National Survey of Internet Users and Gaming Behavior

Transcription

1 National Survey of Internet Users and Gaming Behavior THE INNOVATION GROUP

2 Foreword I-gaming is the potential new frontier in the U.S. gaming industry. While its domestic development has been stymied in recent years by the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), online gaming has become increasingly popular among Americans and is likely to continue to grow. Bricks and mortar casino companies have understandably been wary of I-Gaming, uncertain as to how it will impact their investments and how effectively they could compete with established online gaming companies. Behind this uncertainty is a paucity of information on domestic internet gamers and their relationship to bricks and mortar casinos. Until now, online gamers in the U.S. have not been subject to the kind of comprehensive research that international players have. The composition of the new Congress makes it unlikely UIGEA will be overturned in the short term. However, given developments in other countries, especially in Europe, we believe legalization is primarily a matter of when rather than if. Over the next few years, increasing pressure will be placed on Congress to legalize and regulate internet gaming. In addition, many states are considering intra-state I-gaming legislation. This expected short term lull is an ideal opportunity for the U.S. casino industry to prepare for the inevitable internet wave. 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 1,200 gamers across U.S. in looking for answers to the following questions: Who are internet gamers? What games do they play? How do they compare them to bricks and mortar gamers, and what is the level of crossover? How would gamers react to legalization in terms of play patterns? What is their level of support for legalization? How would legalization affect bricks and mortar casinos? 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 i

3 Table of Contents Introduction... 1 Summary of Survey Results... 2 Overview... 2 Demographics... 2 Demographics by Game Type-Online versus B&M... 3 Types of Games Played Online... 4 Reasons Why People Play Online... 4 Online Play Characteristics... 4 Branding... 6 Finding an Online Casino... 7 Favorite Online Sites... 7 Reasons for Selecting an Online Gaming Site... 8 Reasons for Selecting a B&M Casino... 8 Views on Legalization... 8 Change in Play if Online Gaming Legalized... 9 If Online Gaming Is Legalized What Factors would Influence Your Site Choice Lottery Play Native American Casinos and Online Gaming Key Conclusions Survey Results - Charts Demographics Demographics by Game Type Age Gender Marital Status Education Income Ethnicity Political Affiliation Type of Games Played Reasons for Gambling/Not Gambling Online Gaming Frequency and Budget Branding B&M Casino Choice Online Gaming Site Choice Favorite Online Gambling Site Legalization of Online Gambling State Lottery Native American Casinos and Online Gaming The Innovation Group Contact Information The Innovation Group National Survey of Internet Users and Gaming Behavior Page ii

4 Introduction This survey was conducted in October 2010 over a one week period. The survey panel was internet-based with an expressed interest in gaming. 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. The following graph reveals the results: Gaming Venue Participation Within The Last Twelve Months None [TERMINATE] 1 Cruise ship Riverboat casino 1 A race track with gaming machines 18% Online casino 28% Land based casino that is not part of a hotel or resort 3 Land based casino that is part of a hotel or resort Respondents who indicated that they had not participated in gaming in the last 12 months were terminated. A total of 1,206 valid surveys were thus obtained. From a 2007 Census report it is estimated that 6 of the nation's households report using the Internet at home and of these 8 reported using a high-speed connection. 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 wagering for money in the U.S. is approximately 9.. We believe that the inherent bias of the survey panel which was qualified through an expressed interest in gaming skewed the results and that the probable incidence is likely a little lower, probably around. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 1

5 Summary of Survey Results Overview To facilitate the analysis, the survey was broken down into the following groups: Played at Bricks and Mortar (B&M) casinos only Predominantly played at B&M casinos (3 or less of their gaming wallet spent online) Predominantly played at Online Casinos (more than 3 of their gaming wallet spent online) Played Online Casinos only The following distribution in the survey sample resulted. Distribution of Survey Responses by Gamer Category B&M casino Predominantly B&M Predominantly Online Total only casino online only % in Group 5 19% 2 9% 10 Demographics Online gamers can be characterized as: Generally younger than the B&M casino-only group with a mean age of 43 versus 51 for the B&M-only gamer. The chart below shows a clear concentration of online play among gamers in the younger age groups, with penetration dropping off dramatically after age 50. This is in stark contrast to the B&M casino gamers where participation increases dramatically from 40 to 50 years old and continues at a high level through the 65 and over group. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 2

