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How To Make MGM The Biggest Online Casino Operator
The key to operating any successful business is being able to predict the future, some companies get it right and grow their businesses exponentially such as Apple with the Iphone and some get it spectacularly wrong such as Toshiba and HD DVD.
In the gambling industry the ease with which companies have for all eternity been able to predict that people will still gamble has been abused and has in the land based casino industry stifled innovative product development. This has to change now as the world of online gambling is simply too big to ignore.
For a case study we thought it would be a good exercise to take the largest casino operator MGM (NYSE:MGM) and look at what would need to be done to transfer the dominance that MGM has in the bricks and mortar casino world into online gambling dominance. Now without access to company files and knowledge this may be a stab in the dark or may be right on the button only time will tell.
So how do we take MGM from offline monster to online beauty? There are several important key steps that have to be taken.
Firstly MGM must consider it's current position and look at what assets it may have in the move to online casino, they must also look at what hurdles might exist to this process. The main and obvious advantages are the brand name and their Las Vegas and Macau properties.
These properties are very important when it comes to marketing and rewards but we will come back to that later. The hurdles that may exist could primarily be from the publics understanding of any new legalized form of online gambling. MGM would have to act as both the casino and the educator when the final regulation and legalization does come along.
The other hurdle could well be in the small print of any legislation. The current position of many politicians is that any regulation would enable every bet placed by a U.S. Citizen to be taxed, they argue that it is not fair for an offshore company to take wagers without paying the relevant tax to the authorities. How does this equate to the holder of an American online gaming license taking wagers from other countries in the world? It would seem somewhat hypocritical for the U.S. Government not to object.
Only time will tell how that one gets answered. So for now we have only really got assets with regards to moving forward. Not a bad position to be in.
The next step may seem insignificant and obvious at the same time, choosing a Brand and domain name. It seems that MGM have reserved MGM Casino as the dot com domain as currently this shows the main MGM website. MGM Online is taken by Metro-Goldwyn-Mayer Studios. This would have been the ideal domain and brand for MGM to move online but it is not to be.
The brand needs consideration as to whether the Online gaming client and the Las Vegas Visitor who uses the current website are the same people. The current MGM website is not ranked in the first 1000 results on google for the term casino. This will be a big hill to climb and once that process has begun it cannot be stopped or everything is set back to zero again.
Lets say for arguments sake that new legislation requires it to be a stand alone business and have a separate site to the main and current hotel and casino website. We will assume that MGM use the domain MGM Casino.
The next step is to choose a provider for the online casino software. These companies have built the industry and it would be foolhardy to think MGM could simply build their own software and compete with the likes of Playtech or Microgaming. Again the new regulations could prove a problem here.
Everyone within the industry fully expects to see new regulations prohibit any company that has taken so called illegal wagers from America in the past from applying for a new U.S gaming license.
The question is will this apply to the software manufacturers? At first glance you would say no but remember that the software companies in the online gambling world work on a revenue share of sorts and a Casino sites fees are based on a percentage of its revenue, it could be argued that the makers of the software are just as entangled as the operators of the casino websites.
This again will need to be clarified by the authorities prior to any decision. The other factor to consider is the very high percentages that the software manufacturers demand, we can be fairly sure that MGM will not be comfortable paying at these rates. There is hope though as Harrahs have signed up with 888 for their online software in regard to its new non American online business.
So lets do the easy thing and assume we have chosen our domain name and selected and signed up with a software provider, if only it was that simple but we can dwell on it no longer.
The next step is all about visibility on the web. Defining, designing and implementing an SEO strategy will be the make or break moment for MGM in their online venture. Remember they do not figure in the first 1000 results when you type casino into google. That means that their are at least 1000 competitors in front of them. In fact the MGM Grand website is in about 1300th place.
There are many good SEO companies that could be used for this but the ideal situation when it comes to gambling online is to have a dedicated in house team to constantly work on the SEO as it changes every single day. Remember those 1299 people in front will be doing the same thing. There is leverage to be made by using the current websites but not enough to beat the current online gambling guys who are as good at this as MGM is as emptying your pockets once you hit the casino floor.
It may be a good idea in the long run to simply buy out an existing operation and hit the ground running, again though the issue of past legal or illegal activities comes into play.
SEO is now planned, staffed and up and running, the site is improving its volume of organic search traffic and things are looking up. Why should a player play online with MGM? There has to be a differentiating factor, some little incentive that the competition cannot match.
This is where we come back to the value of the properties in Las Vegas and Macau. Firstly there simply has to be a rewards program where a player online can earn points or credits towards hotel and entertainment cost's in Las Vegas or Macau. Secondly is the progressive slot jackpots.
This is where MGM could strike a killer blow. Imagine a progressive slot machine that was connected to the online gaming server, the Casinos in Las Vegas and the Casinos in Macau. The jackpot would be huge. The biggest ever progressive jackpot so far on the internet was 6.5 million Euros. We could be talking $20 million if MGM linked them all together.
In fact, as unlikely as it is to ever happen just imagine what the jackpot could be if all the operators in Las Vegas that went online joined together to offer a network progressive slot across the internet casinos and land based. Could it reach $100 million jackpot? I do not see why not.
The last piece of the puzzle is the offline advertising campaign. This has be be very very clever as it needs to not only sell the product but educate the public at the same time. It is do-able and the educational aspect will certainly give the advertising execs something to get started with.
To compete with the current online casinos this advertising campaign will need to be big and well funded. The payout is there, the estimated revenue of the offshore online gaming companies in 2008 was $5.6 billion and this is when it is supposed to be illegal. The revenue when legalized could easily be double that.
So we have a domain, we have online gambling software. We have an SEO strategy in place and our Super Bowl adverts are a hit. Simple wasn't it?
The only problem is that every single Casino in America is trying to do the same thing at the same time. The only thing for certain is that it will a fantastic battle to watch.
About the Author
Calida Gaming have Four Generations of Gambling Industry experience and certify only the very best
Casino
, Bingo, Poker and Sports sites. Daily news and opinion to both inform and spark healthy debate.
Calida Gaming
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