Skins game: Online casinos need multiple options to attract cross-section of players

Operators have built their player databases through various acquisition channels. From there, the funnel to successfully convert an existing patron to a registered/deposited player is a function of various factors. Product and promotions, but also brand recognition, familiarity, and trust are all in the mix.

For online sports wagering, to this point, one brand per operator has generally sufficed. Conversely, a review of the U.S. regulated online gambling operator landscape reveals that there is a clear need for operators to rely on more than one brand for online casinos.

If online casino legislation in future states follows the pattern set by currently enacted sports wagering legislation, online casino operators may not have the ability to offer multiple brands under one license. Requiring online casino operators to obtain multiple licenses to offer multiple brands may have consequences. Such a decision could negatively impact the number of operators who enter the market. (Assuming the number of operators/access points is capped in law).

Limited skins could mean limited online casino offerings

This is currently an issue in Michigan. The law allows each of the 15 allocated licensees to offer one brand for online casino games and poker. As a result, Caesars purchased WynnBET’s online casino license, but won’t change anything immediately. Caesars’ goal is to launch a second of its own online casino brands later this year. In turn, this keeps another prospective operator out of the Michigan market.

In Illinois, only one online sports wagering platform (brand) is available for each casino or horse track. A similar approach to online casinos could preclude new operators from entering the market. In a state like West Virginia where each casino/racino can deploy up to three branded platforms (sports and casino), a company like DraftKings will require three separate licenses if it wishes to offer the Jackpocket online casino brand in addition to its current DraftKings and Golden Nugget online casino offerings.

Of the 38 states (plus D.C. and Puerto Rico) that have legalized sports wagering, only eight have legalized online casinos. With 40-plus states not having passed online casino legislation, now is the time to ensure branding limitations do not become an issue in other states in the future. (Note, Nevada has only authorized online poker and would require regulation changes to allow other casino games.)

Read the full story here.