Interactive & igaming Advisory Group. National Survey of Internet Users and Gaming Behavior

Transcription

1 Interactive & igaming Advisory Group National Survey of Internet Users and Gaming Behavior

2 Foreword Proposals by New York and Illinois to sell lottery tickets on the internet to forced the Department of Justice to formally examine the Federal Wire Act and determine whether these proposals would be in violation of said act. In a memo released in December 2011, the Department of Justice found that interstate transmissions of wire communications that do not relate to a sporting event or contest fall outside the reach of the Wire Act. More specifically, because the proposed New York and Illinois lottery proposals do not involve wagering on sporting events or contests, the Wire Act does not prohibit them. These findings opened up questions as to whether other online gambling activities might be up for consideration in the near future. In light of these findings, and as a follow up to our 2010 igaming study on the potential impacts on Bricks and mortar casino companies, The Innovation Group conducted a survey in February 2012 to further our understanding of the US internet gaming market, as well as to elaborate upon the potential connection between online gaming, both for real money and free play, and bricks and mortar casinos. Free play is currently legal and is being deployed by several major casino operators and tribes throughout the United States. Importantly, since the free play site would be expected to be the foundation for a pay-for-play site if/when legalization occurs, key considerations for longterm utilization were tested. This study sought to understand the significance and relevance of the use of free play games, and to explore trends in the types and style of games, communications, as well as any operations and marketing/advertising links or components that are most attractive and provide the greatest opportunity for the application of player development tools to potentially drive incremental casino property visitation. As we look forward to the coming year the focus has decisively moved from the federal level to the statehouses. Iowa, Florida, Nevada, Mississippi and California all have recently been considering some form of legislation as a result of the DOJ decision. Other states are likely to follow. Should these be successful in the immediate term, we would expect that the pressure for some federal action will grow. This pressure is unlikely, in our opinion, to result in nationwide legalization as we believe that online gaming will, as has been the case for brick and mortar gaming, be an issue that the individual states will decide. Rather, we see the federal role as one of coordination and the setting of minimum standards within which states that legalize online gaming will legislate and operate. This we see as beneficial in reducing the potential for the generation of contradictory regulations, standards and controls. Depending on the results of the November elections this is an issue the federal government could take up in This state-by-state approach will benefit Indian Tribes and regional operators who would be unable to compete on a national basis with large multi-state brand name casinos. Another issue that is of concern is the issue of liquidity which applies primarily to poker and to bingo. For small states this could be a significant problem. However, the DOJ decision also provides some basis for optimism in this regard as some interpretations of the opinion indicate that as long as two states approve of the form of gambling in question (as long as it is not sports betting) then wagering by residents of one state can occur at sites in another. If this holds true then there is The Innovation Group National Survey of Internet Users and Gaming Behavior Page I

3 the potential for multi-state compacts to provide the liquidity needed for successful poker and bingo operations. This in turn raises other issues such as how such transactions will be tracked and taxed. These issues await resolution. One of the greatest challenges facing the industry, other than ensuring some consistency among state regulations, is the issue of taxation. The igaming business model is radically different from the business model of brick and mortar casinos. The existing states bills have tax rates on GGR ranging from a low of -6% in Mississippi to a high of 2-2 in Iowa. However, as proliferation of igaming occurs in the next few years some of the states that currently tax brick and mortar casinos at a high level will require diligent effort to dissuade them from taxing igaming at similar levels. This is not an easy argument to make. igaming is not likely to generate the huge sums of tax revenue that brick and mortar casinos have done, nor is it likely to generate comparable numbers of jobs or require anywhere near the same level of capital investment. The industry will need to make a concerted effort over the next year to explain the igaming business model and how it differs from brick and mortar casinos. So how can legislators be convinced that igaming is something that merits consideration and appropriate taxation? We believe that while the tax revenue and jobs remain important benefits of igaming that the key factors for legislators will be consumer protection, recovery of dollars going offshore, and the shoring up of existing brick and mortar casinos by limiting igaming licenses to already licensed gaming establishments. As to the latter point, most of the states mentioned earlier seem to be heading in that direction. It should be noted that such an approach is likely to result in more rapid implementation since the regulatory structures and licensing processes are already largely in place in each state we believe will be the year that igaming starts to take off in the US. We see further M&A activity as US gaming manufactures and European igaming entities continue to seek to better position them to take advantage of liberalization. In addition, we expect that there will be exponential growth in the number of free play sites associated with brick and mortar casinos as they position themselves to take advantage of igaming legalization in their states once it occurs. If you are an operator of a brick and mortar casino in the US and have been sitting on the sidelines observing developments and wondering what the impact would be on you, then 2012 is the year to act. igaming is coming and the pace of development will likely accelerate, so now is the time to prepare and position your property. As in many aspects of life and business, the early movers will have the advantage. The Innovation Group, as part of our efforts to analyze what we see as a growth segment in the casino industry, has conducted a survey of 900 gamers across U.S. in looking for answers to the following questions: Who are internet gamers? What type of games do they play online i.e. free games, games for points and prizes, real money games? What games do they play online? What proportion plays casino type games online? The Innovation Group National Survey of Internet Users and Gaming Behavior Page II

4 How do they compare to bricks and mortar gamers, and what is the level of crossover? How would legalization of real money gaming affect bricks and mortar casino play? Importance of web site association with landbased casino or state lotteries. Typical demographics. Frequency of wagering-number of sessions. Amount wagered by session by game type. Importance of free play games, impact on landbased casino visitation. The characteristics of a web site that players feel important. Characteristics important in selecting a real money gaming web site. Offers that would induce people to visit a land base casino related website and in turn to visit the associated landbased casino. How do people find an online gaming site now? Devices used for online gaming. This represents the second in a series of primary research surveys related to online gaming conducted by The Innovation Group. In this effort we have focused more on the impact of both free play and real money gaming on landbased gaming, the importance of association of a web site with various gaming entities, and the specifics of inducements to play at both a casino web site and to induce play from a web site to a landbased casino. In addition we asked questions relating to the impact on lotteries and devices used. A key area of focus this year has been to acknowledge and assess the extent that overlaps occur between landbased gaming, free play and real money online gaming. It is our suggestion that this data should be used in conjunction with the previous survey data from our 2010 study. We are happy to share the results with you and hope you find the information helpful. Note that the data included here is at a summary level. The options for additional, more detailed analysis by region or by specific characteristics are myriad. If you have any additional questions please feel free to contact either Steve Rittvo or Paul Girvan. Their contact information is as follows: Steve Rittvo 231 Midland Avenue, Suite 204 Basalt, Co srittvo@theinnovationgroup.com Paul Girvan 400 North Peters Street, Suite 206 New Orleans, LA pgirvan@theinnovationgroup.com The Innovation Group National Survey of Internet Users and Gaming Behavior Page III

