The online casino industry is immensely competitive. With a huge number of casinos to choose from, and potentially low or virtually non-existent costs for players to switch from one casino to another, customer acquisition and retention became critical activities for casinos to win market share and extract the most value from the ever growing number of online players. Needless to say, casinos have developed several tricks and tactics to achieve this.
Of course there is the game design itself: imagery, animations, music and sound effects bring a theme to life, drawing the players in, while carefully considered mathematical engines generate the right RTPs and hit frequencies so that players receive the right amount and sizes of wins – often experiencing a lot of near misses – to keep them going. All casinos attempt to line up their lobbies with the best games from the best providers to ensure their players can enjoy the best gambling experiences.
But we go beyond the game experience itself and explore how casinos bundle this within a wider operative approach that attempts to maximise player engagement. Since the odds are ultimately always in the house’s favour, this also means maximising player value extraction in the long term. As we’ll see, some of these methods offer satisfaction and value back to players, while others may be frustrating to them, and sometimes of questionable ethics.
1. Promotions & VIP
Who doesn’t like extra money or free spins? Casinos nowadays offer a plethora of bonuses and promotions: from free spins on new games or slots of the week, to deposit bonuses (whether first, second, or later reloads), cash backs on losses or wagers, leader-board style wagering tournaments, happy hours and Refer-a-Friend type campaigns.
By devising these methods for passing value back to the player, often directly in money terms, casinos motivate players to spend more of their money – typically the more you deposit, wager, or lose, the higher the bonus.
Then there’s the VIP treatment. Casinos segment their players in various ways and VIPs are one of the segments that they pay most attention to. Also called high-rollers, they are players who deposit substantial amounts, say over €10k, and wager frequently and in significant amounts, typically losing up to tens of thousands in a single bad sitting.
Casinos typically aim to have a player base in which about 20% of the players are VIPs, generating about 80% of the revenue. Most casinos have a VIP loyalty system in place which enables players to rank up levels, for example from bronze to platinum or diamond, according to their sustained monthly activity. By identifying and then providing these VIPs with superior service and promotions, casinos manage to extract more value from such players.
Apart from the psychological boost in being addressed as a VIP and being treated with extra respect, these players often enjoy personalised support and communication via an assigned VIP-manager, who may be available to them around the clock. Thus they can bypass the regular customer support and receive faster and better service. They may also enjoy speedier withdrawals. Additionally, they may be awarded special gifts such as a holiday, or invitations to exclusive parties and events. Lastly, VIPs often have access to better bonuses and promotions. Some of the bonuses may only be available for VIPs, while others may be available for all players but then have different terms, for example a lower wagering requirement, for VIPs.
With all the privileges that come with it, the VIP and ranking system is the casinos’ way of increasing their players’ cost of switching to another casino by locking them in and encouraging them to centralise their deposits and wagers within this one casino. Each casino attempts to secure all the value, rather than seeing it spread out among other competitors.
2. Delayed payments
We move on to a less pleasant experience for players – problems or delays in receiving payments. Many online casino players have known this frustration, asking themselves “my money went in fast enough, why isn’t it coming back in the same way?” Well, the reasons are plenty.
First of all there is usually a stringent procedure for withdrawing, involving sending various documents such as proof of identity and address with ID cards, passports and/or utility bills. Sometimes this also involves personal telephone calls.
Additionally, casinos typically implement restrictions on the maximum a player can withdraw: this can be a time limit, for example one withdrawal per week; an amount limit, for example withdrawing only up to €5,000 in one go; or a combination of both, for instance a maximum of one withdrawal of €5,000 per week. For some players this may not be a problem, but high-rollers may be significantly hit by such policies. The non-high-rollers will be impacted by other policies, such as relatively high withdrawal minimums. For instance a casino might allow one to deposit a minimum of €5, but will require a minimum withdrawal of €20. So far it can be argued that these processes are fair to a significant extent, intended to safeguard the casino and/or the player.
However some casinos are known to employ other, more sinister, methods that seem intended solely to extract more value from players, particularly the less disciplined ones. For instance some casinos will let a requested withdrawal stand in a ‘pending’ status, a sort of cooling-off period during which a player can cancel it to reuse that money immediately for playing, thus avoiding any withdrawal and eventual re-deposit fees or charges. After this period the withdrawal will enter a ‘processing’ status during which it is no longer possible to cancel without charges. The casinos hope, of course, that the undisciplined players will change their minds during the pending period.
Perhaps the most unorthodox method is when casinos deliberately delay requested withdrawals, sometimes beyond their own stated terms and conditions. A quick search on compliance and monitoring sites like casinomeister and askgamblers will reveal that such occurrences are far from unheard of.
Some casinos do not stop at just hoping that players cancel their withdrawals and will actually take a further step and use targeted marketing to offer bonuses specifically to players having pending withdrawals – bonuses intended to incite the players to impulsively re-deposit their winnings and potentially lose them in further betting.
Whether such methods are ethical is a highly questionable matter. What the casinos are doing in order to extract maximum value from their players is to lure these players with what are very dangerous propositions, especially to compulsive gamblers: small polls among players have shown that more than 70% of players have reversed a withdrawal at least once.
