In testimony submitted to a joint Pennsylvania House and Senate hearing, Caesars’ SVP of Government Relations David Satz offered a single number that speaks to the potential of regulated online gambling to support land-based casinos: 80%.
That’s the percentage, according to Satz, of online signups at Caesars’ online casino that were not existing customers in the company’s nationwide Total Rewards database.
The Total Rewards database contained some 45 million customers as of 2015.
The upshot: Despite having arguably the largest nationwide database of gambling customers, and three dominant brands in Atlantic City (Caesars, Harrah’s, and Bally’s), Caesars still finds that only a small fraction of online customers are existing customers.
Regulated online gambling is generating tens of thousands of new customers for Caesars, and tens of thousands more for the other land-based license holders in NJ’s online casino market.
And those new online customers do visit Caesars’ physical properties.
In previous testimony, Caesars’ Michael Cohen noted that 15% of the new customers generated by online signups went on to visit a land-based property.
Of the remaining 20% of online signups who were already in the Total Rewards database, Satz revealed that a full 42% were “inactive customers who re-activated after signing up online.”
Summing up the impact of regulated online gambling in New Jersey for Caesars:
Those customers are producing meaningful revenue: Caesars has managed $71.8 million from online casino and poker activity in New Jersey since launch in late 2013.
The logic behind the cannibalization argument is seemingly straightforward: Casino customers are only going to gamble so much. Introduce online, and customers will simply shift some of their wallet away from land-based and toward online.
So how is Caesars managing to generate so many new customers and so much incremental revenue?
At this stage of the game, the cannibalization argument is nothing more than a straw man trotted out by opponents looking to block online gambling regulation for their own reasons.
The facts, after four years of regulated online gambling involving billions in turnover from hundreds of thousands of customers, are clear: Regulated online gambling helps, not hurts, land-based casinos.