ROUNDTABLE

FROM LAND-BASED TO IGAMING

Industry experts from Galaxy Gaming, AGS, GameCo and IGT discuss the bene ts of expanding from land-based to igaming amid changes due to the ongoing pandemic.

CHRIS BONI, IGT PlayDigital vice president Chris has over 20 years' experience across company and product stages, real-money gaming, sports betting, advanced sports content and analytics. He also held leadership roles at Silicon Valley start-ups.

Adam joined GameCo in April 2021 after being partner and global head of gaming and leisure at Fortress Investment Group. He also spent 16 years in investment banking at Goldman Sachs, where he built and ran the Global Gaming Group.

TODD CRAVENS, Galaxy Gaming, CEO As a leader in the gaming industry, Todd knows that success demands discipline and a keen sense of business acumen and planning. With nearly 30 years of experience, including executive positions at TCS John Huxley, American Gaming Systems (AGS) and Betson Enterprises, his competitive nature and reputation for building A-class teams is second to none.

ADAM ROSENBERG, GameCo, CEO

MATT REBACK, AGS, executive vice president, operations

Matt leads the company’s slot product operations, including product management, production and service, as well as its interactive division. He focuses on strengthening the company’s product operations to align output with the growing product demand in the marketplace, using his more than 15 years of gaming industry experience. Before joining AGS, Reback was VP of marketing and slot product for Konami Gaming. Before that, he served in many executive positions for Station Casinos and Caesars Entertainment.

MATT REBACK:

AGS has been in igaming for years and we've found there are several benefits being in both land-based and igaming spaces. At AGS, being obsessed with the game is who we are and why we exist. So we focus on creating great games and making them available to as many players and across as many channels as possible so more people can play and enjoy them. So igaming combined with our land-based penetration, enables us to offer players the experience 24/7 at the casino, at home, work and on-the-go. Plus, igaming continues to be a growth segment for AGS as we focus on expanding the amount of content available to play online, participating in new regulated markets, and deepening partnerships with existing third-party content providers. Finally, iGaming enables us to leverage our investment in game development because we can port our retail content to iGaming channels, exposing more players to our games and creating stronger brand recognition and loyalty.

ADAM ROSENBERG:

Let me start by saying that we remain totally committed to our retail product roadmap. We continue to believe that the land-based thesis is proven and compelling. That said, retail penetration can be a very capital-intensive and time-consuming process. IGaming platforms, by contrast, have built-in efficiencies that enable massive scale and rapid proliferation. Of course, it's just as challenging to create compelling games online that appeal to our target audience, but play-testing, experimentation and the path to market can all be iterated much more quickly and with less capital in a digital environment.

WHAT ARE THE BENEFITS OF EXPANDING FROM LAND-BASED TO iGAMING?

CHRIS BONI:

Expanding a casino operation into the iGaming segment continues to present meaningful growth opportunities for IGT PlayDigital customers around the world. The notion of iGaming cannibalizing play at brick-and-mortar casinos has been greatly refuted. In fact, if you were to speak with any of our PlayDigital customers with omnichannel operations, you would find a unanimous agreement that iGaming has been additive to their overall businesses and has helped them reach new players, drive incremental revenue and engage their players on a platform that is within players’ reach at most times.

TODD CRAVENS:

IGaming is just the next step in serving the customer. Customers used to look for cheap rooms and steak and eggs for $1.99. Customers then looked for high-end restaurants and world-class entertainment to go along with their gaming. With iGaming, customers are now looking for entertainment when they are not in a physical casino. The operators and suppliers are responding to how and when the customer wants to consume gaming content.

WHAT WILL YOUR COMPANY DO TO STAND COMPANY DO TO STAND OUT FROM OTHERS IN iGAMING?

MATT REBACK:

From a player experience, we take our obsession with the game seriously, and I mean every little detail - from the math to the theme to the graphics to the bonus features, to the sounds, animations and win celebrations. We are known for our high volatility games that offer the potential for big wins in a short period of time. We feel that our game content, and that consistently exhilarating high volatility experience, differentiates AGS from others in iGaming. From an operator experience, we always strive to be easy to work with and be a good, flexible and responsive partner. We feel that helps us stand out.

