By: Raymond Chan CEO Alphaslot
We believe casino gaming, and more broadly the casino entertainment value, should be appreciated like all other entertainment modes on the internet age today — interactively, securely, globally, and responsibly. However, there is a disconnection between the casino operators and game makers. Some of the New Online Casinos are not having the ability to make games on their own desire, thus limiting the interaction with players directly on the casino floor. At the same time, casino operators invested in expensive buildings to attract customers and created loyalty programs which is costly to maintain, but ultimately customers require good games to play, to stay, and to return again.
The numbers are telling. Thanks for the expensive investment on marketing and the building of new attractions by the casinos, 42.9 million customers visit Las Vegas and 32 million more coming to Macau creating 129 billion revenue for over 2,000 casinos worldwide, but the spending on the casino floors have dropped from 70% in 1990 to less than 35% in recent years.
New technology – the driving force for innovations
Thanks for newly available technology, there are opportunities for casinos to turn things around. Internet of Things (IoT) and Blockchain are two topics which are causing a great deal of hype and excitement, not just in the technology circle but in the wider business world, too. The idea that putting them together could result in theory, a trustful and secure new layer of data processed by “smart” machines in the IoT.
We do have a lot of potential “smart” machines on our casino floors that generates millions of data (and revenue) every second. We are just missing a trustful layer between operators and game makers. Digital assets (in-app avatars and accessories purchase) is now the leading revenue generator from new gamers in eSport and casual games, it is not happening on the casino floors yet because of the disconnection between the game makers and the casino operators as explained earlier.
A blockchain powered general ledger can help the situation by recording the ownership of the digital assets and connecting them to the “smart” gaming machines on the casino floor. The new system will directly bridge casinos and customers for increasing incentive to play on the casino floors, and for a longer time as they do in eSport and modern casual games these days. In principle, it makes a lot of sense and there are several clear advantages to the idea.
Firstly, casino can offer unique digital accessories on blockchain to players that aren’t available for direct sales. The “smart contract” facilities provided by some blockchain networks, such as Ethereum, allow the creation of agreements which will be executed when conditions are met. This is likely to be highly useful when it comes to, for example, authorizing one game to make a reaction to the digital avatars, creating compulsion and additional in-game boosts to enhance the gaming experience for new generation customers.
Secondly, players will be better equipped with more control while playing, allowing in-game strategy and potentially position themselves with higher chances of winning (in selected jurisdictions). These features will engage players for longer time-on-device and drive up revenue from the casino floors.
Thirdly, as the blockchain and IoT infrastructure becomes mature and widely used, the system offers the potential of greatly improving the overall security of the environment. The new layer will also create access for the regulators to promo responsible gambling and AML, for game designer to tap into new sources of information of their players, for casino operators to expand reach on their customers via CRM, for technology companies to innovate in presently unimaginable ways, and for gaming values to grow exponentially.
Every new ecosystem starts with a chicken-and-the-egg problem: the supply won’t join the system unless there’s a demand. And, demand is challenging to prove without real supply. As the gamers data are encrypted and anonymous on the blockchain, casinos are more willing to open the customer gateway with game makers for product improvement. Both casino operators and game makers are now able to offer digital assets for gamers to acquire, making them to stay longer on their games and increase revenue for both game makers and casino operators. These unique characteristics present new business opportunities for the industry to compete with upstarts.
As this ecosystem flourished with newly available technology, efficiencies increased, greater returns achieved, and experiences improved exponentially. It is bringing new business opportunities to innovate and win new fans again together.