6 18% B&M Only Gamers Versus Online and Predominantly Online Gamers % and over Online and Predominantly Online B&M Only Online gamers as a whole tend to be better educated. This is most clearly seen in the predominantly online gamers versus B&M only gamers. Online gamers (partly as a result of being better educated) have higher income. Predominantly online gamers had an average household income of $74,000 versus $61,000 for B&M only gamers. No other clear demographic differences were discernable. Demographics by Game Type-Online versus B&M 1 Both online and at B&M casinos more slot players are female. Thirteen percent more females than males play slots online compared to 5. at B&M casinos. The data suggests that a greater proportion of males play slots at a B&M casino than at an online casino. This is likely due to the emphasis on slots on a B&M casino floor and the proportion of males who visit in the company of female slot players. More males play Blackjack. At B&M casinos 17. more males play Blackjack (59% male versus 4 women), online the difference is only. B&M Blackjack players are slightly better educated and have slightly higher incomes than those who play online. Bingo play online and at B&M casinos is dominated by females by a 6 to 4 margin. 1 This section indicates slightly higher incomes and education for those who play various game types at B&M and online casinos. It is noted that this may appear contradictory to the conclusions in the previous section which compares online only and predominantly online gamers to only B&M gamers. The reason for these differences is in the categories under consideration. In this section we have selected all those who play these games online whether or not they played predominantly online or predominantly at B&M casinos. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 3

7 B&M bingo players are slightly better educated and have incomes which are on average higher than online players. Respondents to our survey who played poker indicated that poker players were primarily male. 6 of B&M poker players were males compared to 5 online. Other Games (which includes roulette, keno, scratch cards, baccarat, craps, Pai Gow Poker, and Caribbean Stud) were reported in our sample as 50. female at B&M casinos with a slightly higher proportion (53.) being female online. Incomes were reported as being higher at B&M casinos than online and education level was slightly higher for B&M casinos. Types of Games Played Online When asked if they played for money, for prizes or free games the following responses were obtained 2 : Overall 6 of respondents who played online played for money and/or free games. 4 played games where you earn points for prizes. 3 played free games only. 2 only played for money games 3 of predominantly online gamers played for money. Predominantly B&M gamers were mostly focused on free games (5) although 1 also reported playing for money games only. All categories of gamers (with the exception of the B&M Only Gamers) in our survey played for money games to some extent. The three most significant reasons people gave for not playing for money online were: personal budget constraints/fears about the economy, integrity of the game/fear of being scammed, and fear of being caught/it s illegal. While all groups cited these top three reasons it was most pronounced amongst B&M-only gamers and predominantly B&M gamers. Legalization would remove the top two reasons people cite for not gaming online, thereby suggesting a dramatic increase in the online gaming industry upon legalization, especially if this should coincide with robust economic recovery. Reasons Why People Play Online The top five reasons given why people play online in order of importance was: ability to play at home/privacy, ability to play anytime, discounts and promotions offered by online casinos, and to make money. The sixth most significant reason, following closely on the heels of the above, was that they did not live close to a B&M casino. Online Play Characteristics With the exception of slots, online gamers and online gamers who play for real money both report a greater level of play (frequency) across all games than the B&M 2 These percentages do not sum to 10 as respondents were permitted to select more than one answer. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 4

8 only players. This could be attributed to two factors. First, those who have gone to the trouble of registering at an online casino site and depositing funds are more likely to be avid gamers and therefore more likely to try different games. Second, there is less social pressure when sitting at home by oneself on a computer, compared to sitting round a gaming table at a casino with other players. The removal of this social anxiety will encourage online players to try out games they might not be familiar with. From a B&M perspective this could be beneficial in that people who become familiar and gained confidence with games online are therefore more likely to try then at a B&M casino. In terms of frequency of play, slots are the most popular game for those who play online for the predominantly B&M category, the predominantly online category and among online players who play for real money. These are followed closely by poker, Blackjack, bingo and then, surprisingly, scratch cards. Poker is played at a greater frequency than slots only among those who play online only. Annual Average Frequency of Play by Gaming Category and Game Type Game Predominantly B&M Predominantly Online Real Money casino online only Only Poker Black-jack Bingo Roulette Keno Scratch Cards Baccarat Slots Craps Caribbean Stud Pai Gow Poker Those in the online only and predominantly online groups spent significantly more time playing than those who also visited B&M casinos. Online the average frequency of sessions in the last 12 months was 12 per month. However, those who predominantly wager online recorded an average frequency of 16, versus predominantly B&M gamers who had an average frequency to online gaming sites of 6. In contrast the average number of visits to a B&M casino was 4.3 per month; surprisingly the groups that played online had a greater frequency of visitation to B&M casinos at 5.8, compared to B&M only players who had an average visit to conventional casinos of 3.2. The most popular games, in terms of the number of respondents who report playing online for money are poker (8), slots (68%), Blackjack (6), bingo (4) and scratch cards (4). Clearly the most popular games at a B&M casino among those surveyed was slots followed by Blackjack and then in distant third poker. For online gamers playing at B&M The Innovation Group National Survey of Internet Users and Gaming Behavior Page 5