CHRIS BONI:

Among the greatest differentiators for IGT in the igaming sector are our breadth and depth of our content portfolio, our market access and our long-standing relationships with operators and regulators worldwide. From a content perspective, IGT PlayRGS hosts a vast library of player-tested content. We also leverage our decades of experience as a supplier to its customers’ benefit. With deep relationships with operators and regulators, IGT is uniquely positioned to help its PlayDigital customers quickly gain market access and leverage decades of market intelligence to drive ROI.

TODD CRAVENS:

Content, content, content. We are very lucky, as we have some of the best-known table games brands in the world. We log over 125 million bets per month online. That is a good start, but we are unwilling to stagnate.

While operators are continuing to chase customers and spend on marketing rapidly, we see a world where content will become more important and exclusive to operators and their players. There will be brand extensions of existing games, math models taken from our extensive progressive experience and games that appeal to specific markets.

We know what we do well: make great games. We will make more.

ADAM ROSENBERG:

GameCo will do what we have always done: we love games, and innovation is at our core. We architect all our games to be fun and interactive, while providing an experience that is different, not just better. We will continue to make games for regulated gambling markets – on land and online – designed to engage existing customers and attract the next generation of players. And we are just getting started.

MATT REBACK: Over the years, we have been able to perfect and accelerate the process of porting our land-based games to online formats so that now, we are almost able to release games simultaneously in retail and online casinos for an omnichannel launch. We recently released Red Silk online, and we’re getting ready to launch Aztec Chief and Peacock Beauty. All three of these games were recently released and have achieved strong performance on our Orion Portrait platform in land-based casinos, so they are still a fresh new experience in both the retail and online channel. Absolutely. We are focused, to the greatest extent possible, on developing omnichannel games that are specifically designed to have resonance in both the land-based and iGaming markets. While not all games lend themselves perfectly to this model, we believe that tremendous synergies exist across platforms: both markets would benefit from an infusion of new games and differentiated experiences in order to invigorate product offerings, drive incremental play and deliver the next generation of customers. Having a presence across land-based and iGaming also gives rise to efficiencies in the reutilization of art assets, as well as cross-selling and cross-promotion opportunities; we intend to take full advantage of those attributes in building our brand awareness.

IS THERE A WAY TO EFFECTIVELY SYNERGISE THE EFFECTIVELY SYNERGISE THE TWO OR ARE THEY ULTIMATELY TWO OR ARE THEY ULTIMATELY MUTUALLY EXCLUSIVE?

CHRIS BONI:

The degree to which our customers choose to merge their land-based operations with their iGaming operations varies greatly based on their individual business models and objectives.

The two verticals are inherently complementary and our land-based customers who extract the most value from their IGT PlayDigital investments tend to cross-promote the two channels. A great example of this is the success of IGT’s Powerbucks in Canada, our omnichannel WAP product that customers in Canada leverage to drive play and increase player loyalty. Over the last year, while most casinos in Canada have been closed, games like Powerbucks have enabled casino operators to stay engaged with their players and have given their players the chance of winning life-changing jackpots in the online space.

One way our customers go about merging the two channels is onproperty signage and messaging. When entering some casinos, one may find signage that encourages players to download the operator’s iGaming app, or incentivizes them to try an online version of a landbased game. Another method for cross-promotion is through offers delivered directly to a player’s online device that invite players to a casino to enjoy a range of experiences, often based on their online game play. IGT’s PlayCommand platform can be used to support these initiatives, including mining player data to formulate the most compelling and personalized offers possible.

Although cross-promotion can be profitable, customers do need to consider unique factors when pursuing this. For example, we sometimes hear that the iGaming to land-based player conversion only happens when a player resides within a defined radius of a casino. If the player resides outside this radius, the approach may need to be different.

TODD CRAVENS:

I would argue that the two must be linked. Physical casinos used to spend their marketing dollars to drive players into their casino to game. With iGaming and sports betting, instead of spending marketing dollars, casinos have the ability to engage with their customers regardless of their physical presence.

Gaming is entertainment, and when a patron is in a physical casino, there is little competition; but the moment the player walks out the door, every other form of entertainment is competing for their attention. The iGaming competitor is not necessarily another operator but anything else that vies for the time of the player, whether it's Netflix, Fortnite or doom scrolling on Twitter.

