Build a Market-Ready iGaming Strategy
Avoid leaving your online casino strategy to chance.
- Due to legislative volatility of online gaming, it is difficult for brick-and-mortar casinos to create a well-planned iGaming strategy.
- COVID-19 has accelerated the change in consumer behaviors and preferences with a high inclination toward digital.
- Competitors are on the exact same footing when it comes to iGaming, making it difficult to determine how to differentiate oneself.
Our Advice
Critical Insight
Formulating a successful iGaming roadmap depends highly on the organization’s ability to de-risk both iGaming value chains and the technical architecture while balancing the integration of an omnichannel loyalty experience.
Impact and Result
- Capitalize on iGaming value chains to develop an exhaustive list of user scenarios, which can lend themselves to greenfield engineering.
- Build an iGaming technical architecture based on the organization’s unique set of needs, capabilities, and strategic position within the market.
- Create a unified roadmap that considers initiatives and requirements involving all steps in Info-Tech’s iGaming evolution to prepare the organization for long-term success in the iGaming environment.
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Workshop: Build a Market-Ready iGaming Strategy
Workshops offer an easy way to accelerate your project. If you are unable to do the project yourself, and a Guided Implementation isn't enough, we offer low-cost delivery of our project workshops. We take you through every phase of your project and ensure that you have a roadmap in place to complete your project successfully.
Module 1: Define the iGaming Value
The Purpose
- Gain an understanding of your iGaming context and ecosystem and identify your list of internal and external user scenarios.
Key Benefits Achieved
- Ability to develop an exhaustive list of user scenarios that consider all crucial areas of the business by leveraging iGaming value chains.
Activities
Outputs
Define the iGaming context
- iGaming context defined
Understand your iGaming ecosystem
- Documented iGaming ecosystem factors
Determine internal and external user scenarios
- User scenario inventory
Module 2: Construct a Configurable Technical Architecture
The Purpose
- Gain an understanding of the necessary technological systems for your strategy and weigh iGaming platform decision criteria.
Key Benefits Achieved
- Define your iGaming technical architecture.
- Identify the right iGaming platform sourcing model for your organization.
Activities
Outputs
Review and select an iGaming platform sourcing model
- iGaming platform sourcing model
Module 3: Formulate iGaming Journey Map Requirements
The Purpose
- Design journey maps to empathize with your players and identify opportunities to streamline or enhance existing and new experiences.
Key Benefits Achieved
- Identify a unified view of customer experience.
- Identify gaps in value delivery.
- Improve customer journey.
Activities
Outputs
Identify stakeholder personas
- Internal and external stakeholder personas
Stakeholder journey mapping
- Journey map requirements
Prioritization of requirements
- Prioritized requirements
Module 4: Build a Unified iGaming Roadmap
The Purpose
- Build a player-centric iGaming roadmap.
Key Benefits Achieved
- Keep your team on the same page with key projects, objectives, and timelines.
Activities
Outputs
Bundle requirements into initiatives
- Initiatives categorized by people, process, and technology
Build your roadmap
- iGaming strategy roadmap visual
Build a Market-Ready iGaming Strategy
Avoid leaving your online casino strategy to chance.
EXECUTIVE BRIEF
Analyst Perspective
Unlock organizational value through iGaming
  | The addition of iGaming helps operators digitally transform their business into a platform provider, which has become an important model to remain relevant in an industry with high digital disruption. However, a successful iGaming strategy relies heavily on balancing risk and return. The former is an ideal, yet feasible world; bringing in an omnichannel loyalty experience where operators can increase engagement for new and existing players. The latter is the reality of an operator’s environment; the practicality of increasing return will be based on your organization’s success in identifying and combating iGaming business and technical risks. In this report, we leverage Info-Tech’s Digital Business Strategy to balance risk and return by analyzing iGaming value chains and the technical architecture to identify what technologies to embrace, processes to automate, and requirements to include in an RFP. | |
Larry Fretz | Monica Pagtalunan | |
Executive Summary
Your Challenge | Common Obstacles | Info-Tech’s Approach |
|---|---|---|
You don’t have a well-planned iGaming strategy due to the legislative volatility of online gaming. Regulations differ from brick-and-mortar casinos and require a different approach. Your clients are going digital. COVID-19 has accelerated the change in consumer behaviors and preferences with a high inclination toward digital. You want to differentiate from your competitors. Players view iGaming offerings as similar, making it difficult to determine how to differentiate oneself. | Limited experience in launching iGaming. The presence of iGaming constitutes a small footprint in North America, making its implementation a new and uncertain journey for many casino operators. Knowing how to mitigate risks. An ad hoc approach will produce risk and devalue iGaming processes, which can negatively impact relations with those that have high expectations of the iGaming platform, including players and regulators. | Capitalize on iGaming value chains to develop an exhaustive list of user scenarios, which can lend themselves to greenfield engineering. Build an iGaming technical architecture based on the organization’s unique set of needs, capabilities, and strategic position within the market. Create a unified roadmap that considers initiatives and requirements involving all steps in Info-Tech’s iGaming evolution to prepare the organization for long-term success in the iGaming environment. |
Info-Tech Overarching Insight
Formulating a successful iGaming roadmap depends highly on the organization’s ability to de-risk both iGaming value chains and the technical architecture, while balancing the integration of an omnichannel loyalty experience.