9 casinos there was a noticeably greater level of play across a broader spectrum of games with a 20 point greater level of play for Blackjack and poker than other categories of gamers. Online gamers reported a 15 point lower level of play for slots than those who only go to a B&M casino. Online, the average budget per session (amount they were prepared to put at risk) was $175, for predominantly B&M gamers playing online this declined to an average of $63 versus an average of $254 for predominantly online gamers. In contrast the average budget for visits to a B&M casino was $248. However, the average for B&M only players to a B&M casino was $208, compared to $296 for those that played online as well. Although budgets for online gaming are lower than for conventional B&M casinos the frequency of play is substantially greater. The reason for these differences are probably multiple. We believe that the online gambler is a more avid gambler and therefore likely to spend more on a visit to a B&M casino. Also the fact that in general online gamers have higher incomes would lead to a higher gaming budget. The lower per session budget online is due to the higher frequency of play. Branding Clearly, the single most important factor influencing online players to choose a site is the brand, with no group with less than 5 citing this as the most significant factor in choosing a site. 7 said brand was very or somewhat important in choosing an online gaming site. Site branding is clearly important in choosing a site. 5 said that it was the integrity and trustworthiness of the site that makes it their favorite online casinos. This theme of site integrity and trust is consistently emphasized across all groups. The most attractive B&M casino brands for all groups are: Harrah s, Caesars, and MGM. Among online gamers: Hard Rock, Wynn, Hollywood, my local casino and Native American casinos were also cited as brands that are very or somewhat important in terms of likelihood of choosing an online casino (more so than other major casino brands ). Among those who predominantly played at online and at B&M casinos a similar pattern emerges, although for the predominantly B&M casino groups the local casino brand and Native American casino brands were cited as more important than others. A recognizable web site brand is considered relatively more important than a B&M brand although the latter is still of significant importance. The top five non-gaming brands that would influence visitation and play from online or predominantly online players were Visa/MasterCard, Google, Yahoo, Amazon and American Express. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 6

10 In general, B&M only gamers, placed less emphasis on brands than did any of the other groups more familiar with online gaming. Finding an Online Casino 6 of online gamers use search engines to find their gaming sites, with 5 citing word of mouth/friends/relatives. Third is conventional non-internet casino at with 2 (this primarily reflects free play games), followed by 19% who cited advertising in newspapers and magazines. Favorite Online Sites A wide array of sites were reported as favorite with 5 of respondents responding with a variety of sites but all of these garnering less than of the total. of respondents could not remember their favorite online gaming site (which suggests that they are not high frequency committed online gamers). As the chart below shows, the preeminent sites among U.S. internet gamers reported in the survey were, in order: Pokerstars, Full Tilt Poker, Pogo, Worldwinner, Winster, and Pokernet. While these were the most favorite sites among all online gamers there was some variation by gamer category. For gamers who primarily visited B&M casinos, Purepoker and Iwon entered the top five favorite sites, while Pokernet and Worldwinner dropped out of the top five. Pokerstars was clearly the most favorite online gaming site, double the closest competitor in terms of being cited as the favorite online gaming site. Favorite Online Gaming Sites of Total Online Casino Players Other (Less than ) 1 Cant Remember, Don t Have, Undecided Pokerstars.com/Pokerstars.net 5 3 fulltiltpoker.com POGO.COM worldwinner.com winster.com pokernet.com The Innovation Group National Survey of Internet Users and Gaming Behavior Page 7

11 Reasons for Selecting an Online Gaming Site The reasons cited for choosing an online gaming site have a wide range of variability with a number of issues receiving significant responses. However, the most popular reason was Safety and Security/Perceived Trust. Among the significant other responses were: Redemption of Bonus Points, Site Brand, Association with a Conventional Casino, and Discounts/Bonuses/Promotions. This array of important factors suggests that in the U.S., B&M casinos could create web sites that would be competitive given the importance of the above factors. B&M casinos with a recognizable brand, which is trusted, coupled with the ability to redeem player points and discounts /bonuses/promotions at a B&M casino would create a powerful local or regional competitor to major online brands. Reasons for Selecting a B&M Casino The reason respondents choose one B&M casino over another were varied with no clear overwhelming reason emerging. The most significant factors in order of importance were: brand, safety and security of the facility site, how lucky you felt at that casino, slot and table game variety and jackpots and finally convenience or distance from home. Views on Legalization If online gaming were legalized in the U.S., 4 of those who are online and who gamble in some form but not online would then gamble online. Of our sample 6 were in favor of legalizing online gaming with only 9. opposed and 28.9% undecided. Among those groups that spent some portion of their gaming wallet online there is deep support for legalization (in excess of 7). However, among B&M only players while 4 are still supportive of legalization 4 are undecided. This suggests that there is a need to educate the wider public about online gambling. Opinion on Legalization by Gamer Category B&M casino only Predominantly B&M casino Predominantly online Online only Total In Favor of Legalizing Online Gambling in the United States 4 78% Not In Favor of Legalizing Online Gambling in the United States 1 9% Undecided on Legalizing Online Gambling in the United States 4 18% 9% 1 29% Total Generally Democrats (6) were more likely to favor legalization of online gaming than Republicans (58%) but not by a large margin. It is notable that only among the online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 8