CHRIS BONI:

It’s the ideal time for several reasons. First, given the pandemic, consumers are turning to smartphone technology for personal entertainment and everyday convenience at an unprecedented rate. The pandemic has only accelerated the relevance of and demand for digital options. Governments and regulators have also been moving more quickly to take advantage of this opportunity as it relates to iGaming.

Second, iGaming has been trending in a positive direction, across gaming and lottery, for many quarters. Last year alone, IGT’s digital gaming business in the US achieved triple-digit growth. There's no better or more relevant example of this than the record-setting iGaming performance that we’re seeing from Michigan’s online casinos.

Third, I believe the continued expansion and success of mobile sports betting will positively influence more states to embrace and support iGaming.

ADAM ROSENBERG:

We've had our eyes on iGaming for some time now. While Covid interrupted certain trends and accelerated others, the increasing appeal of all things remote – especially in-game play and regulated gambling markets – has been extraordinary. GameCo is in the ideal category right at the intersection of video games, esports, digital delivery and betting, all of which continue to experience robust demand drivers. We are very fortunate to have received our recent strategic investment from Playtech and SpringOwl and we believe we have the right capital partners and the right strategy for right now.

WHY IS NOW THE TIME TO MAKE THE MOVE TO iGAMING?THE MOVE TO iGAMING?

TODD CRAVENS:

As new markets open in North and South America, I believe most people recognize being a first mover makes a huge difference. If you believe the thesis that there will be more online gaming in the future, why wait? Again, if an operator can increase the attention time of their players when they are not in the casino, they must do so.

CHRIS BONI:

Traditionally, the demographics of the land-based player and the iGaming player have been very similar. Because iGaming can reach and accommodate more players than brick-and-mortar casinos, there are opportunities to expand player reach and gradually shift demographics over time. The velocity and variety of PlayCasino content that our customers can offer their players in the online space can be a key driver for shifts of this kind. Additionally, many sports betting mobile apps in states such as New Jersey, Pennsylvania and Michigan feature iGaming content. This creates a situation where it’s likely we’ll see more players cross over into iGaming from sports betting – a segment that typically skews more male and a bit younger than traditional slots players.

DOES LAND-BASED AND iGAMING APPEAL iGAMING APPEAL TO DIFFERENT DEMOGRAPHICS? TO DIFFERENT DEMOGRAPHICS?

ADAM ROSENBERG:

Yes and no. While the typical customer in land-based casinos tends to be older and more female than her iGaming counterpart, the need for new and different experiences is a powerful force in both environments. Thus, while the demographics are a bit different, the demographic trends are not: hundreds of digital game titles are released each month, and yet we see massive cannibalization among those games (just as we see in the retail market). We believe that GameCo will add value by producing additional revenue sources from new players. The need to attract incremental, younger customers with new and different games is clearly relevant in both markets. That’s what we are focused on doing.

MATT REBACK:

AGS has been in iGaming for years through our acquisition of Gamiom. But we’ve never been as excited to be in iGaming as we are now. AGS continues to accelerate the process of porting our retail content to online, and we’re excited about doing more omnichannel game launches. As we continue to grow our library, we also focus on engaging with game developers and building our portfolio of third-party content. Key are our partnerships with the world’s largest online operators.

TODD CRAVENS:

In some situations, it may. However, with every passing day, demographics change. Legal players are coming of age now, and have always had a smartphone. It is native to them. This means adoption will continue to be rapid and will be expected on such devices. Players will come to expect their online play to be recognized when they come into physical casinos. Players will also be looking for the same games to be available to them regardless of how they wish to consume the content.

MATT REBACK:

We have found that people who like to play slots want that experience, and they’ll seek it out in land-based casinos, online casinos or a combination of both. An analogy I often use is the experience of watching a movie. Some people like to go to the movie theater, others want to watch at home on their TV, and some people watch movies on their tablets or phones, while others watch on multiple platforms depending on what is most convenient. If it’s a good movie, it's going to be good no matter where you watch it. Similarly, we focus on creating an amazing gaming experience that can be enjoyed online or in a retail casino, and we find that there’s a strong overlap in player appeal.