Defining iGaming
iGaming can be defined in two ways
- iGaming as any form of online betting. On one end, iGaming is referred to as any type of online betting as part of a holistic internet gaming portfolio, including sports betting and free-to-play social casino.
- iGaming as internet casino game betting. On the other end, iGaming is referred to as betting that wagers on the future outcome of an internet casino game, similar to brick-and-mortar casinos.
- In the Build A Market-Ready iGaming Strategy blueprint, Info-Tech refers to iGaming as the latter. This report synonymously refers to iGaming in the following ways:
- Internet Gambling
- Pay-to-Play (P2P)
- Real-Money Wagering
- Online Casino
- iCasino
The iGaming Regulatory Landscape
NORTH AMERICA | |
UNITED STATES A slowly growing footprint. The sports betting footprint has grown but the iGaming regulatory scene has unfortunately been stagnant in the US. iGaming is currently approved in six states: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia. | CANADA Gaining iGaming speed. With Ontario’s approved iGaming laws in 2022, the rest of Canada looks to the province as a model. iGaming is currently approved in Ontario, British Columbia, and Manitoba. Saskatchewan will be live in 2022. |
EUROPE | APAC |
North America’s role model. The vast majority of Western Europe already regulates real-money online gambling with their operators and technology providers being considered more experienced.
| An untapped market. Residents in APAC are limited to play-for-fun, offshore casinos, or grey markets due to heavy government sanctions on online gambling. High-value countries for land-based gambling like Australia, Singapore, Malaysia, Philippines, and Thailand are stalled in digital iGaming growth. |
Analysis of iGaming Models – North America
Connecticut | Delaware | Michigan | New Jersey | Pennsylvania | West Virginia | Ontario | |
|---|---|---|---|---|---|---|---|
Launch Date | October 2021 | November 2013 | January 2021 | November 2013 | July 2019 | July 2020 | April 2022 |
Model | Offers iGaming through land-based casinos affiliated with the state’s two tribal nations: Mohegan (Mohegan Gaming & Entertainment) and Mashantucket Pequot (Foxwoods Casino). | The three racinos in the state can operate iGaming under the authority of Delaware Lottery. | Regulators authorized land-based casinos and 12 recognized tribal operators to offer iGaming. By the end of 2021, 14 online casinos were operational. | Online gaming operators must partner with a land-based casino as a condition. By the end of 2021, a total of 30 online casinos were operational. | Land-based operators are authorized to offer iGaming through an affiliated online casino platform. In 2021, a total of 18 online casinos were operational. | Online gaming operators must partner with the state’s casinos. By the end of 2021, a total of five online casinos were operational. | The market is open to private gaming operators who have executed operating agreements with IGO and AGCO. As of April 2022, 13 iGaming operators have registered. |
Permitted Games | Online slots and table games. Live dealer debuted in July 2022. | Online slots, table games, and interstate poker. Although legal, no operator has launched live dealer. | Online slots, table games, and interstate poker. Live dealer was authorized in July 2021. | Online slots, table games, live dealer, and interstate poker. | Online slots and table games. Live dealer debuted in October 2020. | Online slots and table games. Live dealer debuted in June 2022. | Online slots, table games, and live dealer. |
Platform Selection | Selected by operator i.e., Mohegan – FanDuel Foxwoods – DraftKings | Must operate as a joint venture with Scientific Games and 888 Holdings | Selected by operator i.e., Four Winds – Pala Interactive Soaring Eagle – GAN | Selected by operator i.e., Ocean Resort Casino – GAN Tropicana Casino – Light & Wonder | Selected by operator i.e., Wind Creek Casino – Pala Interactive Parx Casino – Playtech | Selected by operator i.e., BetRivers – In-house Caesars – Light & Wonder | Selected by operator i.e., Fallsview Casino – Pala Interactive Fitzdares – FSB |
Taxation Model | 18% | 56% for online slots 20% for table games | Ranges from 20% on revenue less than $4 million, to 28% on revenue exceeding $12 million | 15% gaming tax 2.5% community investment obligation | 54% for online slots 16% for table games | 15% | 20% |
