Tuesday, June 2, 2009

AGA Report: US Casino Gaming Industry

CM Comment: In case you haven't seen yet ... here's the AGA's report on the US Casino Gaming Industry. It provides information and resources about the U.S. commercial casino industry. It covers the five primary categories of gambling; commercial gaming, Native American gaming, lotteries, pari-mutuel wagering, and charitable gaming.

AGA Report on US Casino Industry

Slotmaker: Baby Boomers, Seniors Still Gamble Most

May 24, 2009: summarized from MercuryNews -- Slot machine maker WMS Industries Inc. says older people still gamble the most at casinos, but young players and minorities are the future of the industry.

The results of a company effort to profile active casino patrons also show customers are less patient and feel more time-crunched than ever, the vice president of marketing for the Waukegan, Ill.-based company said.

"When people have zero tolerance for anything going wrong, it raises the game," Rob Bone of WMS said. "It's important for us to think through the minutiae of what that means."

WMS and marketing and research firm Ypartnership surveyed 2,000 people who had visited a casino at least once in the past year, finding that 48 percent feel they do not have enough time in general while 41 percent feel they do not have enough personal time.

It also showed that baby boomers and seniors make up more than 60 percent of all active gamblers, while minorities make up less than 10 percent-far less than their population in the United States.

Bone said those results show that casinos and slot machine makers will have to find ways to attract minorities to casinos in order to grow. He also said that casinos face a tricky transition between older gamblers who make up most of the market and younger patrons who want different kinds of experiences in casinos.

"We need to realize there's a firm stake in the ground happening and a huge opportunity," Bone said. "How are we going to evolve our business and are mindset for them (young gamblers) to be key slot players in the future?"

Bone said that one thing that might help a transition is that the survey found that gamblers are not as resistant to new technology as is commonly thought.

"We always think of active gamblers as not as astute and that's not the case," he said.

The survey said that gamblers more often than the general population said they had Internet access at home.

WMS earned $24.4 million, 43 cents per share, in its fiscal third quarter as its revenue surged 30 percent from the same three months one year ago despite the recession. Its revenue increased 5 percent to $180.8 million.

During the quarter, the number of machine units sold by WMS dropped to about 6,400 from about 7,800 a year earlier, but the average sales price rose to more than $14,800 from nearly $12,600.

Read more at: http://tinyurl.com/n4wvdd

Aided by Poker Devotees, Lawmaker Pushes to End the Ban on Online Gambling

CM Comment: More on the building momentum surrounding the legalization of online gambling in the U.S. It's no surprise that the opinions of major casino operators runs the gamut. Some are for online gambling in any form, while others prefer a system run by individual states. Opponents worry that Internet gambling will take customers away from their casinos and that it cannot be properly regulated.

May 25, 2009: summarized from the New York Times -- After coming up short in a first effort, a Democratic lawmaker has again introduced legislation that would roll back a ban on Internet gambling enacted when Republicans led Congress.

The legislation, introduced this month by Representative Barney Frank of Massachusetts, would allow the Treasury Department to license and regulate online gambling companies that serve American customers. Under the current law, approved by Congress in September 2006, financial institutions are banned from handling transactions made to and from Internet gambling sites.

At a news conference announcing the legislation, Mr. Frank, who is chairman of the House Financial Services Committee, pointed out that the federal government could collect increased tax revenues if Internet gambling was regulated. But he said online gambling should be legal as a matter of personal liberty, calling it an activity the government should neither encourage nor prohibit.

"Most actions the government should stay out of," Mr. Frank said.

Mr. Frank's bill has roughly two dozen co-sponsors, most of them Democrats. He did not seek the backing of the Obama administration or the leadership in either the House or the Senate.

The legislation does have the backing of those who enjoy poker. The Poker Players Alliance, one of the groups lobbying for the bill's passage, says it has more than a million members and, in former Senator Alfonse M. D'Amato, Republican of New York, a well-known chairman to press its case on Capitol Hill.