5 Contents Foreword... I Overview of Major Findings and Their Implications... 1 Introduction... 4 Type of Gaming and Overlaps Among Player Types... 6 Summary of Overall Survey Results... 9 Demographics... 9 Gaming Venue Played At Types of Online Games Played Interest in Free Play Online Casino Games Landbased Casino Association for Free Play Gaming Sites Landbased Casino Association for Real Money Gaming Sites What Devices Have You Used to Play Online Games Online Casino & High Frequency Players Demographics Age Income Landbased Casino Association for Free Play Gaming Sites Landbased Casino Association for Real Money Gaming Sites Characteristics of Play Duration of Online Gaming Session Frequency of Play for Real Money Online Real Money Per Session Budget Real Money Online Games Played Lottery Impacts What Devices Have You Used to Play Online Games Online Casino Gamers-Focus on Age Game Types Interest in Online Free Play Casino Games Real Money Games Landbased Casino Visitation Landbased Visitation Changes as a Result of a Free Play Site Devices Used Demographics Annual Gaming Budgets The Innovation Group National Survey of Internet Users and Gaming Behavior Page i

6 Demographics Ethnicity Gender Interest in Free Play Interest in Free Play Game Types Free Play Games Played in Last 12 Months Frequency of Play on Free Play Sites Last 12 Months Duration of Play Real Money Games Played Last 12 Months Landbased Casino Visitation in Last 12 Months Real Money/Free Play Gaming Site and Landbased Association Online Casino Players - Slots Versus Table Players Native American Casino Patrons and Online Casinos Social Gamers Frequency of Online Casino Games The Innovation Group Contact Information The Innovation Group National Survey of Internet Users and Gaming Behavior Page ii

7 Overview of Major Findings and Their Implications The analysis of the data from the survey elicited a variety of major conclusion or themes which themselves have implications for the development of internet gaming in the US. The most significant finding of this analysis is that there is significant overlap between free play, online real money gaming and landbased gamers. For example we know that a certain proportion of landbased gamers already play online either in the form of free play or real money gaming. We also know that a significant number of real money online gamers also visit landbased casinos. It is therefore imperative to understand these relationships to be able to predict the effect that legalization of online gaming would have and to develop a strategy to profit from it. Many of a casino s existing customers are already online playing either free play or real money games. By ignoring this fact, operators are failing to take advantage of all the benefits that could accrue from a well thought out online strategy designed to not only generate revenue in and of itself, but to drive more visitation and revenue to the landbased casino. Even where real money gaming is not legal, operators should be determining a strategy whereby free play sites can be implemented to support their landbased operation. It should be noted that free play does not necessarily imply zero revenue. Free play online sites can be monetized through the purchase of chips or credits and advertising can bring additional revenue sources. By acting quickly to develop a free play site the operator not only gains the platform but also the knowledge base and an online database which will better position the operator for the possible eventual legalization of real money online gaming. The same argument applies equally for real money gaming. Confirming last year s data, landbased gamers are noticeably older than with those that play real money games or free play games online. However, this year s analysis also indicates that those that visit landbased casinos but who also play casino games online, whether for free play or real money, are also younger than the overall landbased gamer. This suggests that igaming - whether for free play or for real money - offers the potential to reach a younger audience which is typically wealthier than the average landbased gamer. With an aging clientele at existing landbased casinos, igaming offers the opportunity to infuse the casino with a younger clientele. Operators should begin to consider what changes in its landbased offerings should be made to address this younger demographic and to cement these potential patrons as they are induced into the casino via online gaming web sites. Some operators remain wary of the impact of real money gaming, and some also harbor doubts about the efficacy of free play games. However, as this data shows, igaming - whether for real money or as a free play site - can help brick and mortar casinos expand their markets. Many existing landbased casino players are already online playing games for real money or otherwise, and the data shows that igaming offers casinos an avenue to encourage more visitation from existing players and to attract more players who are younger and generally wealthier than their existing customer base. By linking a landbased casino and the typical benefits it can offer to players (such as free or discounted hotel rooms, concert tickets, and free play points) to a gaming web site, online gamers can be enticed to visit or increase visitation to the landbased casino. Even those that are already visiting a The Innovation Group National Survey of Internet Users and Gaming Behavior Page 1

8 landbased casino report that their visitation frequency would increase if they could play online for points or complimentaries, or if their real money online play could be linked to the existing casino s player rewards program in a seamless fashion. This implies that operators looking to develop online casino web sites should view its customers through the lens of a single wallet, whether it is online or offline, and that the online and offline databases and rewards should be integrated to encourage such cross pollination. In a broader sense this also implies that fears of online gaming cannibalizing landbased casinos are largely unjustified and that the upsides of free play sites and real money sites are significant from the perspective of landbased casino revenues. Online offerings also offer potential for a new revenue stream, whether it be from the monetization (i.e. purchasing of chips) of free play sites or real money casino sites. Those who currently play casino games online for free represent a potentially significant market for landbased casinos. Free play casino gamers are comparatively underrepresented at landbased casino. Therefore a free play website associated with a landbased casino coupled with a well-defined reward and inducement strategy could result in significant new visitation from this segment. In developing an online strategy, operators should pay close attention to their marketing and players club programs to ensure that these are maximizing potential play from this segment. In this digital age, casinos must move to revamp and improve upon their digital marketing efforts. The data shows that there is substantial interest in playing casino games on free play sites, and that an association with a landbased casino would strongly influence their choice of which site to play on. For this reason and those cited above operators should be making haste to develop a free play site linked to their landbased casino. Many progressive operators are already moving aggressively in that direction; those that are not may be ceding an advantage to their competitors. In relation to real money and free play sites, the landbased casino has a number of singular advantages. First, it has a physical location which can be used to induce play on the web sites (and vice-versa). Second, it has a database which can be used to seed play on its real money web site. In fact the data shows that landbased customers wager significantly more than other groups when they play online. Third, it is a physical facility that is not going to disappear in the Ethernet as some online casinos have been known to do. Fourth, landbased casinos are highly regulated and have a level of trust associated with them. Finally, because of their highly regulated nature there is already in place a process to address complaints and disagreements through the regulating agency if disagreements arise. All these factors explain why the association with a landbased casino has so strong an appeal to those surveyed in this effort. As to game types, it is clear that slots, poker and Blackjack dominate online. The data also suggests that both slot and table players tend to play a wider variety of games online lending credence to the concept that online gaming can be an incubator for table play at landbased casinos. This is true especially for those who are unfamiliar with the rules and strategies for table games and who do not want to be embarrassed in a live environment as they learn the The Innovation Group National Survey of Internet Users and Gaming Behavior Page 2

