Yet by April 2015, the Nugget was topping the revenue charts, owning 31 percent of the market and becoming the first operator to generate more than $3 million in casino revenue.
In the latest issue of iGaming Business North America, Landry’s VP of Online Gaming, Thomas Winter, recounts Golden Nugget’s meteoric rise from virtual obscurity to Operator of the Year.
The Golden Nugget’s entry into New Jersey’s iGaming market was marred by technical difficulties, ultimately delaying the official launch of its casino product by several weeks, and its poker offering indefinitely.
It also prompted a strategic decision by management to hold back on marketing until its product was up to snuff.
Ironically, missing out on the first marketing wave gifted the Golden Nugget a significant, and perhaps unanticipated, competitive advantage:
As per Winter:
As our competitors all launched marketing campaigns at the same time, they really struggled to acquire customers cost-effectively, and in most cases the operators had pulled back from their marketing spend already.
That gave us the opportunity to achieve a disproportionately high share of voice and acceptable CPAs.
As a result, when the Golden Nugget did finally decide to ramp up its marketing spend in March/April 2014, it rapidly became the predominant face of online gaming in New Jersey.
What resulted was the operator more than doubling its market share over the next five months (5 percent in April to 11 percent in September).
With the closure of Ultimate Gaming in September 2014, Golden Nugget saw a unique opportunity to promote its brand to former UG customers.
A natural synergy existed between the two products, as they both offered games provided by SHFL and offered a similar pre-paid card cashiering option.
That being said, it appears that whatever leftovers the Golden Nugget acquired from Ultimate’s piddling operation did little to bolster Golden Nugget’s share, as in October 2014, the operator posted the same 11 percent market share as it did the month prior.
Notably absent from the iGBNA piece is any mention of what was arguably the true turning point in the Golden Nugget’s trek from zero to hero.
At the time, Betfair’s online casino was pulling in somewhere in the vicinity of 700k to 800k in gross gaming revenue per month. Its addition pumped up Golden Nugget’s monthly tallies to the tune of over 50 percent, resulting in a market share increase of 11 percent in October to 20 percent in December.
Make no mistake, the Golden Nugget’s addition of the like-minded Betfair to its roster was a shrewd strategic move. Yet, the operator’s rise comes off a bit less dramatic when one considers that a sizable chunk of its market share came by way of acquisition.
Winter provides further evidence that online gambling has a complementary, not cannibalistic, impact on its land-based counterpart:
20 percent of players were already registered at the property. The other 80 percent were totally new and recruited online.
Interesting enough, of the 20 percent of players we got who were already Golden Nugget customers, rather than their play decreasing once they started playing online, their visitation actually increased.
What’s more, Winter reinforces the notion that while online and land-based players are generally from two different stocks, via effective cross-promotional strategies online players can be coerced to supplement their play at a brand’s land-based locale.
To sum up, the launch of the Golden Nugget’s online casino played a contributing role in the physical casino’s 40 percent year-over-year growth – which is something legislators from other states may want to look at when considering the merits of regulating online gambling.