GameAccount Network CEO Dermot Smurfit recently outlined his vision for CEM regarding the short- and long-term future of the London-headquartered company, which develops and supplies online gaming software systems as well as online gaming content.
“Our vision is to enable U.S. casinos to move online. Fast. In some ways they’re the last actors to enter the online race, but have the most powerful tools to compete against the social casinos proliferating on Facebook,” Smurfit said, citing key casino tools such as the casino loyalty program, the patron database, and brand strength. “We think U.S. land-based casinos will inherit the social casino market over time, but not by running a social casino on Facebook. Instead, we believe in building an online environment where the casino can protect their patrons online from predatory advertising (unlike on Facebook) and operate in compliance with the needs of their regulator.”
Smurfit said the vision also ensures GameAccount Network won’t compete against its online clients. “Other companies may be out there offering their services, but retain their enormous social casinos. They’re inherently conflicted, and we’re puzzled how any casino operator might logically choose to work with a direct competitor in the online space. We are and will remain B2B only,” he said.
GameAccount’s product vision is slightly more complex, Smurfit said. Over the last few years, he said, the company has assembled a range of online gaming experiences that align with patron demand, including slots, tables, baccarat, video poker, poker, keno and bingo, and has extended that experience with progressive jackpots and real-time slot tournaments that are familiar to brick-and-mortar casino players. “Layered on top of that is a vision for taking casinos farther, into casual mobile skill gaming! Why shouldn’t casino operators have their own version of ‘Candy Crush’ as well as the obvious slots and table games offered by Simulated Gaming?” Smurfit said.
The company also recognizes that casino operators want to engage with younger, wider customer demographics, particularly the millennial group, and offers products to reach them. “By way of evidence, we invite anyone to play Foxwoods Solitaire on his or her smartphone and enjoy a compelling skill-based casual gaming experience perfectly wrapped in the casino operator’s brand identity and benefitting from the casino loyalty program,” he said.
GameAccount’s for-play online option called Simulated Gaming™ continues to present a compelling growth opportunity for GAN and its casino customers, said Smurfit, who called the offering “a green field market where both GameAccount Network and its client casino operators can carve out and develop a material high-margin and fast-growing business online for years to come.”
GameAccount also sees promise in regulated real-money Internet gaming in the existing New Jersey market where BetfairCasino.com, which uses the company’s online gaming system, has outperformed expectations year-to-date, he said.
Beyond that, the company will see more opportunity coming with incremental regulation of new real money intra-State Internet gaming markets, Smurfit added, noting Pennsylvania is the likely front-runner as the next jurisdiction to offer regulated Internet gaming. “In Pennsylvania, we launched Simulated Gaming in March of this year for Parx Casino via ParxOnline.com, in order to start developing Parx’ online business well in advance of regulation and capture customer data likely to prove invaluable to Parx in the event their state ultimately regulates,” he noted.
Adding Simulated Gaming has been a positive move for Parx, according to Donald Ryan, senior vice president of gaming development for Bensalem, Pa.-based Parx.
“Simulated gaming gives casinos a way to engage their customer base off-property and build a deeper relationship with them online,” he said. “We have a broad spectrum of customers engaging with our simulated gaming offering today.”
Parx chose GameAccount because of the ability it offers to easily transition from a simulated to a real-money offering once regulation allows, said Ryan, who oversaw the launch of www.betfaircasino.com in regulated New Jersey when he was Betfair’s senior vice president of operations.
“GAN is a good partner with a solid platform. I am proud of what Betfair and GAN were able to achieve together in New Jersey and look forward to what Parx and GAN can build together here in Pennsylvania,” he said.
Whether online real-money gaming regulation expansion occurs or not, social casino operations should continue to do well, Ryan said. “These products emphasize entertainment value over wagering. Therefore as long as they keep engaging customers, they should continue to succeed,” he said.
Beyond the U.S. borders, real-money Internet gaming content opportunities lie in the many regulated markets, including Canada and Italy, where GameAccount delivers gaming content to more than three-quarters of the Italian regulated Internet casino market.