12 only gamers did Republicans favor legalization of online gaming at a greater rate than Democrats (8 versus 7). Change in Play if Online Gaming Legalized The table below shows the reported changes that would occur in the level of play at conventional B&M casinos should online gaming be legalized. Those that currently play at B&M casinos only would likely visit B&M casinos less often and spend less. Those that play online but also go to B&M casinos currently, report that their level of play at B&M casino would increase. The data suggests that this would arise primarily through an increase in the number of visits coupled with a smaller increase in the average gaming budget. Those who play online only reported a small net increase in play at B&M casinos. Our belief is that gamers already familiar with B&M casinos would use online gaming as a training ground or as a means to perfect their strategies, or online gaming would act as a source of stimulation of their desire to visit B&M casinos. Those that currently only game online would not be motivated to visit B&M casinos upon legalization. Change in Play at Conventional B&M Casinos if Online Gaming Legalized B&M casino Predominantly Predominantly Online only B&M casino online only Total Significantly or Somewhat More Significantly or Somewhat Less 18% 9% 9% 1 1 Delta % If online gaming were legalized the reported increases in play from those who currently game online at some level would be dramatic with an average increase in level of play of 5. This would be reflected primarily in a significant increase in the number of visits and smaller increase in the level of wagering per visit. We believe this to be an underestimation of the potential effect as this does not account for those that currently are not online at all who, upon legalization, would then be induced to visit online gaming sites. Change in Play at Online Casinos if Online Gaming Legalized Predominantly Predominantly Online B&M casino online only Total Significantly or Somewhat More % 5 Significantly or Somewhat Less Delta 5 59% 3 5 If online gaming were legalized 4 of those that gamble only at a B&M casino would consider gambling online. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 9

13 If Online Gaming Is Legalized What Factors would Influence Your Site Choice The top factor considered important by all categories of gamers in choosing an online site should online gaming be legalized was safety and security and the perceived trustworthiness of the site. Among those that only gambled at B&M casinos, this was followed by site brand, discounts, bonuses and promotions, association with a B&M casinos and ability to redeem player points. For those that predominantly played at B&M casinos, safety and security issues were followed in order by redemption of player points, association with a B&M casinos, player pool and site brand. For those that predominantly played at online casinos, safety and security issues were followed in order by redemption of player points, site brand, discounts promotions and bonuses, association with a B&M casinos, and variety of games. For those that played at online casinos only, safety and security issues were followed in order by association with a B&M casino, technical features of the site, discounts promotions and bonuses privacy and variety of games. Lottery Play While 8 of respondents across all groups indicated that legalization of online gaming would not impact their level of play of state lotteries, a small number indicated that it would have varying degrees of positive and negative impact. The table below presents data from each category of players whether or not they would play less or more. With the remainder having no change in play this would presumably indicate that there is some small potential positive effect on state lottery play particularly if made widely available online. In this regard it is interesting to note that the potential positive impact increases as the level of online play increases across the categories of gamers in the survey. State Lottery: Change in Play if Online Gaming Legalized B&M casino Predominantly B&M Predominantly Online only casino online only Total Significantly or Somewhat More Significantly or Somewhat Less Delta 1 2 Native American Casinos and Online Gaming As a means of focusing on Native American casinos, we selected only those respondents who said they would be somewhat likely or very likely to visit a Native American casino associated online gaming website. While areas such as demographics were largely similar to the survey as a whole, a few key findings are worth mention. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 10

14 7 said that the brand was somewhat or very important in selecting an online casino. This is same the result obtained from the survey as a whole and seven points lower than that obtained for those who predominantly gamble online as a whole. Only 23.8% of those that would likely visit a Native American online website fall into the predominately online or online only categories compared with 31. in the survey overall. Concomitantly, 77. fall into the B&M only or predominantly B&M categories compared to 68.9% for the survey as a whole. 68% of those who said they would likely visit a Native American online gaming web site support legalization compared to 6 overall. The following table provides a comparison of means of current gaming behavior between the overall survey and those who indicated a likelihood of visiting a Native Americanaffiliated online casino web site. As the table shows, while frequency of online and B&M play plus the gaming budget at B&M casinos for those who would likely visit a Native American online gaming site are greater than the survey as a whole, the online budget per session for those likely to visit a Native American casino website is 8. less than the survey overall. Comparison of Play Characteristics between the Overall Survey and those Likely to Visit a Native American Casino Web Site Likely to visit a Native American Casino Web Site Overall Survey Average online visits per month Average B&M casino visits per month Average online budget $160 $175 Average casino budget $283 $248 Those likely to visit a Native American casino web site expect to increase online play by 5 If online gaming were to be legalized; this is statistically the same as for the survey overall (51.). When asked if they would play more, less or the same at a B&M casino upon legalization, this group indicted that there would be no change in their level of play at a B&M casino. We believe that the opportunities outlined elsewhere in this document that pertain to commonly known and recognized commercial casino brands, provided by the legalization of online gaming will also pertain equally to Native American casinos (and other well respected local casino brands). Some of the major Native American brands that are widely known will have the ability to attract play nationally (Foxwoods, Mohegan Sun spring to mind); others such as Native American casinos in California and Minnesota for example will have more regional and statewide appeal. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 11