Opponents are mobilizing to defeat the bill. They include social conservatives and professional and amateur sports organizations, which say more gambling opportunities could threaten the integrity of their competition.

"Illegal offshore Internet gambling sites are a criminal enterprise, and allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age," Representative Spencer Bachus, Republican of Alabama and the ranking member on the House Financial Services Committee, said in a statement.

The legislation differs somewhat from a bill Mr. Frank introduced in 2007, which never made it out of committee. For example, this bill forbids betting on sports events, while the earlier one let sports organizations decide themselves whether to prohibit online betting on their games.

Like the previous version, the bill allows states and Indian tribal lands to opt out if they do not want their residents using licensed Web sites. It also requires companies seeking a license to employ safeguards that supporters say would do a great deal to prevent minors from gaining access to gambling sites and help combat compulsive gambling.

"The technology is out there," said John Pappas, executive director of the Poker Players Alliance. "It's been tested regularly. And those who fail to use it will lose their license."

Not everyone has been convinced.

The American Gaming Association, which lobbies for the casino industry, says it will remain neutral on Mr. Frank's bill, as it did when the ban was enacted.

Frank J. Fahrenkopf Jr., the association's president, said opinions within the group on Internet gambling ran the gamut. Some members are for online gambling in any form, while others prefer a system run by individual states. Opponents worry that Internet gambling will take customers away from their casinos and that it cannot be properly regulated.

Despite the language banning sports betting, the four major professional sports leagues and the National Collegiate Athletic Association believe the bill could in fact encourage gambling on games. In a strongly worded letter to the House Financial Services Committee, the groups said the legislation "reverses nearly 50 years of clear federal policy against sports betting and it opens the door wide to sports gambling on the Internet."

Mr. Bachus remains skeptical about age verification technology and other safeguards, citing 2007 testimony from an Internet security expert before his committee asserting that such "security measures are inherently unreliable, can be trivially circumvented and will fail at high rates."

Mr. Frank said he believed lobbying by poker players and other fans of online gambling could help reverse the ban. He said he intended to move the bill through his committee before Congress began its break in August.

"Congress kind of sneaked up on the American people," Mr. Frank said of the online gambling ban. "The people woke up."

But there could be at least one powerful roadblock. The Senate majority leader, Harry Reid, Democrat of Nevada, has opposed lifting the ban in the past, questioning whether the government could effectively regulate Internet gambling. And a statement released from his office recently suggested that he had other concerns, as well.

"Gaming is an important industry to the state, and anything that affects it will be reviewed carefully," said Jim Manley, Mr. Reid's spokesman.

Read more at: http://tinyurl.com/kvmgcf

Beware Social Media Marketing Myths

May 26, 2009: summarized from BusinessWeek -- We've been misled as to the benefits of social networking sites. Many of us are finding that these tools do not live up to the hype, especially for small business. Once we start digging deeper, we're finding a lot of challenges. Are you thinking of using Facebook, Twitter, or the like in your business? Before you go any further, consider the following myths:

1. Social media sites are free.
Using social media sites isn't as easy or cheap as many people think. Sure, most let you set up an account for free. And you can integrate other services, such as your blog or Google's YouTube videos, at no charge. But there's a significant cost: your time. Because there's nothing worse than a site that's not current. And to keep it current, someone's going to need to spend time. This includes responding to visitors' questions, posting brilliant thoughts, adding graphics, and monitoring activity-basically trying to generate buzz.

2. Social media sites are a great place to find new customers.
In fact, the major sites aren't necessarily the best places for a business owner. Some of the most avid users of Facebook and MySpace are pimply adolescents and goth teenagers. Sure, there's a growing number of fortysomethings-but many are merely nostalgic to check out boyfriends and girlfriends from youth to see how fat and bald they've become; whatever they're doing on Facebook, it's typically not engaging with a small business brand. Twitter has millions of users, but apparently only four of them actually understand what it does and spend much time updating their tweets. Are these the people who will buy the plastic polymer gaskets your company manufacturers? I don't think so.