Gamification has been on the rise during the last few years and can be nowadays seen in all kinds of contexts: from work – enhancing job structuring and recruitment – to health – improving exercise rates and self-management of certain diseases and conditions. No wonder then that gamification has also found its way into online casinos, adding a secondary gaming layer on top of the basic slot or table experience.
In casinos, gamification takes the shape of missions or quests that the players must complete, essentially motivating them to try out different games, play more or for longer, and so on. These objectives are often presented within a narrative. Casino Heroes – one of the pioneers of gamification in casinos – puts players in the shoes of a hero attempting to liberate a kingdom from a terrifying dragon by completing these missions. By completing the tasks and reaching the stated goals, players earn XP and receive virtual badges, medals and so on, which in turn reward them with carefully studied prizes and awards. Often, progression also unlocks hidden slots or features within the casino.
Another aspect of gamification is the social element. Comparing the self to others provides a psychological stimulus to perform better, which in the casino context invariably means to play more. Casinos pit players against each other via leader-boards, where players can see their position as compared to their peers, or else by upgrading player avatars, costumes and items according to player ranking. In Casumo, for instance, each player starts as a novice figure with a white belt and builds up the belt and appearance by playing. This leverages human emotions like envy and embarrassment – no one wants to be seen in starter or non-premium cosmetics!
The objective of gamification and the social interaction is of course clear: extracting more value from players by providing them with a more immersive and enjoyable experience, while increasing their psychological engagement levels with both the product and other users.
4. Data & Algorithms
Casino players can be very different, with significantly varying preferences. This is recognised by casinos on a basic level by categorising slots according to number of reels, volatility, theme, whether the slot has free spins or jackpots, and many other qualities, thus facilitating their players’ navigation through their lobbies, easily browsing slots according to their own tastes. Some go further and allow player customisation within the same game, for instance as Betsoft does with the Good Girl, Bad Girl slot. In this slot players can choose themselves whether to play a higher or lower volatility level of the same game.
But technology has allowed casinos to go further, reaching a point in which their system makes the searches, and sometimes decisions, on the players’ behalf – by analysing data. Big data is another concept that has been on everyone’s mind this decade and now firmly within the online casinos’ arsenal of weapons for maximising player value.
The amount of data casinos capture can be staggering: every game you play, every spin you make, every win and loss, every bonus you participate in and your performance, every login and logout, how long you stay in a game or on the site, which lobby sections you navigate, how you arrive to certain areas, even if you just hover over a game thumbnail, banner, or somewhere else – all this may be captured and stored for eventual analysis. What do casinos do with this data?
At first it was simple things, like the automatic reordering and positioning of all the slots in a lobby according to how popular the slots are, the idea being that prime positions should be reserved to the most played slots since these are most likely to resonate with as many of all casino visitors possible. The mission is now growing: use machine learning models to extract valuable predictive insights and to identify a player’s behaviour patterns, and then, using this information, engage in big data-inspired marketing strategies to maximise revenue from that player by customising its offers both in terms of product and promotions, specifically to that player. Three main approaches to machine learning are clustering, classification and regression.
Clustering analyses instances and players and groups them into similar clusters. This has many uses. For example, it means that if you share behavioural traits with a group of players who like certain slots, a few of which you still haven’t yet tried, the system can identify those specific slots as good recommendations for you. You may be presented with the option of playing these slots, and sometimes even with a targeted promotion like free spins to strengthen the drive towards the behaviour the casino is trying to elicit from you.
Classification is related to segmentation. The system observes a player and categorises the player to one or many of pre-defined classes, for example VIP, or reactivated player. Knowing the kind of player, the casino can more accurately target that player with promotions. For example, if the casino is offering a few free spins to all players trying out a new slot, the offer may change to a percentage cashback on losses for the first week instead if a player is VIP, as VIPs might not appreciate receiving just a few free spins. Similarly if a player hasn’t played in a while and is back, the system might target the player with an interesting reload bonus to encourage another deposit.
Regression looks at relationships between data points and predicts future values. This has various benefits. Again based on player behaviours and preferences it will, for example, predict what the likely player lifetime spend will be, thus aiding in accurately quantifying the amounts that the casino should spend on engaging the player. From players’ behaviour, it knows their favourite slots and may also predict after how many days, weeks or months they are likely to stop playing. This information may be used so that these players will then receive an offer intended to re-hook them precisely at the right time, based on their favourite slots. Alternatively, the system may recognise a trend whereby a particular player deposits around €50 each time, so the next time this player opens the deposit page it adds a percentage to that figure and offers the player a bonus if the deposit is of, say, €60 or more.
The possibilities are really endless when it comes to data mining, machine learning and algorithms. There is a lot more that casinos may be able to achieve using such techniques, and it is definitely one area of interest that will see growth and development in the future of online casino operations. Their objective is to keep learning more about players, and thus be able to nudge them that little bit more towards behaviours intended to extract additional value.
Considering the casinos’ smart application of big data insights, and the other elements discussed above – promotions, VIP treatment, withdrawal management and gamification – it is no wonder that casinos are attracting players like moths to flames!