9 games. Online they develop their skills and knowledge of the game in a low risk setting, and can feel confident in their abilities when they visit the landbased casino. The role of social media in gaming has been widely debated. The data shows that social media sites have a role to play whether it is in actually offering casino games or as a conduit to finding other sites to play on. The research also indicates that this is especially true for the younger demographic. Operators should consider social media sites in their overall igaming strategy either in the role of a network or as an affiliate. The most significant finding in our survey related to Native American casinos was that responses to the questions varied little from other landbased casinos. In other words Native American casinos and the behaviors of their customers is no different in relation to either their landbased or online play, or to the value of association of a Native American casino with either a free play or real money gaming web site, than any other landbased casino. It can be concluded that a Native American casino developing a real money web site would not be at a competitive disadvantage to other landbased casinos. In many states Native Americans are the only providers of landbased gaming. In the online realm Native American casinos in states such as these will be primarily competing among themselves and potentially with the State Lottery. Ironically, as states look to legalization of online gaming the interests of Tribes and Lottery s may coalesce to pass legislation, while thereafter each would compete with the other. As it relates to web site design, or things people want to see in a web site, there are a number of must haves, these generally include safety and security, ease of navigation, ease of transaction processing, trust and privacy. These are integrity and ease of use issues that appear to translate across all levels of players. There is another set of should haves which includes such factors as variety of games, favorite games, bonuses and promotions. These are followed by other features such as technical and visual factors, avatars, 3D, chat rooms and other similar features. All sites are expected to have the must haves ; the differentiating factors between web sites will be the should haves and how well these are executed along with the other technical and visual features of the web site that will make it attractive, interesting, rewarding, exciting and pleasant to play on. The higher the frequency of a online gamer of any group, the greater the likelihood that they can be induced to visit an associated landbased casino. There has been a startling growth in the use of tablets and cell phones for online gaming. Operators entering the online space should ensure that they also have a strategy for mobile gaming though support and development of appropriate apps. On the lottery side there is no doubt that online games will increase lottery sales, however the data suggests that this will come at a price with existing brick and mortar retailers seeing sales declines. This is likely to become an issue of some importance as more state lotteries go online, suggesting there will need for some mechanism that induces the support of existing lottery retailers. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 3

10 Introduction This survey was conducted in February 2012 over a one week period. The survey panel was internet-based. Respondents were first screened for age (>21 years old) and then asked if they had participated in a variety of forms of gaming in the last 12 months. To facilitate the analysis, the survey was broken down into the following groups: Played at Landbased Casinos Played Online For Real Money Played Online for Free This category include ALL free online gaming, ALL Social Media Games where players may have paid for online currency, and ALL games where you can earn points for prizes If a respondent played both at a landbased casino and online, their responses were captured in both categories. This was done deliberately to assess more closely the normative patterns of all gamers in each category and not just those that participate in these sectors predominantly or entirely. It was also done to obtain a clearer picture of the variety of gaming activities respondents participate in. The reader can then compare and contrast these results with those from our 2010 analysis where the defined groups were based on exclusivity and/or predominance of play. In addition subsequent sections of this report redefine these categories based upon higher than average participation which, while retaining overlaps among categories (although to a reduced extent) allowing differences between groups to become better defined, therefore allowing comparison to the overall responses. To accomplish this, respondents who indicated that they had not participated in gaming in the last 12 months were terminated. A total of 900 valid surveys were obtained. Approximately 300 responses were obtained for each category of player (online free play, landbased, and online for real money). In each case, individuals in a group also participated in other forms of gaming and therefore the percentages in the following charts do not always add up to 100%. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 4

11 Which of the Following Types of Gaming Sites Have You Visited During the Last Twelve Months? Landbased Free Play Real Money Native American Casino 1 32% 42% Cruise Ship Casino % Riverboat Casino 10% 2 2 A Race Track With Gaming Machines 1 26% 3 Commercial Landbased Casino 30% 4 62% Other Online Games Such As Social Media Games Including Face 5 76% 92% Online Casino % Lottery Outlet 48% 6 68% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% From this intial chart some interesting facts emege on how each group behaves online and at landbased gaming venues. For example: In all cases, with the exception of social media games, those that have been to a landbased casino or played online for real money are represented in greater proportions at all the various gaming outlets than are those that play free play games. Those that play real money games online and/or go to landbased casinos are more likely to visit lottery retailers than those that play free play games. Significant proportions of those who play online for real money also go to landbased casinos. Free play gamers are underepresented in all landbased gaming venues and could represent a significant potential upside if free play casino sites are introduced. 3 of those who go to landbased casinos also play online casino games. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 5

12 78% of the online real money players report playing at an online casino, compared to 3 of those who have played at a landbased casino and 3 who have played on a free play game site. The incidences of play at landbased for free play and real money gamers declines as the level of sophistication of the landbased casino declines. This echos a similar finding from our previous nationwide survey. An August 2011 survey from the Pew Internet and American Life project found that 78% of all adults over the age of 18 use the internet (men=80% and women=76%). Internet usage varies among demographics such as ethnicity, age and education. White non-hispanics use the internet more so than Black Non-Hispanic and Hispanics (English- and Spanish- speaking) 80% compared to 7 and 68% respectively. Not surprisingly, internet use is inversely correlated with age (as age increases, internet usage decreases) and directly correlated to higher education. For the purposes of our analysis, we have taken the 68% of American adults that have broadband service available at home as our key adjustment factor to establish incidence rates Using this data and those that were screened out of our survey as not having gambled in the last 12 months, we estimate that the incidence of internet games for money in the U.S. is approximately 7.2%. The incidence rate for real money casino gamers was 5.. The incidence of those that play free online games is 18.8% and those that go to landbased casinos was 19.. We believe that since this was an internet based survey that there is inherent bias which skews the incidence rate for internet play higher and that for landbased lower than it would otherwise be in the general population. We used the landbased prevalence rate determined by the survey conducted by AGA in their 2011 State of the States publication as basis for this correction with the subsequent estimated incidence rates shown in the final column of the table below. Raw Survey Incidence Survey Incidence Rates Adjusted Incidence for Home Broadband Access Incidence Corrected for Home Broadband Access and Estimated Survey Bias Real Money % 5.6% Real Money Casino Games Free Online Games % 14.6% Landbased % Type of Gaming and Overlaps Among Player Types Because respondents were able to select all types of gaming that they had participated in, there is significant crossover between the three groups. Quotas of at least 300 completes from each group were set to ensure a statistically reliable cross tabulation. As noted above there is a degree of overlap among the various groups of respondents as follows: The Innovation Group National Survey of Internet Users and Gaming Behavior Page 6

13 Count % of Total Sample Both Real Money & Free Play Casino Gamers Real Money Casino Gamers % Free Play Casino Gamers % No Casino Games Online Total % This data suggests that the greatest opportunity lies in the conversion of free play only to real money gamers either online and/or at landbased casinos. The following chart shows the type of games played by population. It is notable that 36% of landbased gamers and 22% of free play gamers also play real money games. Real money gamers and landbased gamers tend to be more active than free play gamers as it relates to games where you can earn points for prizes and on social media games. Which of the Following Types of Games Do You Play Online? Landbased Free Play Real Money Games Where You Can Earn Points for Prizes Social Media Games 48% 42% 5 Free Games Real Money Games 22% 36% 100% 0% 20% 40% 60% 80% 100% 120% Controlling for casino games only we created the following table. The free play population overlaps with real money casino gamers with approximately 1 of the free play sample also playing casino games for real money. For the landbased sample 22% played casino games for real money online, and 50% played free casino games. Of the real money population 87. played casino games for real money and approximately 8 also played free casino games. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 7