15 Key Conclusions 1. We estimate that the current penetration of online gaming in the U.S. is in the range of to with the likelihood that it falls in the lower end of this range. 2. Those who gamble online have a greater frequency of play than those who only gamble at B&M casinos and those that have some level of online play visit B&M casinos more frequently that those who only gamble at B&M casinos. (Online the average frequency of sessions in the last 12 months was 12. However, those who predominantly wager online recorded an average frequency of 16, versus predominantly B&M gamers who had an average frequency to online gaming sites of 6. In contrast the average number of visits to a B&M casino was 4.3; the groups that played online also, had a greater frequency of visitation to B&M casinos at 5.8, compared to B&M-only players who had an average visit to conventional casinos of 3.2.) 3. Online, the average budget per session was $175; for predominantly B&M gamers playing online this declined to an average of $63 versus an average of $254 for predominantly online gamers. In contrast the average budget for visits to a B&M casino was $248. However, the average for B&M only players to a B&M casino was $208, compared to $296 for those that played online as well. 4. The key demographic difference between online gamers and those who frequent B&M facilities is age. Penetration of the population by B&M casinos is concentrated in the over 50 year old demographic while online casinos have a greater degree of penetration among the under fifty age group. This has significant implications: a) This differing penetration of the age groups suggests that the impact on B&M gaming if online gaming should be legalized might be less than feared and indeed subsequent questions in the survey seem to suggest that this is in fact the case, with differential age profiles being one reason why this might be so. b) The age differential also holds forth an opportunity for B&M casinos should legalization of online gaming occur. As has been seen there are a number of positive factors which affiliation with a B&M casino contributes to the section selection of an online casino. Through such an affiliation, a B&M casino could not only generate revenues from online play but could induce visitation from this younger online demographic to its B&M casino. Thereby it would ensure itself of an increased pool of younger players as its current demographic ages. This may offer the opportunity for the B&M casino to avoid the woes of the horse racing industry which has seen its core customer become more and more concentrated in the older age groups which by nature decline over time. c) This will only be enhanced by the fact that many online gamers are generally better educated and have higher incomes. 5. Overall 6 of respondents favored legalization of online gaming. The legalization of online gaming has broad support from those who currently gamble online (in excess of 7). Among those who gamble at B&M casinos only, the degree of support is much The Innovation Group National Survey of Internet Users and Gaming Behavior Page 12

16 weaker: only 4 are supportive of legalization. However, of B&M-only gamers (a much broader cross section of the U.S. population), 4 is undecided and 1 opposed. This suggests that the prospects for legislation could be significantly enhanced if the B&M casino industry commits itself to legalization in both form and substance and educates its current customers on the benefits to them. 6. The results of legalization of online gaming will be a substantial increase in online gaming revenues. Those who currently play online in any player category have indicated increases in play in excess of 5. This we believe is an underestimation as it does not account for those that currently are not online at all who, upon legalization, would then be induced to visit online gaming sites. Ultimately online gaming revenues we believe will increase by a factor greater than the 5 suggested by the survey results. 7. The converse to this increase in online gaming revenues is the widely held fear that online gaming would axiomatically result in a decline in B&M casino revenues. A number of indications in this survey suggest that this is far from a proven fact and indeed a modest increase in B&M gaming might equally be expected. Of our four categories of gamers two categories, predominantly online and predominantly B&M, indicate significant increases in B&M gaming rates (26. and 13. respectively). Exclusive online gamers indicated that their level of play would increase only marginally by 2.8%. Only those who exclusively gambled at B&M casino reported a likely decline in wagering at B&M casinos, and a minimal one at that (-1.8%). 8. Two interrelated factors stand out in relation to what makes an online gaming site attractive, either currently or upon legalization. This key factor was safety and security and the perceived trustworthiness of the site. We believe that this factor is intimately bound up with the brand of the site, which was often singled out as being in the top three to five reasons why one site would be favored over another. We believe that brand name and the associated attribute of trustworthiness is king and that brands that have established themselves as being trustworthy, whether they are online gaming sites, B&M casino brands or non-gaming brands, all have opportunities to be successful in the online gaming world. 9. This does not only apply to nationally know casino brands such as Harrah s or MGM, but also to local and Native American casinos. This is especially true in areas of the country where Native American casinos are either the only option or are predominant in the state or region. This would apply to areas such as California and the Native American casinos there, to the northeast where Foxwoods and Mohegan Sun dominate the gaming landscape, or to parts of the Midwest where either local casino or Native American casinos are the primary B&M gaming options. The key for success for these potential The Innovation Group National Survey of Internet Users and Gaming Behavior Page 13

