Does Online Gambling Help Or Hurt Land Casinos?
New US research finds that online operations complement and enhance land gambling activity. The New York-based research company AlixPartners has found in a recent study that Internet gambling helps, rather than hurts, land casino business.
The study may allay fears in the land gambling sector that getting into online gambling could cannibalize the brick-and-mortar business. In fact, the survey found that online gamblers could be a most lucrative segment for brick-and-mortar brands.
The research
The result of extensive data-mining of responses from a recent AlixPartners consumer gaming survey – discovered that what the firm dubs “Online Enthusiasts,” defined as gamblers who play online as well as in land casinos, visit brick-and-mortar casinos almost as frequently as “Consistent Members” – gamblers with the highest casino-visitation rates among all customer segments studied.
The analysis also revealed that the average ‘theoretical' – the estimated dollar amount a player is worth to a casino – could be as much as 10 percent higher for Online Enthusiasts than for those who only frequent brick-and-mortar casinos.
The online gaming customer typically has an average daily gaming budget 30 percent higher than “Destination Tourists,” the customer segment with the next-highest average daily gaming budget.
“This in-depth analysis suggests that the Online Enthusiast segment has the attributes that all brick-and-mortar casinos should cherish: higher consumer gaming budgets, higher theoretical and more frequent casino visits,” said John Bonno, a director at AlixPartners and a member of the firm's Gaming Practice division.
“The research also suggests that casinos that can tie online gaming activities to casino visitation through loyalty points or other means can create competitive advantage. The key, though, will be knowing which kind of customers to target, and when.”
Mike Sinoway, managing director at AlixPartners and leader of the firm's Gaming Practice said, “We analyzed several dozen variables and attributes that define unique customer segments and found, among other things, that gaming companies should be viewing online gaming as an opportunity and not a threat.”
The Alix research study analytically mined, using k-means clustering methodology and other techniques, the input from a January AlixPartners survey of 1,031 adult Americans. The respondent group was taken from a generally representative sample of the U.S. population and selected from those expressing a general interest in gaming. The study examined multiple forms of gaming, including lotteries, race-track betting, sports books, local casinos, destination casinos and online gambling.
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