14 Casino Game Players Free Play Land Based Real Money Free Casino Games % 81.2 Real Money Casino Games % 87.8 The Innovation Group National Survey of Internet Users and Gaming Behavior Page 8

15 Summary of Overall Survey Results This section covers the entire set of survey respondents and includes both casino and non-casino games. The data is broken out into three categories which include: Landbased: Includes any respondent that has been to a landbased casino in the last 12 months Free Play: Includes any respondent that has been to a free play site in the last 12 months Real Money: Includes any respondent that has been to a real money game site in the last 12 months Since there is significant overlap between these groups, we have limited the variables analyzed and contrast these results in subsequent sections to focus on higher frequency players and casino gamers in each category to provide a more meaningful analysis. By doing this we were able to draw out the differences between categories such that the results were more representative of core players in each. This however does not guarantee the elimination of overlaps as, for example, it is highly likely that that a frequent real money online gambler is also a high frequency landbased gambler. Demographics The following are some key demographic variables for the entire set of survey responses. Those that have been to landbased casino tend to be slightly older than those that have visited a free play site. Real money gamers showed a significant skew towards younger age groups. 35.0% Age Distribution 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Real Money Free Play Land Based The Innovation Group National Survey of Internet Users and Gaming Behavior Page 9

16 In the overall data set those that have been to a landbased casino tended to have the highest incomes followed by those that have been to a real money gaming site. Those that have been to a free play site correspond with the lowest income level. Annual Household Income % 20% % 16% 16% 1 10% 12% 8% Real Money Free Play Land Based 0% Under $20,000 a year $20,000-39,999 a year $40,000-59,999 a year $60,000-79,999 a year $80,000-99,999 a year $100, ,999 a year $125, ,999 a year $150,000 a year or more Gaming Venue Played At Those who play online for real money are more likely to be involved with other forms of online gaming, including sites to play for points as well as social media sites that require the purchase of credits etc. 36% of landbased gamers also played real money games online, while 22% of free play online gamers also played real money games. Both those who had been to a landbased and real money site were more likely to have played the lottery than those who had been to a free play site. Those who played at free play sites were less likely to have visited landbased casinos but were more likely to have played games on social media web sites. Social media websites were also a popular game platform for those who had played at a landbased casino and those who played real money games online. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 10

17 Which of the Following Types of Games Do You Play Online? Landbased Free Play Real Money Games where you can earn points for prizes Social Media Games 48% 42% 5 Free Games Real Money Games 22% 36% 100% 0% 20% 40% 60% 80% 100% 120% Types of Online Games Played Online casino games are the most popular followed by card games such as Solitaire and Rummy. Third most popular online games are puzzle games followed by social media games such as Farmville. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 11

18 What Type of Games Do You Play Online? Landbased Free Play Real Money Online Social Media Games - Such As Zyngas Farmville, Mafia 48% 4 5 Online Platform Games - Where You Run and Jump Such As Super Online Arcade Games - Such As Asteroids, Pac Man, Etc % Online Multi Player Games - Such As World of Warcraft 1 26% 3 Online Casino Style Games - Poker, Blackjack, Roulette, Slot 5 80% 82% Online Card Games - Such As Solitare, Rummy, Etc. Online Puzzle Games - Such As Mahjong Online Shooting Games - Such As War Games Or Hunting Games Online Sports Games - Such As Golf, Football, Racing Online Strategy Games - Simulated Environment Where the Game 26% 18% 38% 2 18% % 68% % 10% 20% 30% 40% 50% 60% 70% 80% 90% Those who play for real money are more active across all game types than either the landbased or free play groups. Online casino style games were the most popular particularly with those who had been to a landbased casino or real money website. Interest in Free Play Online Casino Games We asked respondents if they would be interested in playing free online casino games. The response was overwhelmingly positive for those who had visited a landbased casino (76%) and those who had been to real money web sites (7). Those who had been to free play sites were ambivalent though this may be due to the fact that this group includes a significant proportion of people who have not played casino games and who are not regular patrons of landbased casinos or real money gaming sites. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 12

19 Are You Interested in Playing Free Casino Style Games Online? Land Based 76% 2 Free Play 4 5 Yes No Real Money 7 26% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Landbased Casino Association for Free Play Gaming Sites We asked respondents if a traditional landbased casino were to offer a gaming web site in which you played only for points, prizes, complimentaries (free meals, free hotel room etc.) and promotions redeemable only at the casino, how likely would you be to play on that website. As the chart below shows there was uniform and overwhelming interest across all categories. The association with a landbased casino incentivized or created a level of trust among respondents who had been to a free play site to the extent that their positive responses were now similar to those of other categories. 100% 80% Likelihood of Visitation to a Free Play Site Associated with a Landbased Casino 76% % 40% 20% 0% Real Money Free Play Landbased Somewhat or Very Likely Somewhat or Very Unlikely Landbased Casino Association for Real Money Gaming Sites Those who had played for real money online were most likely to be influenced by a landbased casino association with a real money gaming site and, to a lesser extent, also those who had been to The Innovation Group National Survey of Internet Users and Gaming Behavior Page 13

20 a landbased casino. Even for those who had played free play games, 5 indicated such an association would engender greater play. Would Association with a Traditional Landbased Casino Lead to a Greater Likelihood of Choosing a Particular Real Money Site? Landbased 66% 3 Free Play 5 4 Yes No Real Money 7 2 0% 20% 40% 60% 80% 100% What Devices Have You Used to Play Online Games Desktop or laptops remain the most commonly used device followed by phone and PDA s. It is however notable that this year the ipad, Kindle and other electronic tablets have grown rapidly in use for online gaming. It is also notable that those who have played online for real money are more likely to be early adopters of new technology. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 14

21 What Types of Devices Have You Used To Play Online Games Either for Money or for Fun? Total Landbased Free Play Real Money Desktop or Laptop Computer 98% 9 98% 98% Phone or PDA 1 18% 18% 20% Ipad, Kindle or Similar Electronic Tablet 18% Handheld Device in a Casino Other (please Specify) 2% 2% 2% 0% 20% 40% 60% 80% 100% 120% The Innovation Group National Survey of Internet Users and Gaming Behavior Page 15

22 Online Casino & High Frequency Players To better define the differences between the population samples of those who have played at landbased casino, those who have visited free play sites and those that have played online for real money - and to provide a comparison more specific to casino play - two selections were made from the data set. First, we selected only those players who played online casino games and second, we selected only those respondents who had a higher than average frequency of play for each sample segment (i.e. higher than average frequency of landbased play, higher than average frequency of free play, and higher than average frequency of real money play). As the following table shows there remains substantial overlap among the various high frequency groups that have played at an online casino. Which Type of Above-Average- Frequency Gaming? Which Type of Above-Average- Frequency Gaming? Real Money Free Play Land- Based Real Money % 68.00% 48.90% Free Play 44.60% % 38.00% Land-Based 39.40% 46.60% % Demographics Age Those who play casino games online, regardless of whether they are high frequency real money players, high frequency landbased players or high frequency free play players, have an age profile similar to online real money players overall (see page 8). This suggests that those who play online casinos are younger whether they play frequently for money, for free or at landbased casinos. From this information it follows that there are two challenges or opportunities: 1. Conversion of these younger players to landbased visitation. thereby offering the opportunity to infuse the landbased casino with younger players. 2. Extend and increase the level of play online from older patrons of a landbased casino. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 16

