Conversion Corner: Looking for betting customers? They are at your casino

If you are a retail casino or sportsbook operator, you will most likely be hosting watch parties during the football season. But with online and mobile betting now live in a growing number of US states, there is a new dimension to this year’s gatherings.

They can and should be used to gather email addresses and drive casino patrons attending to your retail and online assets, even if you are in a state where real-money gambling has yet to be legalized and you are currently limited to a freeplay offering.

This is because casino patrons are primed and ready to be converted into online bettors. And because they are already on your property, they can be acquired for a much lower cost than across other channels such as above-the-line marketing, sponsorships and so on.

In the past three years, we have seen marketing budgets skyrocket as betting operators chase the valuable but, at times, illusive sports bettor. Spending by operators on ads, sponsorships, partnerships, and digital activity was more than $1bn in 2020 and will certainly increase this year.

Casinos with sportsbooks are beginning to see the effects of leveraging their loyalty databases and are starting to better understand the value of their casino patrons as a great source of revenue in an omni-channel approach to sports betting and igaming.

Right now, the rage seems to be in online and mobile sports betting (online betting accounted for 92% of all wagering in New Jersey in 2020 and that number is holding steady in 2021) but there is tremendous value in engaging potential sports bettors at a retail level to educate and acclimate them to online gambling.

While retail betting may only be less than 10% of all betting, the engagement at the retail level is critical for casino operators that want to protect their loyalty database from other, more aggressive brands and onboard their casino patrons to digital gaming.

My experience with casino patrons is that they are loyal to the casino brand and will eventually consolidate all their gaming in one “account.” Loyalty point integration between land based and online can be a big driver for retail operators looking to launch sportsbooks and online casinos.

When I ran a book inside a large casino group, 65% of our land-based casino patrons on the loyalty program said they would bet with our casino sportsbook. The result of this was higher customer lifetime values from loyalty program patrons and a far cheaper strategy for acquiring and retaining customers for betting and online casino.

A few casino groups and software providers are already giving insight into the need to look no further than the casino floor for growth in their sportsbooks. There are other upsides, too; it is widely reported that the opening of a retail sportsbook will increase customer spend on food and beverage as well as on table games.

For me, the true value of retail sports betting engagement and education for casinos lies with the collection of great data on existing players, conversion of uncarded casino patrons, and being able to market to them digitally about the casino’s online gaming (social casino, sportsbook, online casino) products.

This allows them to better market casino property activities such as concerts, slot tournaments and table games promotions which in turn drives foot traffic.

The below are some data-driven insights on what operators are saying about retail to online conversion in various quarterly results and investor presentations from the industry.

Penn National

The below graph shows how Penn National sees the total value of customers when it can leverage all types of gaming it offers in the state of Michigan. It looks to almost double the customer lifetime value if it can expose its loyalty program members to other forms of gaming.

The operator’s ability to engage, entertain and communicate to its patrons in retail and on digital channels is a differentiator that Penn feels it has over other operators and will certainly increase its revenue as a result.

Penn has been clear about the value of engaging with customers on as many products as possible. In Michigan, for example, the operator is focused on the cross-selling of its sports bettors to online casino.

With the lack of profit sportsbooks are making compared with the massive profit online casinos are generating, this is a sound strategy.

BetMGM

Another operator that has provided clear data on the value of taking an omni-channel approach is BetMGM. In a recent Investor Day presentation, BetMGM said that “omni-channel attracts and retains players with money-can’t-buy experiences.”

It added that an “award-winning rewards program builds loyalty and provides a distinct competitive advantage.”

Omni-channel simply means that they communicate with their players on many different channels across online, mobile, retail, etc and via their brand, partner brands, sponsors and so on.

The distinct competitive advantage certainly comes from the casino group leveraging its existing owned and earned communications and patrons, and simply getting people to bet with its sportsbook or online casino in the states where it is legal to do so.

The graph below details the true competitive advantage from a financial perspective. BetMGM is able to acquire customers through its omni-channel approach far more efficiently.

I find the most important aspect of this data is that they expect this process to become more efficient. They are looking no further than their existing databases and catchment through all the marketing and partnerships secured for MGM; it’s just about leveraging existing assets.

​​While BetMGM is discovering that it can acquire players far more efficiently with owned and earned media, it is also discovering that those same players are worth more than normally acquired customers.

Kambi

Software supplier Kambi has also shared some insights on the value and types of customers that sportsbooks bring into the casino environment.

There is certainly a skew towards a younger audience for the sportsbook on the casino floor so this should be seen as an opportunity to attract a younger audience to the casino floor.

In addition, land-based customers who engage with both casino and sportsbook are five times more valuable.

This point alone should give operators pause for thought and encourage them to start engaging with all customers on the sportsbook (or the eventual coming of a sportsbook) even if sports betting isn’t legal yet or if the sportsbook alone isn’t the most profitable in isolation.

Leveraging existing assets and land-based casino loyalty databases are the best way to combat the early spend on marketing by some of the largest betting operators.

I am often asked the question “Where will our betting customers come from?” and I start with an organization’s owned (retail, website, sponsorship properties, etc) and earned media (casino social media, partner social media, etc) because operators don’t have to pay additionally for it.

All retail activity can have a digital component to it and it should start by engaging with your patrons around the coming football season as they come in and watch the games. After all, they are already on your property.