17 operators is to leverage the trustworthiness of their local brand identity into the online gaming space. 10. The survey suggests that online players, or potential online players should legalization occur, would value a relationship between B&M casinos and online gaming sites and a key component in this regard is the ability to redeem player points and receive discounts/bonuses/promotions at a nearby B&M casino. 11. According to the survey results, state-run lotteries are unlikely to be impacted by legalization of online gaming and may in fact realize a small increase in revenues. The Innovation Group National Survey of Internet Users and Gaming Behavior Page 14

18 Survey Results - Charts Demographics 2 Age % % % 8% 8% 9% B&M casino only Predominantly B&M casino Predominantly online Online only and over The Innovation Group National Survey of Internet Users and Gaming Behavior Page 15

19 Gender % B&M casino only Predominantly B&M casino Predominantly online Online only Male Female 7 Marital Status % % % 1 B&M casino only Predominantly B&M casino Predominantly online Online only Married Separated Divorced Widowed Unmarried couple living together Never married The Innovation Group National Survey of Internet Users and Gaming Behavior Page 16

20 Education % % % Less than 4 years of high school Graduated from high school 1-3 years of college Bachelor s degree Masters degree Professional degree Doctoral degree B&M casino only Predominantly B&M casino Predominantly online Online only The Innovation Group National Survey of Internet Users and Gaming Behavior Page 17

21 Annual Household Income All Respondents % Online only 8% % Predominantly online 1 18% 28% 29% $150,000 a year or more $100, ,000 a year $75,000-99,999 a year $50,000-74,999 a year Predominantly B&M casino 9% 9% % $20,000-49,999 a year Under $20,000 a year B&M casino only The Innovation Group National Survey of Internet Users and Gaming Behavior Page 18

22 Other Asian Native American Hispanic Black, non-hispanic 8% Ethnicity All Respondents Online only Predominantly online Predominantly B&M casino B&M casino only White, non-hispanic The Innovation Group National Survey of Internet Users and Gaming Behavior Page 19

23 Political Affiliation % % 1 6. B&M casino only Predominantly B&M casino Predominantly online Online only Democrat Republican Independent Other The Innovation Group National Survey of Internet Users and Gaming Behavior Page 20

24 Demographics by Game Type Age Age - Slots 65 and over % Plays Slots at B&M Plays Slots Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 21

25 Age - Blackjack 65 and over % 9% % that Plays Blackjack at B&M % that Plays Blackjack Online Age - Bingo 65 and over Plays Bingo at B&M Plays Bingo Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 22

26 Age - Poker 65 and over % 8% % Plays Poker at B&M Plays Poker Online Age - Other 65 and over % % Plays Other at B&M Plays Other Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 23

27 Gender Gender - Slots Female 5 5 Male Plays Slots at B&M Plays Slots Online Gender - Blackjack Female 4 48% Male 5 59% Plays Blackjack at B&M Plays Blackjack Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 24

28 Gender - Bingo Female 6 6 Male 38% 39% Plays Bingo at B&M Plays Bingo Online Gender - Poker Female 4 4 Male 5 59% Plays Poker at B&M Plays Poker Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 25

29 Gender - B&M Female 5 5 Male Plays Other at B&M Plays Other Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 26

30 Marital Status Marital Status - Slots Never married Unmarried couple living together 18% Widowed Divorced 1 1 Separated Married Plays Slots at B&M Plays Slots Online Marital Status - Blackjack Never married Unmarried couple living together Widowed Divorced 1 1 Separated Married 5 58% % that Plays Blackjack at B&M % that Plays Blackjack Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 27

31 Marital Status - Bingo Never married Unmarried couple living together Widowed Divorced Separated Married % 58% 58% Plays Bingo at B&M Plays Bingo Online Marital Status - Poker Never married Unmarried couple living together Widowed Divorced Separated Married 19% % 1 58% Plays Poker at B&M Plays Poker Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 28

32 Marital Status - Other Never married Unmarried couple living together Widowed Divorced Separated Married Plays Other at B&M Plays Other Online Education Education - Slots Doctoral degree Professional degree Masters degree 1 1 Bachelor s degree 28% years of college 3 3 Graduated from high school 2 2 Less than 4 years of high school Plays Slots at B&M Plays Slots Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 29