23 Age Distribution by Respondent Group Above Average Real Money Above Average Free Play Above Average Landbased 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% When compared to the survey as a whole and by sample segment those who play online casino games and have a high frequency of play at either landbased casinos, online free play casinos or online real money casino are younger. What is Your Age? Total 45 Landbased 47 Free Play 47 Real Money 42 Above Average Frequency of Landbased Visits 41 Above Average Frequency of Online Freeplay 44 Above Average Frequency of Online Real Game Play Income Income levels for those with higher than average landbased casino visitation tends to be higher than those who report higher than average free and real money casino play online. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 17

24 What Is Your Total Household Income? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money Under $20,000 a Year 10% 1 16% 18% $20,000-39,999 a Year 16% 22% 22% 22% $40,000-59,999 a Year 22% 2 22% 2 $60,000-79,999 a Year 1 18% 1 1 $80,000-99,999 a Year 10% $100, ,999 a Year 10% $125, ,999 a Year 6% $150,000 a Year or More 2% 0% 10% 1 20% 2 30% Ethnicity Frequent landbased gamers who play casino games are the most ethnically diverse, while those that frequently play for real money exhibit the least diversity. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 18

25 What Do You Consider Your Race and/or Ethnicity? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money White, non-hispanic 60% 7 70% 7 White, Hispanic 6% 1 Native American 2% Black, non-hispanic Black, Hispanic 2% 2% 2% 2% Asian 6% 6% 0% 10% 20% 30% 40% 50% 60% 70% 80% Landbased Casino Association for Free Play Gaming Sites High frequency players from all groups that have played at an online casino would be more likely to play at a free play site associated with a landbased casino than the survey respondents as a whole. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 19

26 If a Traditional Landbased Casino Were To Offer a Free Play Site, How Likely Would You Be To Play On That Site? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money 5 - Very Likely 46% Somewhat Likely 2 26% 32% 38% 3 - Neither Likely Nor Unlikely 8% 8% Somewhat Unlikely 6% 1 - Not At All Likely 2% 6% 8% 0% 10% 20% 30% 40% 50% 60% 70% The high frequency players among all groups that also play online casinos indicated that they would be more likely to change their visitation patterns to a casino that offered a free play site than were the survey respondents as a whole. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 20

27 Would the Ability to Gamble on the Aforementioned Casino's Website for Points, Prizes, Complimentaries, etc. Change Your Visitation Patterns to that Casino? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money 56% Yes 62% No 3 38% 3 0% 10% 20% 30% 40% 50% 60% 70% 80% Respondents were asked how such a free play site would impact landbased casino visitation. Among all the high frequency groups that have played at an online casino there is a distinct trend which points towards greater landbased play as a result of the development of an associated free play site. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 21

28 How Would Your Visitation Change? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money I Would Play Somewhat More at the Casino 38% I Would Play Somewhat Less at the Casino 20% 28% 2 2 I Would Play Much More at the Casino 16% 1 20% 2 I Would Play Much Less at the Casino % 10% 1 20% 2 30% 3 40% 4 50% Landbased Casino Association for Real Money Gaming Sites The high frequency groups who had visited online casinos were resoundingly positive when asked if association with a landbased casino would make it more likely that they would visit a web site. This was more pronounced for the high frequency landbased and real money players than for free play. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 22

29 Would an Association with a Traditional Landbased Casino Lead to a Greater Likelihood of Choosing a Real Money Site? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money 7 Yes 7 86% 8 2 No % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% As was the case for the survey as a whole the increase in visitation would be primarily through increased trips although slightly more people among these high frequency groups that have gambled at an online casino indicated that they would also increase their spend per trip. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 23

30 Given That You Would Play More, Which of the Following Responses Most Describes Your Anticipated Play at the Casino If Internet Gaming Was Legalized? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money 2 I Would Wager More at the Casino 2 22% 2 I Would Make More Trips To the Casino 50% % 22% I Would Make More Trips and Wager More at the Casino 2 28% 2 0% 10% 20% 30% 40% 50% 60% Characteristics of Play Duration of Online Gaming Session The following three charts show the difference between the duration of time spent online playing casino games of each of the three high frequency groups. The charts compare the average duration for the entire survey, for the entire category or group and for those that have high frequency of play within that group. The typical online gaming session lasts between 31 and 60 minutes. Across all categories high frequency players whether they have a high frequency of landbased visitation, online free play or online play for real money tend to spend more time online gaming. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 24

31 Approximately How Much Time Does an Average Online Gaming Session for Real Money Last? Total Survey Real Money, All Above Avg. Real Money Greater than 180 Minutes Minutes Minutes Minutes Minutes Minutes 6-10 Minutes Less than 5 Minutes 6% 8% 8% 1 10% 16% % 2 22% % 10% 1 20% 2 30% 3 The Innovation Group National Survey of Internet Users and Gaming Behavior Page 25

32 Approximately How Much Time Does an Average Online Gaming Session for Real Money Last? Total Survey Free Play, All Above Avg. Free Play Greater than 180 Minutes Minutes Minutes 1 10% % Minutes % Minutes % Minutes 6-10 Minutes Less than 5 Minutes 0% 10% 1 20% 2 30% 3 40% The Innovation Group National Survey of Internet Users and Gaming Behavior Page 26

33 Approximately How Much Time Does an Average Online Gaming Session for Real Money Last? Total Survey Land Based, All Above Avg. Landbased Greater than 180 Minutes 8% 8% Minutes Minutes 1 12% % Minutes Minutes Minutes 8% 6-10 Minutes 0% 2% Less than 5 Minutes 2% 0% 10% 1 20% 2 30% 3 Frequency of Play for Real Money The following chart shows how frequently respondents who are frequent landbased and free play players play for real money online. Those who engage in free play frequently are more likely to be frequent players for real money than frequent landbased players. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 27

34 Approximately How Frequently Did You Participate in Online Gaming Sessions for Real Money Over the Last 12 Months? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money Multiple Gaming Sessions per Day Daily Gaming Sessions 4-6 Gaming Sessions Per Week 2-3 Gaming Sessions Per Week 1 Gaming Session Per Week 2-3 Gaming sessions Per Month 1 Gaming Session Per Month 6-11 Gaming Sessions Per Year 2-5 Gaming Sessions Per Year 1 Gaming Session Per Year 0% 0% 0% 2% 0% 2% 0% 0% 2% 0% 0% 1 1 6% 8% 10% 6% 16% % 16% 20% % 10% 1 20% 2 30% 3 40% Online Real Money Per Session Budget The most common budgeted amount by high frequency real money and free play players who have played at an online casino for real money was between $7 and $10 per gaming session. There were a variety of significant responses up to $250 per session with the proportion spending more than $250 dropping off dramatically. However while there is significant variation in wagered amount among all groups, the high frequency landbased players tend to wager more online than either of the other groups. For frequent landbased gamers the most common budgeted amount was between $101 and $250 which is similar to their reported budget for a landbased casino visitation. This suggests that existing high frequency landbased players would be high value customers for a real money online site. In addition it was noted that the greater the frequency of play among all groups the greater the likelihood that the session budget will be larger. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 28

