Caesars Digital: translating land-based success to iGamingBy William - 1 March 2023
Across North America, Caesars’ iGaming offering is currently available in four U.S. states and Ontario, Canada. Matthew Sunderland, SVP of iGaming, explains how Caesars Digital is looking to increase its share of an eye wateringly lucrative pie over the coming years with a focus on quality over quantity.
What differentiates Caesars Digital’s iGaming offering from other North American operators?
Our overall competitive advantage goes back to our brick-and-mortar legacy. Caesars is the number one gaming company in North America in terms of properties and distribution – with the largest customer loyalty database. Long-term I want to replicate that status in our online business.
iGaming has served as a complement to the growth of our existing brick-and-mortar business. The commitment to growing our iGaming offering while simultaneously spending hundreds of millions of dollars on physical improvements to our destinations is intentional because the two are compatible and mutually beneficial.
We currently have a strong and growing iGaming business with a roadmap of product improvements that are going to be rolled out towards the back of 2023. More recently, we’ve started bolstering our game catalogue by adding in some of the top-performing content in North America. We have recently penned studio partnerships with the likes of PlayAGS, DWG, and Pariplay to go alongside the additional iGaming product improvements that our team has been focused on.
Caesars is one business and while there are different business lines, everyone works together. It’s not divided up which is really refreshing, and I work with the brick-and-mortar and loyalty teams regularly. iGaming will become much more relevant as we continue to scale in terms of building up the number of omnichannel customers and honing how we reward, retain and communicate with those customers as a single brand.
I’m focused on three areas right now. First, top-performing omnichannel game titles that work well in both digital and brick-and-mortar. That’s important for running cross-promotions to customers, for example, play this game in Caesars Atlantic City and continue playing at home on our iGaming casino app for double Caesars Rewards points.
Secondly, we are building relationships with reputable game studios. On our agenda is more exclusive content from these game vendors and potentially our own IP branded content – not just for Caesars – but for our legacy brands like Horseshoe, Flamingo, Harrah’s and Tropicana. There is a full suite of brands inside the Caesars family which I am looking forward to exploring further.
Third, delivering best-in-class content to our existing VIP customers. It’s important to have knowledge about how the market works as to whether it’s prudent to push a digital game or a brick-and-mortar title to certain customer segments. Quality over quantity with the proper approach will go a long way.
How significant a role will iGaming play if Caesars Digital’s overall market share is to surpass the likes of BetMGM, DraftKings and FanDuel?
The opportunity to scale our iGaming business is enormous. New Jersey’s revenue monthly for online casino is around $150m. That’s a significant amount of money for a state that has around seven million eligible customers. In contrast, 2022 online revenues in Michigan were $1.5bn… so we’re not talking about small numbers.
North American players are by nature casino customers. They have something that doesn’t exist in Europe. While Europe has brick-and-mortar casinos, there are not mega hotel destination resorts like there are across the North America. Gambling is built into the North American DNA. iGaming is the bedrock and foundation of any digital gaming business in Europe and in North America iGaming will only continue to grow.
I recently read a statistic that only 13 per cent of the U.S. adult population has access to legal online casino products, that speaks to the potential of this industry. There is constant chatter about other states regulating – and you just need to look at the ramp up in Michigan over the last two years to see the high demand that already exists. This will bolster everybody’s market share, ours and our competitors.
Of the six states to have legalised iGaming thus far, Caesars’ iGaming offering is available in New Jersey, Pennsylvania, Michigan and West Virginia. How would you assess the iGaming landscape in these four states?
New Jersey is a stalwart. Online gaming has been available since the end of 2013. Michigan has only been live for a couple of years and has far surpassed New Jersey. At this point, there are different customers by state.
New Jersey players are much savvier now in terms of promotions and game content. In the early days of Michigan, land-based titles available digitally offered customers a sense of comfort rather than just pushing digital-only content. We’ve had to educate this player base. West Virginia is relatively small in terms of the overall population so it’s tougher. There are multiple active operators and the pool to fish in is smaller.
With all these states it’s about product innovation. I don’t think we’re seeing enough of that in our industry across North America or Europe. Every state is a new market. Localised content works and omnichannel promotions typically depend on what retail casinos are available in that state. There is no catch-all.
State by state player differences can be stark. Some games we launch that are extremely popular in Europe just don’t take in the U.S. despite a healthy marketing push. But there are some similarities. Jackpots attract players. Currently, games with complicated promotion mechanics don’t tend to fly as well in North America as they do in Europe. That’s just the maturity of the business.
As well as these four states, Caesars’ online casino has also gone live in Ontario. How do you reflect on the launch? Do you believe Ontario will grow into one of the strongest markets on the continent?
It will. Canada will grow as new territories regulate. The interesting thing about Canada is that it was a grey market, so people were already operating before it was regulated. Customers were already playing online casino making the market launch easy and difficult in equal measure.
This meant that certain operators who weren’t going to stay in the market left and certain operators who wanted to enter the market arrived, but the customer base was different from that of a newly regulated state in that they were already iGaming savvy.
It’s been an interesting journey in Ontario so far. It seems that Ontario players really favour live dealer as a product line – certainly in our business where there is a higher percentage in proportion of player versus other North American states. Each state or territory has its own nuances. One unifying product is that everyone likes playing Blackjack, be it RNG or live dealer.
What are your expectations for New York’s iGaming market as and when it opens?
If and when the New York market opens for iGaming it would, obviously, be big. We’ve seen great success with sports betting in the state and would be excited about the opportunity to launch iGaming.
If given the opportunity, we’re confident we could offer customers the chance to enjoy digital gaming in a responsible manner thanks to our decades-long commitment to responsible gaming and responsible gaming education.
How does Caesars Digital’s approach to market differ depending on whether the Caesars Sportsbook is already live and offering sports betting?
If we have a sportsbook operating in a state that regulates iGaming, there is clearly a large amount of cross-sell to be had particularly when there are inflection points such as major sporting events. We will continue to remain focused on that growth and invest from a tech perspective with product enhancements.
We’ve acquired customers and are focused on retaining them. At this point in time, we have more to do in iGaming. We are very focused on player retention and betterment today using automation and omnichannel offers.
Currently, we’re focused on product enhancements. Obviously, we’re live and driving revenue, but in tandem, we are bulking up on product – not just in games content but our live dealer experience, our app UX, how we communicate with customers, segmentation, and linking back into our omnichannel and Caesars Rewards database.
Caesars already has a big proportion of brand awareness. Everyone has heard of Caesars, so we don’t need to purchase brand awareness. This is helpful when it comes to launching in a new state or territory.