888 to Pennsylvania Gaming Board: We Support Multiple Skins for Online Gambling Licensees
888 Holdings, and specifically the online gambling operator’s CEO, Itai Freiberger, recently wrote to the Pennsylvania Gaming Control Board to explain why allowing online gaming licensees to use multiple skins is a wise idea.
Those familiar with online gambling might wonder why this is an issue, because of course operators will be able to have more than one skin, right? Not necessarily. While we don’t know what the final regulations will be on that matter, both Parx Casino and Penn National have written to the PGCB to argue for only one skin per licensee. They feel that each site should be branded the same or very similar to the brand of the licensee (thus, Parx Casino would have, say, ParxPoker). They also fear, among other things, that allowing multiple skins/brands would effectively allow the rules regarding the maximum licenses in Pennsylvania to be skirted.
Additionally, Parx and Penn National are afraid that allowing already-established online gaming brands could cannibalize the land-based casino brands that exist in Pennsylvania.
As an online gambling operator, 888 naturally believes that permitting multiple skins is the way to go. For the first half of the two-plus page letter, Freiberger mostly hypes his own company’s qualifications and stresses that he and 888 want strong regulations. On the second page of the letter dated February 15th, he finally gets to the point of skins, continuing to market 888:
….we can also bring to the table a world-renowned and respected brand name. We believe that our proven marketing abilities, along with our trusted international brand name, will be an asset to any local partner seeking to take its business online. Unlike the local property’s reputation, which is now associated only with an offline offering, our brand name (and those of other online operators) comes with a proven track record in the online industry. Allowing our partner to use not only its own brand but ours as well, would allow our partner to benefit from our international brand-recognition and marketing efforts, and will also inform players that they will be enjoying a world-class and popular offering.
Essentially, 888 is saying that hey, if a casino wants to leverage its own brand in the Pennsylvania market, that’s great, but using an established international online gaming brand like – *wink wink* – 888, could give the licensee immediate legitimacy in the market among those already familiar with online gaming.
Freiberger continued, furthering the marketing argument and citing New Jersey as an example, without formally citing New Jersey:
Furthermore, allowing properties to offer their services through multiple brands, will allow them to create a multi-tiered offering, combined of different sites appealing to different target audiences, each with its own “look and feel,” marketing approach, suite of games, bonus and promotion conditions, etc. Think of this as a casino having different rooms for different types of players, each appealing to a different demographic and different consumer preference. Experience from other jurisdictions shows that a multi-brand approach stimulates healthy competition between brands, and ultimately increases overall market size, resulting in larger gaming duty income for licensing jurisdictions.
888 also makes the point that contrary to how Parx and Penn National have framed it, the skins would all be linked to a single license holder, not disparate overseas software providers. All of the marketing expenditures and, in turn, gaming revenues, would be tied to the licensee. And the harder a licensee works on marketing its skins, the greater in theory the market will grow. Obviously, this is 888 trying to position themselves in Pennsylvania, so it’s not like there is nothing self-serving here, but 888 does know a thing or two about online gaming.
888 does directly cite New Jersey late in the letter, addressing Parx and Penn National’s fears of cannibalization. The company says that in New Jersey, “online offerings of both local and non-local brands have had an overall positive impact on the total reported revenue of the land-based licensees.”
It makes the point, while possible trying to puff up the egos of the Pennsylvania casinos, that those casinos have already cemented their brands and reputations and, as such, will have an inherent advantage over newcomers like 888. Essentially, while experienced online poker players may gravitate to a name like 888 or PokerStars, there will be plenty of Pennsylvanians who will want to patronize a Parx-branded site because they trust the brand and have enjoyed the casino.
There is also nothing stopping one of the casinos like Parx, says 888, from partnering with an experienced online gambling provider. 888 assumes all casinos probably will, so all of them will have the same opportunity to take advantage of those brands. And if any casino opts to develop their own software product, they should still be allowed to brand it how they would like.