35 Approximately How Much Money Do You Wager Over an Entire Average Online Gaming Session for Real Money? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money Over $2,500 $1,001-2,500 $501-1,000 $ $ $ $36-50 $26-35 $16-25 $11-15 $7-10 $4-6 $ Cents to $1 Less than 50 Cents 2% 2% 2% 2% 2% 6% % 6% 6% 6% 10% 10% 8% 6% 6% 12% 12% 1 1 8% 6% 1 10% 1 8% 6% % 0% 2% 6% 8% 10% 12% 1 16% 18% 20% Real Money Online Games Played The most popular online real money games for these high frequency groups were poker, slots, and blackjack. After these came lottery, scratch cards and bingo. Roulette was especially popular with high frequency landbased gamers. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 29

36 What Real Money Games Have You Played Online in the Past 12 Months? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money Trivia Slots Scratch Cards Roulette Poker Pai Gow Poker Lottery Keno Craps Caribbean Stud Blackjack Bingo Baccarat % 36% 42% 4 48% % 1 10% % 5 16% 2 20% 18% % 10% 10% % % 6 6 0% 10% 20% 30% 40% 50% 60% 70% 80% When compared to games played within a landbased casino slots were the most mentioned games among high frequency landbased and high frequency free play gamers when they visited a casino. While high frequency real money online gamers also indicated a high level of slot play at a landbased casino this group indicated even higher levels of play for Blackjack and poker. In each case this group played these games significantly more than either of the two other high frequency groups. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 30

37 What Sort of Casino Style Games Have You Played in a Casino In the Past 12 Months? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money Sports Book Slots % Scratch Cards Roulette % 4 Poker 5 62% 60% 7 Pai Gow Poker 1 Keno 20% 2 28% 3 Craps 18% 2 30% 30% Caribbean Stud Blackjack % 78% Bingo Baccarat 6% 10% 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Lottery Impacts Those high frequency gamers who have played at an online casino were more likely than the survey respondents as a whole to purchase lottery tickets online. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 31

38 How Likely Would You be to Purchase Lottery Tickets Online if States Were Permitted to Sell Them on a Website? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money 5 - Very Likely 4 58% 5 56% % 22% % 2% 2% 1 - Not At All Likely 6% 1 0% 10% 20% 30% 40% 50% 60% 70% However they are also more likely to reduce their lottery purchases from traditional retailers. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 32

39 How Likely Would The Availability of Purchasing Lottery Tickets Online Reduce Your Lottery Purchase at Retailers? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money 5 - Very Likely 32% 3 40% % % 2 6% 8% 6% 1 - Not At All Likely 1 12% 1 0% 10% 1 20% 2 30% 3 40% 4 What Devices Have You Used to Play Online Games High frequency landbased gamers that also play at online casinos exhibit a significantly greater use of electronic tablet devices to play than does the surveyed population as a whole. High frequency real money gamers playing at online casinos also exhibit a higher than average usage of electronic tablets. Also all high frequency groups that play at online casinos report higher usage of cell phones and PDA s and handheld devices at casinos that the survey respondents as a whole. Despite these rapidly evolving trends towards greater diversity of devices the desktop and laptop remain the dominant devices. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 33

40 What Types of Devices Have You Used to Play Online Games Either for Money or for Fun? Total Survey Above Avg. Landbased Above Avg. Free Play Above Avg. Real Money Desktop or Laptop computer Phone or PDA % ipad, Kindle or similar electronic tablet % Handheld device in a casino 16% 1 1 Other (Please Specify) 2% 2% 0% 20% 40% 60% 80% 100% 120% The Innovation Group National Survey of Internet Users and Gaming Behavior Page 34

41 Online Casino Gamers-Focus on Age In this section we selected only those who reported playing online casino games and then divided the sample into two groups based on whether or not they were above or below the mean age of the sample (47 years old). The following charts were those where we found significant differences between the two population groups. Game Types Younger than average respondents played social media games and real money games at a significantly higher rate than the older group of respondents. Which of the Following Types of Games Do You Play Online? Total Survey Younger than Avg. Older than Avg. 5 Social Media Games 3 70% 6 Real Money Games 52% 6 Games Where You Can Earn Points for Prizes 66% Free Games 9 90% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% The Innovation Group National Survey of Internet Users and Gaming Behavior Page 35

42 Older individuals focused their online play on online casino games, card games and puzzle games whereas the younger age group played a broader array of games such as social media games, strategy games, casino games and online card games. Which Genre of Games Do You Play Online? Total Survey Younger than Avg. Older than Avg. Online Sports Games - Such As Golf, Football, Racing 30% 36% 22% Online Shooting Games - Such As War Games or Hunting Games 18% 2 38% Online Puzzle Games - Such As Mahjong 56% 56% 5 Online Multi Player Games - Such As World of Warcraft 1 28% 4 Online Casino Style Games - Poker, Blackjack, Roulette, Slot % Online Card Games - Such As Solitare, Rummy, Etc. 66% 6 62% Online Arcade Games - Such As Asteroids, Pac Man, Etc. 2 42% 5 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Interest in Online Free Play Casino Games Younger respondents had a much higher level of interest in free play casino games than did the older group. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 36

43 Are You Interested in Playing Free Casino Style Games Online? Total Survey Younger than Avg. Older than Avg. 42% Yes 48% 2 58% No 52% 7 0% 10% 20% 30% 40% 50% 60% 70% 80% When asked what free casino games they had played in the last 12 months significantly more of the younger group had played a wider variety of games. The most popular games for both groups were slots, poker and Blackjack. Slots were the only game in which older respondents proportionally outplayed the younger age group. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 37

44 What Free Casino Style Games Have You Played Online in the Past 12 Months? Total Survey Younger than Avg. Older than Avg. Sports Book 6% 1 2 Slots Scratch Cards Roulette 22% 32% 4 Poker 56% 6 66% Pai Gow Poker 6% 1 Keno 22% 2 18% Craps 8% 1 18% Caribbean Stud 10% 16% Blackjack 58% 6 70% Bingo 42% 50% 56% Baccarat 1 0% 10% 20% 30% 40% 50% 60% 70% 80% Real Money Games In a similar vein the younger age group played a wider variety of real money games and with the exception of slots played these proportionately more than the older demographic. For the younger demographic the most played online games for real money were Blackjack, poker, and lottery games, while for the older age group slots were the most popular followed by poker and Blackjack. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 38

