Information for Decision Making

Information for Decision Making

Executive Summary

Internet gambling is a massive industry that has yet to reach full maturation. Revenue from online gambling sites is estimated to reach $18 billion by the end of 2008 (Dresdner Kleinwort Wasserstein, 2005). There are currently more than 2,000 Internet gambling sites worldwide (online.casinocity.com). Expansion continues despite the considerable barriers that have been erected to halt online gambling operations.

These barriers include judgments by some jurisdictions to deem internet gambling illegal, demanding advertising restrictions, the decision by leading search engines to disallow online gambling companies from purchasing search listings, and the ban of online gambling transactions by some credit card companies and Pay Pal.

The ability to attract new customers and retain existing customers is a dominant and ongoing focus for Internet gambling providers. Within this competitive and restrictive environment the industry has had to use exceedingly creative and multi-faceted approaches to promote services. While promotional strategies vary greatly all, however, necessarily incorporate a 3-phase process. Phase 1, recruitment, involves garnering attention from potential targets, phase 2, and registration, converts their attention to paid memberships; and phase 3, retention, keeps these members playing at their home sites.

Introduction

The Internet gambling industry has grown exponentially in the last few years. The number of sites has increased from 30 in 1994, to over 2,000 today (online.casinocity.com). Revenue has increased from $30 million in 1994 to $10 billion in 2005, and is projected to reach $25 billion by 2010 (Christiansen Capital Advisors, 2007). Online gambling revenues represent approximately 4% of the global gaming market (Dresdner Kleinwort Wasserstein, 2005), a percentage expected to continue increasing. Today, the online gambler has more options than ever with regard to games and virtual venue.

With so many virtual venues to choose from, competition for new customers and strategies to retain existing customers are top priorities for providers. To help guide the online gambler through the myriad of choices, a plethora of marketing campaigns appear to run rampant through every available advertising medium. But a deliberate and consistent order lies behind this chaos. Getting customers to willingly gamble their money can be viewed as a 3-phase process. Phase 1, recruitment, involves garnering attention from potential targets; phase 2, registration, converts their attention to paid memberships; and phase 3, retention, keeps these members playing (at their home sites).

While Internet gambling companies share many of the recruitment and retention techniques of land-based gaming companies, the Internet domain faces a number of unique marketing challenges. These challenges, driven in large part by the United States Government, have forced the online gambling industry to be innovative in efforts to recruit new players and retain existing ones. This review focuses on methods used by online gambling sites to attract new customers, and retain them. In order to review the marketing techniques used by such sites, a sampling of 40 of the largest poker, casino and wagering sites was reviewed. This sample was selected based on a number of sites and forums that rate the popularity of ...