Currently, Smurfit noted, the company remains focused on the United States delivering BetfairCasino.com in New Jersey and Simulated Gaming for its client casinos operators.
Established U.S. Presence
Knowing where its growth trajectory was headed, GameAccount Network established a permanent Las Vegas office in the summer of 2013, and by November of that year was already generating income for its U.S. clients. The 13-year-old publicly traded company now has expanded its offices in Las Vegas, and Smurfit and his family have relocated to the U.S. gaming mecca.
That only makes sense, Smurfit said. “Overall, GameAccount Network has more active players online in the United States every day than anywhere else in the world combined,” he noted. “In just two years GameAccount Network has rapidly become a U.S. company with clients nationwide and technology development delivered in London.”
Three U.S. casino operators have gone live with Simulated Gaming and four more in various pre-launch stages, Smurfit said. “In New Jersey, we have a fast-growth real money Internet gaming business in a challenging regulated real-money Internet gaming market with other markets reasonably expected to regulate over time,” he said. “In short, we’ve been delighted to see the substantial inroads already made here in the United States and feel our best days are still ahead of us.”
Evolving Perception of Internet Gaming
That said, Smurfit said that real-money Internet gaming in New Jersey has started slowly as it has taken time for consumers in the Garden State to embrace real-money Internet gaming. He noted that recent studies show that most New Jersey residents are still largely unaware that Internet gaming is legal and can be conducted safely online, and in the early months of its operation, technical geo-location challenges often made the consumer experience less than optimal. In addition, there are other “natural brakes,” he said, such as trusting a website with your Social Security number, and payment processing issues, including U.S. banks denying attempts to deposit funds online. “All this means consumer adoption has and will continue to take time, and that’s why we believe there’s a surprising growth story yet to unfold in New Jersey,” Smurfit said.
Another story is unfolding for casino operators that don’t yet have intra-state regulation, he said. Casino operators are keenly aware of social casinos, including some owned by slot machine suppliers, and have long-sought-for a path to compete credibly online, he said.
The company has been working hard to create that path through Simulated Gaming, Smurfit said. “Our success stories in making online relevant for U.S. casinos are becoming better known, particularly through executive word-of-mouth, which is a powerful force in this industry,” he said. “Perception has perceptibly changed, although it’s worth noting that for some casino operators the Internet will simply remain a challenge for others to tackle, which creates an opportunity for those operators willing to extend their gaming experience, brand and patron relationships online.”
GameAccount has seen a rise in interest from casino operators considering pursuing for-play activities, Smurfit said.
“Today’s operators are routinely smart on desktop, mobile web, and native applications. They consume entertainment in the same way other consumers do across multiple devices and want to know how we can deliver the Simulated Gaming experience to them in the way they know their patrons will want it,” he said. “So yes, operators are more interested and willing to trial our Simulated Gaming experience. This means signing up on a website, playing the games, chatting with online players, downloading the Apps, buying virtual credits and sending emails to our customer services team. We expect this level of field testing and believe this is one of the reasons why Simulated Gaming has made so much progress here in the U.S. in such a short period—anyone interested can experience it anywhere online, right now!”
GameAccount Network has clients today with income streams generating multi-million-dollar amounts, despite minimal expenditure on advertising online, he said. Some casino operators will simply want to “sweat” assets, such as existing Internet traffic and patron email database, while others are seeking to prepare for regulated gaming or reach out to younger demographics. Each requires a different level of investment, he noted. GAN’s Simulated Gaming is flexible to casino operator needs and business objectives, Smurfit said, noting, “But in all instances is a material form of incremental income not currently being exploited by the operator and left to social casino operators on Facebook.”
But before they move to enter the space, casino operators tread carefully, asking a lot of questions, Smurfit said.
“Online gaming, whether Simulated Gaming or regulated real money, is uncharted territory for nearly every operator we speak to in the U.S.,” he said. “As operators approach the online space, there are numerous general questions about the technology that delivers the online gaming experience, the legal and compliance aspects and the day-to-day operational activities required to support an online business.”