2021 Financial Results | $47.6 million | $10.6 million | $1.1 billion | $1.37 billion | $1.1 billion | $60.9 million | 2022-23 Projection – Combined iGaming and Sports Betting $26 million net income |
Analysis of iGaming Models – Europe
Netherlands | Switzerland | Italy | Sweden | United Kingdom | Germany | |
|---|---|---|---|---|---|---|
Launch Date | October 2021 | July 2019 | 2006 | January 2019 | 2005 | July 2021 |
Model | The market opened with ten operators being issued iGaming licenses. To be eligible for this license, the licensee must have refrained from offering online games of chance to Dutch consumers for two years. | Online gaming operators must partner with a land-based casino as a legal condition. As of March 2021, eight online casinos had launched. | An operator licensed anywhere in the European Economic Area, with a minimum gaming turnover of € 1.5 million in the last two years are authorized to apply and operate an online casino. | To operate in Sweden, an application for a Swedish Online Gaming License must be submitted. | To operate in the UK, operators must apply for a UK gambling operator license. Established and new operators must consider new responsible gaming rules that are going into effect in September 2022. | Online casino operators may apply for a license that is valid for up to five years. |
Permitted Games | Online slots and table games, and live dealer. | Online slots, table games, and live dealer. | Online slots, table games, and live dealer. | Online slots, table games, and live dealer | Online slots, table games, and live dealer. | Online slots and poker. Table games and live dealer are not covered under law. |
Platform Selection | Selected by operator i.e., Holland Casino NV Nederlandse Loterij | Selected by operator i.e., Casino Lugano – Playtech | Selected by operator i.e., Microgame – In-house | Selected by operator i.e., Tipwin Ltd. Gaming Innovation Group | Selected by operator i.e., Fitzdares – FSB | Selected by operator i.e., Kling Automaten GmbH – Pragmatic Solutions |
Taxation Model | 29% | Ranges between 20-80% | 25% | 18% | 21% | 19% |
2021 Financial Results | DKK 2.42 billion | CHF 234 million | €3.46 billion | SEK 16 billion | £4.0 billion GGY | 2021-2022 Projection – €6.4 billion |
The sports betting explosion welcomes the opportunity for iGaming approval
Of the 23 states that have legalized mobile sports betting in the US, 87% were legislatively approved after 2019 (Info-Tech, 2022).
- Sports betting has expanded drastically in North America. In Canada, the federal ban on sports betting was lifted in 2021, with the launch of sports betting in Ontario in 2022. With sports betting gaining traction and expanding drastically in North America, this fuels the innate assumption that iGaming is next.
- Sports betting expansion will fuel iGaming recognition. As regulators begin to see how profitable (and responsible) the online and mobile sports betting space can be, it can encourage the legalization of iGaming. Operators must be at the table with regulators to educate and encourage.
- iGaming is a more profitable addition to a casino operator’s portfolio. Similar in the sense that both iGaming and sports betting are online forms of gambling that incentivize new player segments and digitize the casino’s operations, regulators and operators must understand that iGaming is a more profitable product than sports betting.
iGaming is a more lucrative product….
$3.71 billion
Earned among six iGaming states in the US.
…than sports betting.
$4.33 billion
Earned among 18 mobile sports betting states in the US.
AGA, 2022
Signals of Change
Although iGaming has largely been an underappreciated product offering, there have been signals of change (consumer, competitive, technological, or otherwise) that have indicated a divergence from the status quo and a significant focus toward this online revenue stream.
Vendors have made serious developments in the space | The consumption of gaming content has evolved | Operators have spun out digital brands |
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iGaming: Unleashing your operation’s potential
- Have a strategy in any economic downturn.
- Build a top-class omnichannel operation.
- Meet digital consumer expectations.
- Heighten the experience economy.
COVID-19 has been the prime example of the casino industry's inefficient reactive-over-proactive tendencies. A proactive strategy will prepare for any potentially disastrous economic scenario, such as a recession or pandemic.
