Since the landmark SCOTUS decision to strike down PASPA in May 2018, states have been passing legislation to legalize sports wagering. New Jersey, Nevada, Delaware, West Virginia, Pennsylvania, Road Island, Mississippi and New Mexico already offer sports betting at land-based casinos. Arkansas and New York have passed legislation and will soon have sports books. So the question of whether or not expanded sports betting would ever be accepted in U.S. has been answered. 

But fear not, there are plenty of other replacement questions in need of answers… What can sports betting do for my casino floor? Will it help my brand? Will a sports bettor translate to slots and table games revenue as well as retail dollars?

Delaware North owns and operates Mardi Gras Casino & Resort and Wheeling Island Hotel-Casino-Racetrack in West Virginia, where sports betting was recently legalized. I was able to have an in-depth discussion with Luisa Woods, vice president of marketing for the global hospitality company’s gaming division, which comprises 12 gaming operations in seven states. We talked about sports betting and its potential impact on the entire casino enterprise, specifically the slot floor. Here are some excerpts from our exchange:

How does a sports book offering translate to the casino floor? Specifically, slot revenue? 

WOODS: We are seeing an ongoing evolution of gaming and entertainment in casinos. Las Vegas now generates more revenue from non-gaming amenities than from direct gaming revenues. This is a direct reflection of both changes in consumer tastes and focused efforts on the part of casinos. Both in Las Vegas and across the U.S., casinos, operating in a competitive landscape, are innovating to create new product offerings and revenue opportunities to capture or retain a greater share of wallet. 

So what does this mean in terms of how sportsbooks can translate into additional slot revenue? I believe there are numerous opportunities both immediate and long-term. The traditional sportsbook is evolving. Historically, it was designed to be transactional. Patrons came to the book to place wagers after studying odds boards and planning their betting strategy. 

We are now seeing the emergence of sportsbooks that are designed as an entertainment space. Casual dining and refreshments feature prominently and there is a social atmosphere. The sportsbook is often more integrated into the casino, rather than tucked away, encouraging the casual and natural flow of traffic from one area of the casino floor to another. This is what Delaware North has done in adding sportsbooks at its two West Virginia casinos.

In the short-term, this setup creates opportunities for people to come to a casino in groups, and for those groups to break apart and re-form as each member pursues their own interests, potentially including slots or table gaming. It also creates an ease of transition from one activity to another, from sportsbook to restaurant to casino floor and back, and finally it establishes a relationship between patron and casino that can be leveraged over time to introduce patrons to new forms of gaming entertainment.

In the long-term, it is important to keep in mind that consumer tastes evolve with their time commitments, disposable income and life stage. A young, single college grad with fewer family commitments may be more interested in a night out with friends at a bar, including playing a skills-based game, backed by research and an appetite to keep up with the latest scores and stats. As that person matures, taking on new life commitments and time constraints, the forms of entertainment that they tend to consume evolve as well, as do the forms of entertainment consumed by persons in their sphere.

What is the journey for a sports enthusiast to become a player club member and how do you grow revenue from this group?

WOODS: Delaware North takes an integrated approach to all forms of gaming that we offer. We strive to make every patron feel connected to our properties and our brands. Membership in our players club, branded as the Lucky North Club at each of our gaming properties, is an important part of this connection; it is our investment in recognizing and rewarding those patrons who choose us among all of their entertainment choices. 

With sports betting, particularly in the case of remote sports betting, individuals can become our patrons without ever setting foot on one of our properties. We have a rigorous process of vetting those individuals to ensure that they are qualified to open an account with us and are physically in a location where they can legally bet with us. Once we have established a relationship with a patron, whether at the property or remotely, we reward them for their patronage. Those rewards come in the form of tier status and associated benefits, earned loyalty currency that they can redeem with us, and members-only offers of discounts and gifts.

Hence the journey to become a Lucky North Club member can start in our sportsbook or while a patron is sitting at home in her living room. Over time, a patron who chooses to game with us remotely can become eligible to receive monthly offers, invitations to events, complimentary room nights and more. A sportsbook patron could achieve our highest card status without ever setting foot on one of our casino properties, and be entitled to a wide range of hospitality benefits. The goal, of course, in investing in all of our patrons in this manner, whether they be retail customers or remote gaming patrons, is to enhance the value proposition to ultimately win greater entertainment wallet share.

How do you grow this customer base?

WOODS: The introduction of sports betting allows us to profitably market to a whole new audience segment and unlocks new advertising and marketing dollars to engage with this segment. Sports betting audiences tend to skew substantially younger than traditional casino games audiences. And typically, it is difficult for casino operators to be able to profitably advertise and market to this audience segment, since relatively few of them convert to slots play or table games compared to the cost of reaching them. 

The introduction of a new product vertical that has greater appeal to a younger audience creates new engagement opportunities. It alters the economics of advertising to this group, opens the channels of communication, creates a relationship with the brand, and therefore provides ample opportunity to then cross-market other products and services that the casino offers.  

In particular, the process of advertising a remote gaming product such as mobile sports betting creates a low-risk transactional opportunity for the patron. He or she no longer needs to make the decision to drive to a specific location to experience our product offering. A simple click to download and register means that a potential patron can try out the sports betting experience from the comfort of home before committing to visit the property. 

In addition, the casino has the added benefit of complete transactional transparency to drive its advertising efforts. The casino can pinpoint specifically which ad on which website drove the patron to install the app and can therefore optimize its acquisition advertising efforts accordingly. This kind of enhanced efficiency allows casinos to grow their customer base at lower relative cost.