33 Education - Blackjack Doctoral degree Professional degree Masters degree 1 1 Bachelor s degree 1-3 years of college Graduated from high school 1 1 Less than 4 years of high school % that Plays Blackjack at B&M % that Plays Blackjack Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 30

34 Education - Bingo Doctoral degree Professional degree Masters degree 1 1 Bachelor s degree 1-3 years of college 29% 29% 3 3 Graduated from high school 19% 19% Less than 4 years of high school Plays Bingo at B&M Plays Bingo Online Education - Poker Doctoral degree Professional degree Masters degree 1 1 Bachelor s degree 1-3 years of college Graduated from high school 1 19% Less than 4 years of high school Plays Poker at B&M Plays Poker Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 31

35 Education - Other Doctoral degree Professional degree Masters degree 1 1 Bachelor s degree 29% years of college 28% 3 Graduated from high school 19% 2 Less than 4 years of high school Plays Other at B&M Plays Other Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 32

36 Income Income - Slots $250,000 a year or more $200, ,999 a year $150, ,999 a year $125, ,999 a year $100, ,999 a year $75,000-99,999 a year 19% 19% $60,000-74,999 a year $50,000-59,999 a year $40,000-49,999 a year $30,000-39,999 a year $20,000-29,999 a year Under $20,000 a year 8% Plays Slots at B&M Plays Slots Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 33

37 Income - Blackjack $250,000 a year or more $200, ,999 a year $150, ,999 a year $125, ,999 a year $100, ,999 a year 9% 8% $75,000-99,999 a year 2 19% $60,000-74,999 a year $50,000-59,999 a year $40,000-49,999 a year $30,000-39,999 a year $20,000-29,999 a year Under $20,000 a year % that Plays Blackjack at B&M % that Plays Blackjack Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 34

38 Income - Bingo $250,000 a year or more $200, ,999 a year $150, ,999 a year $125, ,999 a year 9% $100, ,999 a year $75,000-99,999 a year 1 2 $60,000-74,999 a year $50,000-59,999 a year $40,000-49,999 a year $30,000-39,999 a year $20,000-29,999 a year Under $20,000 a year 9% Plays Bingo at B&M Plays Bingo Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 35

39 Income - Poker $250,000 a year or more $200, ,999 a year $150, ,999 a year $125, ,999 a year $100, ,999 a year 8% $75,000-99,999 a year 19% 2 $60,000-74,999 a year $50,000-59,999 a year $40,000-49,999 a year $30,000-39,999 a year 9% $20,000-29,999 a year 9% Under $20,000 a year Plays Poker at B&M Plays Poker Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 36

40 Income - Other $250,000 a year or more $200, ,999 a year $150, ,999 a year $125, ,999 a year $100, ,999 a year $75,000-99,999 a year $60,000-74,999 a year $50,000-59,999 a year $40,000-49,999 a year $30,000-39,999 a year $20,000-29,999 a year Under $20,000 a year 8% 8% % 19% Plays Other at B&M Plays Other Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 37

41 Ethnicity Ethnicity Other (specify) (VOLUNTEERED) Other Asian Oriental Native American Black, Hispanic Black, non-hispanic White, Hispanic White, non-hispanic 8% 9% 79% Plays Slots at B&M Plays Slots Online Ethnicity - Blackjack Other (specify) (VOLUNTEERED) Other Asian Oriental Native American Black, Hispanic Black, non-hispanic White, Hispanic White, non-hispanic 8% 8% 8% Plays Blackjack at B&M Plays Blackjack Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 38

42 Other (specify) (VOLUNTEERED) Other Asian Oriental Native American Black, Hispanic Black, non-hispanic White, Hispanic White, non-hispanic Ethnicity - Bingo 1 1 8% Plays Bingo at B&M Plays Bingo Online Ethnicity - Poker Other (specify) (VOLUNTEERED) Other Asian Oriental Native American Black, Hispanic Black, non-hispanic White, Hispanic White, non-hispanic 9% 8% 79% 79% Plays Poker at B&M Plays Poker Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 39

43 Ethnicity - Other Other (specify) (VOLUNTEERED) Other Asian Oriental Native American Black, Hispanic Black, non-hispanic White, Hispanic White, non-hispanic 8% 8% Plays Other at B&M Plays Other Online Political Affiliation Political - Slots Other (specify) (VOLUNTEERED) Independent 3 3 Republican 2 2 Democrat Plays Slots at B&M Plays Slots Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 40

44 Political - Blackjack Other (specify) (VOLUNTEERED) Independent 29% 3 Republican 2 2 Democrat % that Plays Blackjack at B&M % that Plays Blackjack Online Political - Bingo Other (specify) (VOLUNTEERED) Independent 2 3 Republican 19% 2 Democrat Plays Bingo at B&M Plays Bingo Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 41

