Lou Krieger recently posted something he didn’t link to the original source for so I can’t vouch for the fact that it was a full and complete representation of the opinions voiced but according to Jim Ryan, CEO of PartyGaming, “internet gaming companies can provide casinos with player data and customer tracking technology that’s far better than the technology they use now, and could become the leading edge of casino industry equipment manufacturers if the US legalizes online wagering.”
Really?
No offense to Jim because I like the guy – I think he’s a straight shooter and very grounded – but unless he’s talking about the mom and pop casinos that populate Europe I’m a little confused by that claim. According to Lou this is the exact quote:
“We utilize technology for e-commerce and can capture player information on a far better scale,” said Ryan. “We can see ourselves becoming partners with traditional casinos.”
While I believe part of that to be true (the “capture player information on a far better scale” part) it’s also hard for me to fathom the connection between online and offline gaming in that particular sense. Online we know things like hole cards that can tell us a lot about things like collusion or chip dumping. We know exactly how much has been wagered, the win rate, and lots of other data. Offline I don’t think it’s that simple.
The problem in offline casinos is data collection. And, to be completely honest, I think that most offline casinos, even with less data to collect, still do a better job than online casinos in profiling their customers.
I say mostly because:
a) I know analysts in the offline gambling world and how much man and computing power they put into trying to understand their customers.
b) Many land based casinos have won awards for CRM (Customer Relationship Management) technology implementations while not a single online casino has even been nominated for such an award.
Years ago before I even started working in this industry I complained about the fact that no online poker room could distinguish me as a cash game player. I would say that 80% of my play has been cash games, 15% SnG’s and 5% MTT tournaments yet every piece of marketing correspondence I get from a poker room trumpets their latest tournament promotion. Forget about the fact that tournament players are less profitable than cash game players . . . they don’t even offer me what I’m looking for.
And this is not a criticism of Party. No poker room seems to effectively market to my playing style. I get 4 emails a week from RedKings even though I only opened an account there to check out their software and have never even made a deposit. On the other end of the spectrum PokerStars sends me an email every century despite the fact that I used to play there regularly. Obviously there isn’t even consensus on how often you should communicate with players within the industry.
That’s why I’m somewhat perplexed at Ryan’s statements that they’re better at collecting information than land based casinos. Sure they are. They collect tons of data. But can they use it?
Again, I’m not singling out Party in any way. Party collects as much or as little data as any other operator. But – as an industry – are they using it so much more effectively than the brick and mortar casinos?
The way I see it, land based casinos have the problem of not having enough data. But being an online company doesn’t solve those problems. To analyze offline data you have the same data collection limitations as the offline casinos. Online poker sites like Party don’t have super player tracking technologies that can track offline play. They can only track the data that is currently being collected.
I can only infer that Ryan thinks online companies are better at analyzing player data and I’m not entirely sold on that. What exactly would be the proof that online sites are better at analyzing player behavior than brick and mortar casinos like Harrah’s or MGM? Exactly what KPI (Key Performance Indicator) can the online industry point at and claim that it conclusively shows they are better at understanding customers than the brick and mortar casinos?
Remember, there are pit bosses with more years of gaming experience than the entire online gaming industry has even been around.
Though it’s not a direct quote from Ryan and could be Lou trying to summarize a point, the article states: “internet gaming companies can provide casinos with player data and customer tracking technology that’s far better than the technology they use now, and could become the leading edge of casino industry equipment manufacturers if the US legalizes online wagering.”
What does legalization of online wagering have to do with anything? If PartyGaming or any other online gaming operation had sophisticated customer tracking technology they could easily sell it to any casino anywhere in the world. There’s no laws against PartyGaming or any other online casino from selling customer tracking technologies. Neither customer tracking nor data analysis is illegal. If Ryan thinks that the online operators can do it better all he has to do is spin off a subsidiary unit and market their tracking technologies and data analysis. No need to wait for US legalization of online gaming.
Hell, even if the US legal situation was preventing it what’s stopping them from selling it to any of the casinos in Macau (which has more turnover than Las Vegas casinos anyway)? Or why can’t they sell their customer tracking technology to any of the European casinos? I’m really not sure how the US legal situation is even relevant in this discussion.
The portion of Lou’s post that I quoted two paragraphs back is really the key issue in this since it states that “far better than the technology they use now,” which infers that partnering with brick and mortar casinos would be at the offline level. However the only way Ryan’s later comments can be true is if he’s talking about helping brick and mortar casinos establish an online presence.
But that’s only a short-term issue. Just look at Harrah’s hire of former PartyGaming CEO, Mitch Garber. Brick and mortar casinos will be able to hire top talent to help them figure things out. The online gaming industry is still new enough that you can fill a few key roles with experienced people and backfill smart people who can learn as they go. The vast majority of people currently in the industry have no prior gaming experience and, sadly, many gaming employees aren’t even players.
I don’t know if Lou got the story wrong or if Jim is overly optimistic but either way something here doesn’t make much sense.
Interesting stuff. I like them both.
Overall, I am very impressed by most online poker companies. Although it isn’t easy I feel there is a great amount of trust established for players online. This is difficult to portray but after playing many years online I have seen first hand that the bigger poker websites are trustworthy and I feel at ease while playing big games online. I do enjoy the live action at casinos and seeing chips physically pushed towards me but the convenience of playing from home on a computer is hard to compete with.