Making lemonade out of lemons in the time of the stranded gambler
The land-based industry in the U.S. is faced with the prospect of having many more losers than winners in the coming months, with missed forecasts, steep revenue decline and even cash bleeds stemming from closures.
Things might not get better quickly either, with the hammering of the nation’s economy certain to have dented consumer confidence and damaged the spending power of casino patrons.
And yet, Soper believes those that have chosen – and are able – to invest in online operations will benefit the most, with their successes set to kick-start further legislative change in the near future.
He said: “When the dust clears, those operators with a strong balance sheet and more accommodating lenders will fare the best. But as history teaches us, the reality is that the current economic situation and consumer mood at the time of re-opening will dictate the response. We learned in 2001 and 2008 that bounce back may not be immediate.
“Upon re-opening, there will be changes that will impact demand, including of course social distancing and crowd control measures. The severity and extent of such measures will in large part be dependent upon the timing of the development and implementation of a vaccine to remove fears and help restore consumer confidence.
“While there are few published revenue numbers since closure, anecdotally, online gaming operators are enjoying a major surge in demand having been presented with the chance to monopolize share of wallet. For online operators that execute well during this time of the ‘stranded gambler’ it is an incredible opportunity to expose their product to new consumers who would not otherwise have tested it.
“For the long-term strategic thinkers, it can also be an opportunity to illustrate the importance of online gaming, and therefore catalyze efforts to expedite its legalization in jurisdictions where there is potentially enough support to do so. It not only shows the importance of having a product that can be played remotely, but in order to preserve jobs, any such authorizing legislation should be tied to the land-based facility.
“To put it simply, while the negative short-term implications of Coronavirus will never be wholly mitigated, this is a time to make lemonade out of lemons through legislative change.”
For those that don’t have an online gaming available in their armoury there are still reasons to be hopeful, provided they use this time wisely to engage with their customer base.
Whilst Soper accepts it is probably too risky to launch any large-scale campaigns given the uncertainty around physical capacity restraints when casinos do re-open, there is much that can be done.
He added: “Strategic management teams need to develop a portfolio of campaign options with appropriate incentives to drive business that can be immediately launched upon opening after assessment of initial volumes and within the context of current constraints.
“From a marketing perspective, those operators that do more now during the closure to incentivize their guests to revisit after re-opening will have a competitive advantage.
“Those with social gaming, for instance, can seize the opportunity and elevate their efforts to leverage this platform for customer engagement and incentivization. There are more traditional avenues too such as e-gift cards, which is a tool some of the national restaurant operators are using successfully to generate revenues during closure while creating incentives to visit the property upon re-opening.
“Ultimately, the long-term health and survival of numerous gaming companies will depend on factors including how long it will take to rebound, and how permanent - and to what extent -behavior will have changed due to the pandemic. The good news is that there seems to be some help through direct government aid and, perhaps more importantly, a more thoughtful and accommodating approach by lenders compared to what we have seen in the past.”
Soper, who is the former president and CEO of Mohegan Tribal Gaming Authority, is set to speak at the forthcoming ICE North America Digital, which takes place between May 11th-15th. For more information on how to register for free click here.