45 Political - Poker Other (specify) (VOLUNTEERED) Independent 29% 3 Republican 2 2 Democrat Plays Poker at B&M Plays Poker Online Political - Other Other (specify) (VOLUNTEERED) Independent 3 3 Republican 2 2 Democrat Plays Other at B&M Plays Other Online The Innovation Group National Survey of Internet Users and Gaming Behavior Page 42

46 Type of Games Played Games Played at B&M Casino Slots Scratch Cards Roulette 19% % Poker Pai Gow Poker 1 Keno % 1 Craps 1 1 8% 2 Caribbean Stud 1 Blackjack Bingo Baccarat 8% Total Predominantly online Predominantly B&M casino B&M casino only The Innovation Group National Survey of Internet Users and Gaming Behavior Page 43

47 Games Played: Among Online, B&M, and Online Gamers That Only Play for Money Slots 68% 68% 8 Scratch Cards Roulette 19% 29% 2 Poker Pai Gow Poker 1 1 Keno 1 29% 2 Craps % Caribbean Stud 1 1 Blackjack Bingo Baccarat Online For $ Only Online B&M The Innovation Group National Survey of Internet Users and Gaming Behavior Page 44

48 Types of Games Typically Played (Could select more than one) Games where you can earn points for prizes 29% A Combination of Both Free and Real Money Games Free Games Only Total Real money games Only Online only Predominantly online Predominantly B&M casino The Innovation Group National Survey of Internet Users and Gaming Behavior Page 45

49 Reasons for Gambling/Not Gambling Online Primary Reason For Not Gambling With Real Money Personal budget constraints/fears About the Economy Integrity of the game/fear of being scammed 1 18% 2 29% Fear of being caught/it s Illegal 29% Don t Know/Refused No reason 18% Quality of online games offered 1 Lack of personal time to play/demands of family 1 Difficulty placing bets/difficulty getting paid Difficulty opening an account 18% B&M Only Total Online Online only Predominantly B&M casino The Innovation Group National Survey of Internet Users and Gaming Behavior Page 46

50 Top Reason to Gamble Online Ability to play at home/privacy Other (SPECIFY) Ability to play anytime Discounts/promotions offered by online casino sites To Make Money Don t live close to any real casinos Ease of transaction/transferring money To have fun/excitement Easy and convenient to play Total Predominantly B&M casino Predominantly online Online only Ability to meet new friends or to play with friends remotely Technical features of online casino websites Ranking (weighted average with 3 being the highest) The Innovation Group National Survey of Internet Users and Gaming Behavior Page 47

51 Gaming Frequency and Budget % Monthly Online Gaming Sessions in Which Money Was Wagered % % 9% Predominantly B&M casino Predominantly online Online only The Innovation Group National Survey of Internet Users and Gaming Behavior Page 48

52 Average Online Gaming Budget Per Visit Over $1, % $500-1,000 9% $ % $ % 19% $ $ % $ % $ % 39% Don t Know/Refused 8% Online only Predominantly online Predominantly B&M casino The Innovation Group National Survey of Internet Users and Gaming Behavior Page 49

53 Frequency of Monthly Visits to B&M Casino 20 times + 8% times 8% 7-10 times times times Once 18% Predominantly online Predominantly B&M casino B&M casino only The Innovation Group National Survey of Internet Users and Gaming Behavior Page 50

54 Average Gaming Budget Per Visit to a B&M Casino Over $1, % 4.8% $500-1,000 $ $ % $ $ % 1 1 $16-25 $0-15 DK/Refused Predominantly online Predominantly B&M casino B&M casino only The Innovation Group National Survey of Internet Users and Gaming Behavior Page 51

55 Monthly Frequency of Visits To B&M Casino 20 times + 8% times 8% 7-10 times times times Once 18% Predominantly online Predominantly B&M casino B&M casino only The Innovation Group National Survey of Internet Users and Gaming Behavior Page 52

56 Average Time Spent Online Gaming More than 10 hours 6-10 hours Online only Predominantly online Predominantly B&M casino 4-6 hours 8% 3-4 hours hours to 2 hours 29% 3 39% 30 to 60 minutes 2 28% 3 Less than 30 minutes 9% The Innovation Group National Survey of Internet Users and Gaming Behavior Page 53

57 Branding Importance of a Recognizable Website Brand in Choosing an Online Gaming Site 7 Somewhat or very Important 6 79% 7 Neither important nor unimportant 1 19% 28% Somewhat or Not At All Important 9% 1 2 Total Online only Predominantly online Predominantly B&M casino The Innovation Group National Survey of Internet Users and Gaming Behavior Page 54