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Land-Based Casinos Venture into Online Gambling Waters
By Shane Addinall Mar 01, 2022 IndustryHow lasting the blow from pandemic-induced closures will be is uncertain as the world recovers from the most recent wave. Land-based gambling companies are embracing online solutions to find a solution.The global coronavirus pandemic left once-flourishing land-based casinos with closed doors and, when they could trade, heavy sanitary and attendance restrictions dampened comebacks. As with the law of nature, where only those who adapt will survive, business strategies need to incorporate innovative plans for the changing industry.
In a sense, lock-down forced punters to make use of online platforms, as no other options were available during most of 2020 and 2021. This caused unprecedented growth and demand within the igaming industry, and some casino operators paid attention. Although brick-and-mortar casinos are not completely at a loss after 2021, revenue shares indicate that those who choose to avoid online solutions will lose out.
Australian casino giant, Aristocrat Gaming, sees the opportunity as one to be taken on and recently announced their plans to launch their own online real money gambling platform. Considering the user trends in the past two years, many more may follow.
The New Normal of Global Gambling
The land-based casino industry faces a multi-faceted challenge following COVID-19 and how it changed consumer behaviours. Certain freedoms no longer exist and won’t for the foreseeable future. The Omicron variant and its subsequent wave of global infections triggered closures or increased restrictions in many areas and most countries insist on social distancing and mask mandates.
Consumers discovered the convenience of online gambling. The advantage of placing a stake from a mobile device, wherever you find yourself, is undeniable and many prefer the cashless process that brings a certain sense of increased privacy. Some punters may return to their favourite land-based venues, but many will remain with more cost and time effective online platforms.
Cryptocurrency and blockchain technology present reliable and attractive alternatives for online wagering, while innovative software developers release brilliant content to attract and retain customers. Revenue data from H2 Gambling Capital shows how the online sector boosted EU gambling during 2021 and they predict this trend may persist.
Aristocrat Remains Focused on Establishing an Online Presence
Despite the Australian gambling powerhouse’s failure to gain the online tech company, Playtech, Aristocrat is undeterred in establishing an online footprint of their own. Trever Croker, the CEO and managing director of Aristocrat detailed the company’s plans at their annual general meeting.
Establishing an online real money gaming footprint forms part of their build and buy strategy, and they continue to seek appropriate investment opportunities in this regard. Croker commented:
“We have clear advantages in our powerful product portfolio, strong customer and regulator relationships, full financial optionality and strategic rigour.”
Aristocrat’s online division marks the gambling company’s third brand with Mitchell Bowen, current CEO of Aristocrat Gaming, as the leader. Bowen’s team will comprise new external recruits and leaders from current internal teams while Hector Fernandez takes his place as CEO of Aristocrat Gaming.
A piece of the online cake: Childs Play or Rocket Science?
Online and land-based casinos have a list of similarities, but with shifting focus from managing physical gambling premises to an online platform, some details change. Established land-based providers need to consider a list of differences that may be challenging to overcome and could mean failure if overlooked.
Land-based operators may seek out online casino aggregators for a one-stop-shop solution or, like Aristocrat, launch their igaming division and acquire an established provider within the online industry. Events from the last two years prompt the need for gambling companies to diversify their portfolios and the success and failures of others mark the way forward.
Intuitive teams understand that an online patron seeks a different experience from one who enjoys travelling to a physical casino. Regulatory red-tape and the variations of these from different jurisdictions prove challenging as well, even for those with more than a decade’s worth of experience in igaming. With the vast number of platforms available, one of the biggest challenges to overcome is player retention.
That being said, it is not a completely foreign venture for land-based casino companies, and a rich background in gambling is highly helpful.
Will online casinos Consume its Land-based Counterparts?
Many fear that online casinos will cannibalise the land-based industry, but if we look at established online sectors before 2019, the picture is clear. Markets like the UK show that both can co-exist and, as with retail shopping solutions, consumers have different preferences.
The undeniable impact of Covid-19 and a change in consumer behaviour may cause a drop in attendance for land-based casinos, but Las Vegas and Macau are far from becoming ghost towns.
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