” but may nevertheless be familiar with the famous brands, according to Garber, who points out that it’s even possible to use offline assets to enhance the online offering, for example by offering casino visits as player incentives.
He dismisses fears in the sector that online gaming will cannibalise land-based casino revenue, observing that when online was legal in the US, that didn’t happen – and that playing patterns are different.
Online gamers make more frequent visits to their favourite sites, but spend less money each time, with cash coming from a nightly or weekly entertainment budget rather than out of the money they’ve saved for a big annual splurge like a week in Vegas.
The implication is that both for the industry overall and for individual land-based firms going online, the new channel should add to total revenues rather than just carving up the same pie in a different way.
Equal opportunities?
For land-based casinos, going online may seem like a relatively straightforward way to extend a brand’s gaming offer, with plenty of specialist firms ready to hold hands and none of the headaches of building hotels and hiring thousands of staff. But could it work the other way too – could the best-known online brands be tempted to move into bricks and mortar?
Unlikely, says Garber, suggesting that the huge capital costs of setting up a real-world casino as opposed to a virtual one are likely to be a strong deterrent. Yet he believes that as well as branded online developments by the land-based operators there could be outright mergers or acquisitions, bringing together gaming titans from both camps.
So ten years from now, as Garber’s new generation of gamers who have barely known life without the Internet comes to the fore, the casino business could look a lot different – both on the ground and on the screen.