Operators can converge their markets – brick and mortar and the online space – so players can witness a truly frictionless experience through all channels. The seamlessness that consumers experience in other industries should be considered and propelled into the casino industry.
It’s not “business as usual” anymore. We are in the "new normal" and this era involves far more digital technology. Although casinos are seeing pre-pandemic revenue numbers, it doesn't mean you shouldn't make any changes to current operations. Start considering the digital consumer lifestyle where the ability to provide a product online is no longer a preference, it's an expectation.
Operators that implement iGaming have provided an additional experiential product for consumers to become accustomed to without the need for a physical location or the need to spend on materialistic goods.
Transform your operations by becoming a platform provider
Penn National Gaming Example – Pivot from an asset-heavy to a platform-scale model
Asset Heavy to Asset Light
Real Estate Investment Trusts (REITs) have become a mechanism for casinos to unload assets and focus solely on operations.
Digital Acquisition & Spin Outs
With iGaming and sports betting viewed as major expansion opportunities, operators look to acquire digital assets and/or build digital units as tools to focus and succeed in the online market.
Omnichannel Convergence
The combination of being asset light and digitally present has allowed operators to become platform providers by blending operations between digital platforms and land-based casinos while leveraging a flexible, structured, and scalable brand-focused foundation.
iGaming enables a Casino-as-a-Platform strategy
Enable a platform model by bringing together two overarching platform strategies: Player Journey Ecosystem and Digital Experience Platform(s)
The player journey ecosystem is supported by the digital experience platforms which are various lines of business and revenue streams used to build an experience economy. Each digital experience platform is used to curate content, deliver seamless interactions, and orchestrate value across the ecosystems. A combination of these digital experience platforms is the glue that ties the player journey ecosystem together from online to on-property.
The Future of iGaming
Once your strategy has been implemented, consider iGaming’s trends and its place on the experience roadmap in the coming years
Online Crypto Casino Rolling the dice on digital assets Online crypto and NFT casinos have disrupted this space through decentralized markets for some time. Cryptocurrency and NFTs provide the opportunity to enable the play-to-earn model, a modern approach that can be leveraged to incentivize play. However, its volatility and place in a regulated market has operators questioning when adoption can occur. | Metaverse iGaming Experience Appealing to younger demographics The pandemic heightened the millennial-to-Gen-Z cultural transition, and the industry is exploring what investments will need to be made in the world of virtual reality. A more realistic initiative than crypto adoption, operators will still have their work cut out for them with the need to create a metaverse from scratch. The challenge will be establishing KYC, AML, and RG regulations in a virtual world. |
Visit Info-Tech’s Future of Casino-as-a-Platform Trends Report
Info-Tech Insight
Walk before you run. The future of iGaming is promising; however, operators shouldn’t get too ahead of themselves by becoming concerned over the speed of implementation for new and emerging technologies. As a greenfield project, your organization will need to focus on needs before wants.
Follow Info-Tech’s Recommended iGaming Evolution Ladder
| 1.Implement “Play to Fun” | 2. Transition to “Pay to Play” for Current Player Base | 3. Expand “Pay to Play” for New Players | 4. Extend iGaming to Other Legalized Open Markets | 5.Engage in “Interstate Compacts” |
iGaming Legalized Within State | ||||
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Omnichannel loyalty is iGaming’s key differentiator
Inducements and content bring attention to an online casino but omnichannel loyalty retains the players and builds a branded experience.
Converging online and on-property
- Build a frictionless experience. To fully capitalize on land-based and online wagering value, casino operators need to bridge the two and create an all-encompassing experience for players.
- Choose omnichannel over multichannel. In an omnichannel strategy, players can play games, receive promotions, accrue and redeem, and transact on the casino floor and online seamlessly with a connected experience.
Transforming relationships with players
- iGaming is part of a larger loyalty strategy. A sole iGaming focus on transaction-based loyalty will fail to address the emotional side that provides engagement and a strong player experience.
- Avoid a traditional loyalty program to build iGaming success. Your digital loyalty approach should be designed to be relationship-driven with the objective of providing behavioral and attitudinal loyalty.
