The Fight … The Big Secret

U.S. Online Poker Industry Is Suffering From Poor Customer Awareness. Is the WSOP the Answer?

Licensed online poker rooms in New Jersey and Nevada have been forced to deal with a multitude of issues during their first year of existence. Some of the issues like the continued presence of unlicensed competitors were foreseen, and others like the geolocation and payment processing difficulties were somewhat unforeseen.

Amongst the various minor annoyances and serious issues, perhaps no issue was more unforeseen than the extremely low level of customer awareness in regulated markets. Low awareness has been holding back the industry’s growth in Year 1, and the problem doesn’t seem to be improving.

Question mark made out of people and a spadeYou might think that raising awareness would be relatively easy enough to address (isn’t that what marketing departments were created for?) yet the solution has proved elusive thus far, and despite multi-million dollar marketing efforts from several operators, and the ongoing media coverage of online gambling, customer awareness in legalized markets remains surprisingly low.

A huge swath of potential online poker players in New Jersey and Nevada are for the most part unaware that legal online poker options exist.

The lack of awareness is not from a lack of spending

Heavy marketing efforts to promote their online gambling products have been the modus operandi of the online providers up to this point, but even running severe deficits month after month, consumer awareness remains a serious issue.

In recent investor calls, the Borgata brass reported a $3.2 million loss during Q1 of 2014, Station Casinos posted a $4.8 million loss during the same period, and Caesars Q1 deficit was reported at $7.1 million.

Station Casinos CFO Mark Falcone listed low customer awareness as one of the major factors stunting the industries growth during their conference call with investors in early May, where Falcone deemed the level of awareness in New Jersey as “very low.”

Online operators in legalized markets have attempted to correct this (and I give them an A for effort) throwing everything but the kitchen sink at the problem; from TV and print ad buys, to billboards, to forming partnerships with professional sports teams.

Unfortunately, looking at the numbers (which I’ll do in just a moment) it would seem that trendy bars without a sign are better known.

More troubling for the future is the news that because of this lack of breakthrough several online gaming providers have expressed their intent to pull back their marketing efforts.

How bad are awareness levels?

According to polling data it appears that roughly 50 percent of the population (nationwide) is completely unaware that online gambling is legal in certain parts of the country, and 1-in-5 online gamblers in a regulated market are unable to differentiate between licensed and unlicensed sites.

The awareness levels came to light thanks to a Fairleigh Dickinson University PublicMind poll[i] conducted in April which asked 1,151 adults aged 18 and older the following question:

“There has been movement by some states to make it legal for casinos to provide on-line, or internet, gambling for its residents. Have much have you heard or read about this…?”

The responses were eye-opening to say the least, as only 15 percent of respondents chose “a lot.” while 44 percent checked off “nothing at all,” with the remainder choosing “a little” or “some.” So, despite a mainstream battle and headlines in the LA Times, Boston Globe, and segments on MSNBC and FOX News, half the country knows absolutely nothing about online gambling legalization efforts — in contrast, efforts to legalize pot had awareness levels that read: 58 percent “a lot,” and just 3 percent choosing “nothing at all.”

Another poll conducted in January by Commercial Intelligence[ii] indicated that players might not only be unaware of legal online gaming options, but even active online gamblers are having difficulties differentiating between licensed and unlicensed online poker rooms.

CI polled 506 adults in New Jersey, all of whom had gambled online in the past 12 months, and the results inadvertently demonstrated this confusion between licensed and unlicensed providers.

According to the company’s data, 21 percent of respondents who “only use licensed New Jersey sites” had placed sports bets online.

The problem with this statistic is the small problem that online sports-betting is not permitted under New Jersey law. No licensed site offers online sports-betting. Wherever these 21 percent of respondents placed a sports-bet, it was not at a licensed site.

These respondents were either lying, misunderstood the question, or most likely cannot tell the difference between an unlicensed and a licensed site.

So what’s the solution?

The solution is obviously not throwing more money at the problem, as plenty of operators have already taken that approach, and seem to be moving toward more focused marketing efforts. There is also the possible expansion of affiliate marketing; a tried and true way to boost liquidity that has yet to be maximized in New Jersey and Nevada.

But perhaps there is a more simplistic answer to raising awareness, a more organic way to market your wares to potential online poker players and get the word out that online poker sites are legal in three states, and that answer could very well be the World Series of Poker.

The WSOP is the biggest, the most prestigious, and the most covered event (print, online, and TV) in poker. The WSOP also has a history of generating buzz, considering the tournament played a key role in the original Poker Boom back in 2003.

The WSOP is such a strong marketing vehicle because of its reach to mainstream America. I don’t talk poker in the house so my wife could pick maybe five poker players out of a lineup, two of those players are Chris Moneymaker and the 2004 WSOP champ Greg Raymer, who my wife calls “The Fossil Guy.”

The reason is because of the WSOP on ESPN. So I ask, can the WSOP solve the awareness problem online poker is facing?

Considering the amount of cross marketing that can be found at the Rio, Caesars (which owns not only the World Series of Poker brand but also operates the WSOP.com and several other online poker sites) is not just hoping the WSOP can give their online poker product a boost, they are banking on it.

For one thing, WSOP.com logos are prominently displayed all over the tournament area and all over the Rio.

It would be near impossible for a picture to be snapped or a hand of poker to be watched, either on ESPN this fall or on the live streams available online, without seeing the WSOP.com brand in some capacity.  From the massive signage lining the walls and hanging from the rafters, to dozens and dozens of player who will be donning WSOP.com patches a la PokerStars or Full Tilt during the heyday of the Poker Boom, to logos emblazoned on the felt of every tournament table, the WSOP.com brand is out in full force at the 2014 WSOP.

You can also expect WSOP.com, to be advertised heavily during the WSOP broadcasts later this year on ESPN, where they will not only raise awareness through the well placed logos during the action, but also by buying commercial time, and that will be money well spent, as the WSOP coverage on ESPN is one of the few poker programs that pulls in mainstream viewers like my wife.

These commercials (if done correctly) and the other WSOP crossover marketing efforts could very well be the perfect medicine for online poker’s customer awareness problem.



[i] http://publicmind.fdu.edu/2014/vices/

[ii] http://www.gigse.com/sites/default/files/CI_NJ_Gambling_Presentation_0.pdf?sid=2485

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July 2014