45 What Real Money Games Have You Played Online in the Past 12 Months? Total Survey Younger than Avg. Older than Avg. Trivia % Slots Scratch Cards 26% 36% 42% Roulette Poker % Pai Gow Poker 8% Lottery 36% 4 5 Keno 1 16% 18% Craps 1 1 Caribbean Stud 8% Blackjack Bingo % Baccarat 2% 1 0% 10% 20% 30% 40% 50% 60% 70% Younger players tended to play for greater wagers than older players. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 39

46 Approximately How Much Money Do You Wager per Play During an Average Online Gaming Session for Real Money? Total Survey Younger than Avg. Older than Avg. Over $2,500 $1,001-2,500 $501-1,000 $ $ $ $36-50 $26-35 $16-25 $11-15 $7-10 $4-6 $ Cents to $1 Less than 50 Cents 0% 0% 0% 0% 0% 0% 2% 0% 6% 0% 2% 0% 6% 8% 1 6% 10% 1 10% 12% % 1 22% 2 40% 0% 10% 1 20% 2 30% 3 40% 4 Landbased Casino Visitation For the younger than average age group Blackjack was the most popular landbased casino game followed by slots and poker while the older age group favored slots first followed by Blackjack and then poker. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 40

47 What Sort of Casino Style Games Have You Played in a Casino in the Past 12 Months? Total Survey Younger than Avg. Older than Avg. Sports Book 1 18% Slots 68% 7 82% Scratch Cards Roulette Poker % Pai Gow Poker Keno 1 20% 2 Craps 8% 18% 26% Caribbean Stud 10% Blackjack 52% 6 7 Bingo Baccarat 6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Landbased Visitation Changes as a Result of a Free Play Site Significantly more of the younger population indicated that they would change their visitation patterns to an associated landbased casino, whereas older players were less likely to change their visitation patterns. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 41

48 Would the Ability to Gamble on the Aforementioned Casino's Website for Points, Prizes, Complimentaries, etc. Change Your Visitation Patterns to That Casino? Total Survey Younger than Avg. Older than Avg. 56% Yes No 3 5 0% 10% 20% 30% 40% 50% 60% 70% Of those that said they would change their visitation patterns more of the older group reported more play than the younger age group, though both groups still reported a net positive gain in regard to landbased casino visitation. For both groups these changes would be primarily made through increased visitation although a greater proportion of the younger group indicated they would wager more. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 42

49 Given That You Would Play More, Which of the Following Responses Most Describes Your Anticipated Play at the Casino If Internet Gaming Was Legalized? Total Survey Younger than Avg. Older than Avg. 2 I Would Wager More at the Casino 2 16% 5 I Would Make More Trips To the Casino 52% 62% I Would Make More Trips and Wager More at the Casino 22% 2 2 0% 10% 20% 30% 40% 50% 60% 70% Devices Used The younger demographic is more likely to use devices other than laptops or desktop computers to play online. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 43

50 What Types of Devices Have You Used to Play Online Games Either for Money or for Fun? Total Survey Younger than Avg. Older than Avg. Desktop or Laptop computer 9 98% 100% Phone or PDA 2 3 ipad, Kindle or similar electronic tablet 1 32% Handheld device in a casino 10% 0% 20% 40% 60% 80% 100% 120% Demographics The younger demographic appears to be better educated, makes more money and are more ethnically diverse than the older group. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 44

51 What Is Your Total Household Income? Total Survey Younger than Avg. Older than Avg. $150,000 a Year or More $125, ,999 a Year $100, ,999 a Year $80,000-99,999 a Year 1 $60,000-79,999 a Year % $40,000-59,999 a Year 22% 22% 22% $20,000-39,999 a Year 1 22% 28% Under $20,000 a Year 1 16% 1 0% 10% 1 20% 2 30% The Innovation Group National Survey of Internet Users and Gaming Behavior Page 45

52 What Do You Consider Your Race and/or Ethnicity? Total Survey Younger than Avg. Older than Avg. White, non-hispanic White, Hispanic 10% Native American Black, non-hispanic % Black, Hispanic 2% 2% Asian 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% The Innovation Group National Survey of Internet Users and Gaming Behavior Page 46

53 Annual Gaming Budgets In this section we focus on those that only play online casino games. We then contrast and compare those that have below average, average and above average budgets for landbased and online play and their respective responses to the survey questions. Demographics Ethnicity Real money online players are more ethnically diverse than above average landbased players. What Do You Consider Your Race and/or Ethnicity? Total Survey Above Avg. Landbased Above Avg. Real Money White, non-hispanic 72% 7 8 White, Hispanic 10% Other (Please Specify) 0% Native American 0% 0% Black, non-hispanic 1 8% 1 Black, Hispanic 2% 2% 2% Asian 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% The Innovation Group National Survey of Internet Users and Gaming Behavior Page 47

54 Gender Significantly more males have higher than average landbased and online budgets than do females. What is Your Gender? Total Survey Above Avg. Landbased Above Avg. Real Money 5 Male 68% 6 4 Female 32% 3 0% 10% 20% 30% 40% 50% 60% 70% 80% Interest in Free Play While both high budget landbased and real money online players are more interested in free play sites than the survey as a whole the high budget real money players are significantly more interested than high budget landbased players or the survey as a whole. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 48

55 Are You Interested in Playing Free Casino Style Games Online? Total Survey Above Avg. Landbased Above Avg. Real Money 42% Yes 6 86% 58% No 38% 1 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Interest in Free Play Game Types High budget landbased players are more interested in games such as Roulette, poker, and Pai Gow while the real money online gamers are more interested in slots, scratch cards, craps and Blackjack. Strangely landbased high budget players and extremely interested in a sports book although we are unclear why this should be so given that the specification was for a free play site. Free Play Games Played in Last 12 Months When asked what free play games they have played in the last 12 months the top games for both groups were slots, poker and Blackjack. However above average real money gamers were more likely to have p[played scratch cards, Roulette, Keno craps Caribbean Stud, Bingo and Baccarat than their landbased counterparts. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 49

56 What Free Casino Style Games Have You Played Online in the Past 12 Months? Total Survey Above Avg. Landbased Above Avg. Real Money Sports Book Slots 7 78% 82% Scratch Cards 32% 3 56% Roulette 32% 3 5 Poker Pai Gow Poker 1 Keno 22% 2 3 Craps 1 20% 3 Caribbean Stud 10% 2 Blackjack 6 72% 6 Bingo 42% 50% 5 Baccarat 1 20% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Frequency of Play on Free Play Sites Last 12 Months With the exception of poker and Blackjack above average real money players played more frequently on free play sites for all game selections than did their landbased counterparts. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 50

57 Approximately How Frequently Did You Participate in Free Online Gaming Sessions over the Last 12 Months? Total Survey Above Avg. Landbased Above Avg. Real Money Multiple Gaming Sessions per Day Daily Gaming Sessions 4-6 Gaming Sessions Per Week 2-3 Gaming Sessions Per Week 1 Gaming Session Per Week 2-3 Gaming sessions Per Month 1 Gaming Session Per Month 6-11 Gaming Sessions Per Year 2-5 Gaming Sessions Per Year 1 Gaming Session Per Year 8% 2% 0% 2% 0% 0% 18% % 22% 26% % 10% 1 20% 2 30% Duration of Play The above average real money player s plays longer than his landbased counterpart and the survey as a whole on both free play and real money sites. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 51

