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Will 2012 be the year that a major online operator goes bricks-and-mortar? Barnaby Page looks at the latest predictions from an e-gaming pioneer. Plus: acquiring new customers with free games
Crystal balls are rarely the basis of sound business decisions. But it’s surely worth sparing a few minutes to consider Bodog founder Calvin Ayre’s predictions for online gaming in 2012 (and no, he doesn’t think the world will end).
“Convergence swings both ways,” writes Ayre. “In 2011, the focus was on land-based casino companies getting their digital feet wet. Going forward, I can see at least one major online brand laying a brick-and-mortar foundation in 2012. It’s my opinion that the guys best positioned to do this integration are the online companies that control their own technology and are not burdened by massive amounts of debt.”
Live dealers will become more common, he predicts. “The technology has matured, and bottom line, it’s just more fun. Conversely, RNG [random number generator] casinos have grown stagnant due to a profound lack of innovation by the super-complacent companies that dominate this space.”
The most promising region to target this year is Asia, followed by Latin America, says Ayre, although he also describes India as “a massive market that always seems to get overlooked for some unexplained reason”.
In the US, meanwhile, Ayre believes one more state might offer online gaming in some form this year after the Department of Justice’s decision that the Interstate Wire Act of 1961 only applies to sports betting cleared the way for states to regulate e-gaming individually. It might, however, be limited to the Internet sale of lottery tickets, says Ayre.
Taking it easy
As we report in our news section this month, IGT is plunging headfirst into social gaming with the acquisition of Double Down, the firm behind Facebook’s most successful virtual casino. But going online doesn’t have to mean building a fully-functional casino. For example, how about offering a free-to-play experience via social networking that replicates just one part of the land-based operation?
As an illustration of how this could work, consider a new application on Facebook that allows consumers to bet virtual money on real sporting events. It’s modelled on a casino sportsbook, but there’s no reason you couldn’t offer any kind of game following the same principle (and indeed virtual table games might well be simpler to manage).
“I saw an opportunity to provide a betting experience to the millions of sporting fans in jurisdictions where conventional sports betting is illegal or unavailable,” says Socialitize CEO Adriaan Brink, whose firm produced the 2Bet2 application.
“We have tried to remain true to the style and form of more normal sportsbooks while at the same time adding these great social hooks. While we may not achieve the level of monetisation as the large bookmakers, we are well positioned to achieve far greater levels of player participation.”
Players bet, either against one another or against the house, on worldwide sporting fixtures using virtual currency. A small amount is issued to them free when they sign up, and they can buy more online for real money in transactions of $5 upward – but the virtual currency is not redeemable back into their bank accounts. This provides Socialitize with its revenue stream.
The calculation of betting odds is based on Las Vegas sportsbooks, and reflects the odds being offered in real life, with continuous updates. Sports include European and American football, basketball, hockey, baseball, rugby union and league, cricket, tennis and golf. A real-time feed also allows players to comment on each other’s bets.
2Bet2 has no bricks-and-mortar brand. But for operators that do, a project like this is not only a great deal simpler – in terms of both technology and regulation – than putting the entire range of casino gaming online. It could also be an effective way to draw in consumers who might not be sufficiently interested to go through the rigmarole of signing up for a fully-fledged casino, or be happy risking real money: part of the beauty of hosting applications like this on Facebook is that the signup process is, literally, two clicks. And once they’re hooked on the free-to-play service, it should be easier to convert them to a pay-to-play online casino.
Only a small percentage will make the transition, of course – as Ayre warns, “free-play virtual models will continue to grow, but their ability to convert players into risking real money will remain a major question mark”. Yet the cost of servicing those who don’t move beyond free-to-play is so small that the investment remains worthwhile, particularly because it’s likely to acquire some new customers who would never have been converted by more conventional e-marketing techniques such as email or advertising.