3. You need to be on all the big sites.
Besides spending a lot of time and effort, business owners I know who have succeeded with social networking sites generally focus on just a few of them. Although he dabbles in MySpace and Twitter, Gaffigan's main vehicle is Facebook. Some companies prefer to build a business community on LinkedIn. I know a few nerdy guys who live on a couple of technology community sites and generate leads from them by consistently responding to questions and helping other users. Just because the media says it's cool to tweet doesn't mean it has anything to do with your business. If you're going to to frequent social community sites, don't spread yourself too thin. Most of the guys I know who use these things successfully pick their weapon and give it their all.

4. Social networking sites are for marketing.
Baloney. I've learned from other smart business owners that social communities are not for marketing. They're for service. I recently spoke to FreshBooks CEO Mike McDerment, who views these places as ways to get closer to his customers and respond to their needs. "Wherever they are, that's where I'll go," he told me. By providing quick and helpful customer service through these sites, he believes he will foster loyalty and satisfaction, resulting in more sales. In his own way, Gaffigan does the same. Makes sense. So whenever someone tells you that you should explore social networking "marketing," you should run in the other direction. It's the service, stupid.

5. Social networking is the future.
Really? Some of these cool and trendy sites aren't going to be so cool and trendy in the near future. The percentage of Twitter users in a given month who return the following month has languished below 30% for most of the past year, according to Nielsen Wire. And MySpace recently suffered a decline in monthly visitor traffic. Remember GeoCities? Yahoo! is shutting it down. A lot of business owners aren't thrilled about committing time and resources to a vanishing trend. Maybe social networking is a permanent phenomenon. That doesn't mean its main players today will be the main players tomorrow.

So should a business owner use social media sites for business? Maybe. Then again, maybe other customer service approaches make more sense. Remember newsletters, phone calls and support, seminars, partnering, and the like? Just because the media have determined that social networking is "in" doesn't mean your customers are there. Hot Pockets may taste good now, but they're not going to do much good for you in the long run.

Read more at: http://tinyurl.com/pkz5yv

Resort Twitters Away 96 Rooms - Gladly

CM Comment: Another attempt to figure out a way to leverage Twitter.

May 26, 2009: summarized from The Big Fat Marketing Blog -- To celebrate its 96th year in operation, the Grove Park Inn Resort & Spa opted to do something most 96-year-olds don't usually do: It got hip to Twitter.

On a Monday in mid-May, the Asheville NC resort put out an offer to its followers at http://www.twitter.com/ewgrove, informing them that the first 96 callers who dialed a designated toll-free number would win a free one-night stay in the historic resort's Mountain View accommodations.

Within fewer than 90 minutes, all 96 of the giveaway rooms had been claimed.

"It was amazing how fast they went," said Jay Winer, director of public relations for the privately owned resort. "The displays on the phone banks kept showing 'Twitter' to mark the 1-800 number we used specifically for this promotion."

Many of those getting the Twitter message and calling in were new followers on the microblogging service re-tweeting the offer to their friends, he pointed out. "We only had about 42 followers starting out, but when I last checked [on Tuesday May 12] we were up to about 250," Winer said. "We were interested to see the number increase after this promotion. You definitely learn from doing things like this."

Callers who reached the hotel after the 96th free room had been awarded were told to keep following E.W. Grove, the resort's founder, on Twitter to pick up on future offers.

Winer says those are definitely in the works for a future undetermined date. He says the next Twitter offer from the Grove Park Inn may target discounts rather than giveaways.

"You can't wait too long to go after the [Twitter] followers, because they drop off," he said. "But I think the next time we try this, the natural evolution will be to say, 'The next 96 people who call in will get a room for $96.' And then we'll see how many bites we get on the second promotion."

Read more at: http://tinyurl.com/p6p3ru