58 Approximately How Much Time Does an Average Free Play Online Gaming Session Last? Total Survey Above Avg. Landbased Above Avg. Real Money Greater than 180 Minutes 6% 6% 10% Minutes 8% 8% Minutes 1 20% Minutes Minutes 18% Minutes 6-10 Minutes Less than 5 Minutes 0% 0% 0% 10% 1 20% 2 30% 3 40% 4 Approximately How Much Time Does an Average Online Gaming Session for Real Money Last? Total Survey Above Avg. Landbased Above Avg. Real Money Greater than 180 Minutes Minutes 1 12% 16% Minutes 1 20% Minutes 3 32% Minutes Minutes 2% 6-10 Minutes 0% Less than 5 Minutes 0% 10% 1 20% 2 30% 3 40% The Innovation Group National Survey of Internet Users and Gaming Behavior Page 52

59 Real Money Games Played Last 12 Months The top real money games for both groups were poker and Blackjack and greater proportions of both groups played these in comparison to the survey as a whole. Slots were the third most played game with a higher concentration of above average budget landbased players. Slot play among high budget online players was proportionally less than landbased counterparts and the survey population as a whole. What Real Money Games Have You Played Online in the Past 12 Months? Total Survey Above Avg. Landbased Above Avg. Real Money Trivia Slots 5 60% 5 Scratch Cards 30% 36% 3 Roulette Poker Pai Gow Poker 8% 8% 1 Lottery Keno 16% 18% 2 Craps 1 22% 20% Caribbean Stud 6% Blackjack Bingo Baccarat 10% 10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Landbased Casino Visitation in Last 12 Months The mode for landbased visitation for each group is between 3 and 5 visits annually. However, the above average real money gamer also tends to visit landbased casinos at a higher frequency than his landbased casino counterpart. This suggests that the avid real money online gamer is also largely an avid landbased gamer. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 53

60 Approximately How Many Visits Have You Made During the Past 12 Months to Participate in Gaming Activity at a Traditional Landbased Casino? Total Survey Above Avg. Landbased Above Avg. Real Money 30 Plus % % % % 36% % 2 0% 10% 1 20% 2 30% 3 40% Real Money/Free Play Gaming Site and Landbased Association Both groups value an association with a landbased casino in selecting a real money web site to play on at a level greater than the survey as a whole. However, not surprisingly, the above average landbased budget player values this to a greater extent than his online counterpart. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 54

61 Would Aan Association with a Traditional Landbased Casino Lead to a Greater Likelihood of Choosing a Real Money Site? Total Survey Above Avg. Landbased Above Avg. Real Money 7 Yes 9 86% 2 No 1 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% The free play responses for these groups were not significantly different than for the survey as a whole. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 55

62 Online Casino Players - Slots Versus Table Players There have been two areas of interest as it relates to slot and table players and online gaming, these are: 1. Does their play differ online versus landbased; specifically would online gaming (free play or real money) offer a training ground for slot players interested in playing table games but who are intimidated by table games at a landbased casino? 2. Would players behave differently in terms of their visitation patterns to a landbased casino or website associated with a landbased casino as a result of online gaming? Looking only at those who play online casino games we then selected those that play table games versus slots at a landbased casino. These are NOT mutually exclusive; in other words, someone who plays a table game in this case may also play slots. It does appear that slot players play a wider variety of games on free play sites than they do at the landbased casino. Slot players also seem to play scratch cards, bingo, and poker more often for real money online than they do at a landbased casino. For the less common table games (Pai Gow, etc.) it does seem like they play those more frequently online for free and for real money too. This lends some credence to the notion that online sites whether free play or for real money could act as a training ground for slot players interested in playing table games both online and at a landbased casinos. Table game players also seem to branch out a bit when they are online; for example, they seem to play slots online more for free, as well as bingo, keno, scratch cards, and sports books. Generally speaking, however, they play the different table games less frequently online for real money than they do at landbased casinos. It is our supposition that this is due to the lack of social interaction to be found online compared with landbased casinos. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 56

63 What Sort of Casino Style Games Have Those Who Play Slots Played in a Casino in the Past Twelve Months? Landbased Casino Free Play Real Money Sports Book Scratch Cards Keno Bingo Roulette Pai Gow Poker Caribbean Stud Baccarat Craps Blackjack Poker Slots 0% % 2 30% 20% 32% 52% % 3 6% 10% 8% 10% 1 16% 1 48% % % 0% 20% 40% 60% 80% 100% 120% The Innovation Group National Survey of Internet Users and Gaming Behavior Page 57

64 What Sort of Casino Style Games Have Those Who Play Table Games Played in a Casino in the Past Twelve Months? Landbased Casino Free Play Real Money Sports Book 0% 16% 2 Scratch Cards 26% 38% 4 Keno 2 18% 2 Bingo Roulette 32% 42% 46% Pai Gow Poker 8% 1 1 Caribbean Stud 16% Baccarat 1 Craps 2 18% 20% Blackjack 66% 80% 78% Poker Slots 5 70% 76% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% In the following tables we look at the relationship between landbased casino and associated web sites in terms of visitation by slot players, table players and all landbased gamers. Table players tended to be more positively influenced by landbased association with a real money web site than slot players. 8 of table players indicated they would be more likely to visit an online real money gaming site associated with a landbased casino compared to 7 for slot players. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 58

65 Would an Association with a Traditional Landbased Casino Lead to a Greater Likelihood of Choosing a Real Money Site? Yes No Total 7 2 Slots 7 26% Tables 8 1 0% 20% 40% 60% 80% 100% For a free play site there would also be a positive relationship in terms of selecting a web site to play on but there was little difference between slot and table players. If a Traditional Landbased Casino were to Offer a Free Play Site, How Likely Would You Be to Play on that Site? Total Slots Tables 5 - Very Likely 4 50% 46% 4 - Somewhat Likely Neither Likely Nor Unlikely Somewhat Unlikely 1 - Not At All Likely 0% 10% 20% 30% 40% 50% 60% The Innovation Group National Survey of Internet Users and Gaming Behavior Page 59

66 For a free play site associated with a landbased casino, table players would again be influenced more than slot players to change their visitation patterns. Would a Casino's Free Play Site Change Your Visitation Patterns to that Casino? Yes No Total 5 46% Slots 52% 48% Tables 60% 40% 0% 20% 40% 60% 80% 100% As the table below shows this would result in a positive impact on visitation but there is no significant difference between slot and table players. How Would Your Visitation Change? Total Slots Tables I Would Play Much More at the Casino I Would Play Somewhat More at the Casino I Would Play Somewhat Less at the Casino 28% 3 2 I Would Play Much Less at the Casino % 10% 1 20% 2 30% 3 40% 4 50% The Innovation Group National Survey of Internet Users and Gaming Behavior Page 60