Happy Thanksgiving from GGB; Newsletter Returns December 4

Online Gambling Changes Coming for New Jersey

Online gambling operators in New Jersey say the slow start for online gambling may be due to bad marketing plans as much as technical glitches. Changes may be coming. Reports that player value may be declining, as well as a bad report on customer service all combine to demonstrate the industry needs to be fixed.

Some reasons are simple for the slow start to online gambling in New Jersey—technical glitches and complicated money deposits and verification procedures. Not to mention poor customer service and a declining player value.

But some of it may also be just bad marketing.

Boyd Gaming Corp., for example, the state’s online gambling leader through its Borgata Hotel Casino & Spa-related websites, plans to reduce online gambling advertising after reporting a $3.2 million loss from the business in the first quarter.

Meanwhile, 888 Holdings Plc, which operates the US.888.com site, is shifting its advertising focus to slot machines and away from online poker.

“We are absolutely shocked by the slowness of the market,” Brian Mattingley, chief executive officer of 888 told the Newark Star-Ledger.

In April, online gambling took in $11.4 million in the state, down about $500,000 from March. Those figures are much lower than even the most conservative estimates for online gambling when the state went live in November.

“The operators have not seen a positive response to their marketing campaigns,” Mattingley said. “We’ve got to think again, the way we market.”

Meanwhile, the state’s online sites are continuing to struggle as numerous banks and credit card companies refuse to process online gambling transactions. That has led the company’s to seek alternative payment systems—such as e-wallets like Neteller—to serve players.

The site’s sign-up requirements have also discouraged some players used to the freedom of unregulated and illegal sites, officials said. The state continues to lose players to those sites, officials have said.

Also, New Jersey doesn’t let unlicensed third parties participate in the business, Mattingley told the Star-Ledger.  Such websites and other marketing partners provide as much as 30 percent of 888’s customer traffic in Europe, he said.

Still, no one in New jersey is giving up on online gambling.

“It’s not even in its infancy, it’s only just been born,” Mattingley said.

Meanwhile, according to a report by PokerScout, the amount of players in New Jersey’s online poker rooms is falling, but revenues have remained even because player value was rising.

But now, that value—the amount the players make an online poker room—is falling as well.

Poker traffic started to steadily decline in late February, but the value online poker rooms were managing to generate per player increased.

May numbers, however, show that value slowing.

“To date, May is showing a lower player value than the previous month for the first time this year,” the website reported. “If that trend continues, New Jersey will soon feel the full weight of all the traffic that has been lost since January.”

And finally, a poll conducted by Clarion Gaming among New Jersey online gamblers in February has found that the state’s online gambling sites have poor customer satisfaction rates and most respondents said the sites have been slow to address problems.

The poll concludes that the low marks may be an indicator of a high number of players who initially signed up for online sites, but no longer play.

Many gamblers rated their experience as mediocre at the sites and 62 percent felt that operators were too slow in addressing customer problems, according to the poll.

Poll officials said they were surprised by the findings, especially the question dealing with the site’s response to problems, which was rated on a scale of one to 10.

“The operators have all been in the online business via their experienced partners and to see that 88 percent of respondents answered 7 or less out of 10 is shocking’, said Jim Quigley, spokesman for the GiGse Consumer Insights Group formed to conduct the survey told yogonet.com. “The fact that 13 percent of respondents gave it a 1 and only 12 percent gave it 8 or better may be why so many people have signed up to play but now no longer play.”

Earlier surveys have found a significant drop off in players at the sites.

Fred Buro, a marketing specialist and member of the GiGse Consumer Insights Group, said the customer experience is critical for online businesses.

“Consumers in the online space deem ‘poor performance’ of any website or online process unforgivable—and are not shy about demonstrating their frustrations with slow load times, poor content, payments processing problems, and sign-up hurdles, with a simple “click’ away to a competitor. They won’t come back, and they tell all their friends not to visit. Customer service works for you when you average 9 or better, and severely less against you when it is anything less.”

The survey also found that the bad customer satisfaction—exacerbated by geolocation and payment problems—was driving players to unlicensed offshore gambling websites.