Once an operator commits to GameAccount as a partner, the next set of questions determines the division of longer-term operational responsibilities, such as, Who will support the online casino? Who creates digital media content that can be used to convert existing loyalty players and drive sign-ups of players from outside the loyalty base? Who will conduct acquisition and retention marketing online?
When it comes to real-money Internet gaming, the operators typically want one thing: to see the back office. “This is all-important and dictates their ability to adopt, internalize and manage a real-money Internet gaming business and the end-user players throughout their lifetime. Back office systems, reporting, management tools, integration layers, and interfaces are all major components of any typical ‘show and tell,’ and we’re delighted to have a U.S. market-leading back office purpose-built for U.S. casino operators,” he said. Smurfit acknowledged that the comfort process of warming up to relatively new vendors takes time. “Our shareholders and the company’s leadership think long term, and every step we’ve taken demonstrates a long-term commitment to moving U.S. casinos online,” he said. “With that in mind, we’re confident our specialist B2B nature, approach to product development, technology, and support services will place us as a best-fit supplier for tribal and commercial operators alike to move them online.”
Social Gaming’s Rise
Smurfit also spoke to the increasing importance of social gaming to casinos. “U.S. casinos we speak to have heavily surveyed their patrons to uncover competing leisure activity,” he said. “Between one-third and one-half of U.S. casino patrons appear to be engaged playing online with many social casinos while also frequenting their casino property.”
So, Smurfit explained, a casino patron goes home, or leaves the casino property, and continues the gaming experience online but not with the casino operator, and often with a slot machine vendor who also operates a social casino online on Facebook. The loss of this relationship online is increasingly significant to a casino’s existing land-based gaming revenue, he said.
GameAccount knows this because when it moved two casinos online in 2014 each showed an average 28 percent uplift in gaming revenues generated on-property from patrons who had also engaged online with Simulated Gaming, Smurfit said.
“Once a casino launches Simulated Gaming, it increases the patrons’ engagement with the casino brand, the casino gaming experience and results in increased on-property visitation. More visitation results in more gaming revenue on-property,” he said while noting that compared with the material uplift experienced on-property, the online incremental income is a relatively modest amount, but accretive and generally high margin.
A key to unlocking the value opportunity lies with Simulated Gaming’s patented framework for triggering rewards points instantly credited to a rewards account within a content management system, so if a player buys credits online, reward points are added instantly to the player’s rewards card, Smurfit said. “This creates the incentive to return on-property and also grants the casino operator an invaluable edge over the vast majority of social casinos on Facebook, which offer nothing other than the game experience,” he said.
Smurfit noted that the typical U.S. casino has already “lost” up to one-half of their patrons to social casinos operating on Facebook. “We give the tools to get them back, and to protect the rest of the casino’s patrons by offering them a better alternative online, which aligns perfectly with the patron’s existing relationship on-property,” he said.
Simulated Gaming also is proving instrumental in engaging with a younger audience online. “We also believe our casual mobile skill game reaches incremental demographics unreachable with slots or table games,” Smurfit said, noting that Empire City Casino in New York chose GameAccount Network partly to engage with a significantly younger demographic online.
“Having a wide range of gaming experiences and the ability to reach out into the consumer advertising market to address that younger audience is one of the major reasons why Empire City Casino chose GameAccount to deliver their business online,” he said.
Social casinos work to provide added value under difference circumstances, Smurfit noted. “They work when you want to support opening a new property. They work when you want to take market share in a newly competitive market. They work when you want to get online in advance of regulation of real money,” he said. “The success stories are out there, and we’ve helped many of the management teams write them. With Simulated Gaming, we invite anyone with a pure free-to-play website to ‘upgrade’ to a monetized solution which delivers real value on-property and online.”
Looking ahead, Smurfit sees the company delivering online services to many more U.S. casino operators. “And supporting a massive online audience of players which will numerically dwarf the casino operators’ on-property patron visitation numbers (although on-property gaming will continue to dominate online income for many years to come).”
That said, Smurfit noted, the doors to GameAccount’s offices in Las Vegas’ Summerlin area are open to casino leadership teams seeking more information. “We’re holding open workshops for casino operators interested in learning how online works, and how Simulated Gaming will work for them today and in the future,” he said.