Five Major Omnichannel Challenges
- Ineffective content strategy
- Improper utilization of user data
- Isolated analytics measurement
- No action on new findings
- Ineffective marketing strategy
Five Major Loyalty Challenges
- Focus on transactional marketing
- Lacks cross-channel redemption
- Ignores technological loyalty progress
- Limited analysis of guest behaviors
- Absent centralized loyalty program across lines of businesses
Market-ready does not mean rush-to-launch
Regardless of whether your organization decided to adopt early or late, any casino that takes the time to plan for an iGaming strategy will increase benefits and decrease risks.
Pros | Cons | |
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Early Adoption |
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Delayed Adoption |
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“If we’re launching off-cycle, we don’t have to compete in terms of the cacophony of voices and media spend out there.”
Jon Kaplowitz, Head of Penn Interactive
SBC Leaders, March 2022.
An ad hoc approach to iGaming strategy will miss key risks and considerations
- iGaming is not a turnkey operation. The addition of an iGaming product requires time and effort for project development, vendor selection, and implementation. Your iGaming strategy will impact the way you operate and whether further (major and unnecessary) adjustments are needed to resolve initial strategic mistakes.
- Revenue is a given, trust is rewarded. Although iGaming is viewed as a “cash cow,” your strategy will impact how your stakeholders will view the organization for years to come. An operator must consider regulatory requirements or risk fines and distrust from both legislators and players.
- When risks are glossed over, the brand image is impacted. Consider the following real-life cases of fines:
- BetMGM Canada has been served Notice of Monetary Penalties totaling $48,000 for their alleged failure to comply with advertising and inducement standards.
- PointsBet Canada has been served Notice of Monetary Penalties totaling $30,000 for their alleged failure to comply with advertising and inducement standards.
- Casumo, a Maltese operator, has been fined $8.2 million for AML and social responsibility failings that include allowing a player to lose $1.1 million without a responsible gambling interaction.
- Intouch Games, a UK iGaming tech provider, has been fined $3.4 million for social responsibility failings.
The Financial Dimension of iGaming
Benefits highly outweigh the cost but utilize the development of a well-prepared iGaming strategy to establish ways to reduce risks on both a revenue and cost side, resulting in increased profitability.
The Revenue of iGaming
- New source of revenue
- Increased land-based casino revenue
- New player acquisition and engagement opportunity
- Improved brand engagement
- Improved player database loyalty
The Cost of iGaming
- Infrastructure
- iGaming licensing
- Maintenance and support
- Regulatory compliance difficulty with heightened KYC and AML obligations
- Customer acquisition through marketing and advertisement
- Promotions & Incentives
- Taxation
- Liability
Info-Tech’s approach to iGaming strategy
A balanced path to de-risk and thrive in online gaming operations
| 1. Define the iGaming value in your operations | 2. Construct a configurable technical architecture | ||
 | Understand how your organization will create value with iGaming by leveraging value chains to identify user scenarios for digital enablement and transformation. |  | Leverage Info-Tech’s iGaming technical architecture to proactively analyze various systems and avoid common operator challenges when implementing and operating iGaming technology. |
| 3. Formulate iGaming journey map requirements | 4. Build a unified iGaming roadmap | ||
 | Design journey maps for your user scenarios to empathize with your stakeholders and identify requirements to streamline or enhance this new experience. |  | Create a balanced roadmap that improves digital maturity and prepares your iGaming initiative for long-term success in a digital economy. |
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Guided Implementation 1: Define the iGaming value in your operations
- Call 1: Discuss business context and customize your iGaming value chains.
- Call 2: Assess iGaming context and ecosystem.
- Call 3: Determine internal and external scenarios.
Guided Implementation 2: Construct a configurable technical architecture
- Call 1: Discuss your iGaming technical architecture.
- Call 2: Determine your iGaming platform sourcing model.
Guided Implementation 3: Formulate iGaming journey map requirements
- Call 1: Identify stakeholder personas and scenarios.
- Call 2: Complete journey mapping exercise.
Guided Implementation 4: Build a unified iGaming roadmap
- Call 1: Discuss initiative generation and inputs into roadmap.
- Call 2: Summarize results and plan next steps.
Contributors
- Eric Bowers, VP of Architecture & Innovation, Boyd Gaming
- Jared Mayberry, SVP of Customer Experience, Aristocrat Technologies
- Mark Rosa, Chief Information Officer, Mohegan Gaming & Entertainment
- Matej Filipančič, Head of Turnkey Solutions, Oryx Gaming
- Rich Roberts, President, Mohegan Digital
- Thomas Castleberry, VP of CSX Strategic Initiatives, Aristocrat Technologies
- 2 Anonymous Contributors