CLUB8CASINO.com.au

SIMULATED GAMING What Is Social & Simulated Gaming &

Why would land based venues engage in it?

Social & Simulated Gaming

What is Social Casino gaming? ➢ “As a starting point, the concept of paying real money for fake money (free to

play) is hard to fathom for some.” (Macquarie Capital, September 2014)

➢ $3bn+ global market in 2015, growing to $3.6bn in 2016 & over $4bn in 2017

➢ 200m people worldwide are playing Social Casino ‘apps’ mainly on Facebook.com

➢ Why? Casino games, particularly slots, are inherently entertaining

➢ Tiny proportion of players proceed to pay real money for virtual money/goods (2-5%)

➢ NO cash out …

➢ Facebook represents a global platform for easy deployment of Social Casino ‘apps’

➢ Low barriers to entry means there are now thousands of Social Casinos on Facebook

Simulated Gaming™ | Overview

➢ Unique Internet gaming system & services provided to major land-based casinos

➢ Designed for regulated casinos & clubs in regions where real money Internet gaming is

prohibited (Australia)

➢ ay-to-play model, deeply converged with land-based gaming amenities

➢ Rewards program & on-property amenities provide a superior online experience

➢ Developed in 2012 & 2013, to bring land-based operators online before regulation

➢ US casino clients – Foxwoods, Empire City, Parx, ACEP Group – have proven Simulated

Gaming works

➢ Casinos looking to stay engaged with their member database

➢ Maryland Live! Parx Casino, Empire City Casino, US multi-State operator,

(Club8Casino.com.au)

Asia Pacific Social Casino market is growing annually. Simulated Gaming enables the

land-based operator to enter this market with a highly competitive legal offering.

Global Online Social Revenues

WHO IS PLAYING SOCIAL ONLINE GAMING

The Main Players Online Social Casinos

Australia The Local Market

Problem: EGM Participation Rates Declining While online engagement Increases ➢ Study of Gambling & Health by responsiblegambling.vic.gov.au

Findings from the Victorian prevalence study 2014 released Dec 2015

➢ Gaming machine participation (a decrease of 6.24 percent from 21.46 percent in 2008 to

15.22 per cent in 2014)

➢ Betting on racing (an increase of 3.71 percent from 16.40 percent in 2008 to 20.11 per

cent in 2014)

➢ Sports and event betting participation (an increase of 1.15 per cent from 3.96 per cent in

2008 to 5.11 per cent in 2014 (when sport and event betting results for 2014 were

combined as measured in 2008)

➢ The most popular location for sports betting was over the internet (51.98 per cent)

followed by TAB outlets (44.90 per cent) and pubs or hotels (24.49 per cent).

➢ There was also a significant increase in participation in gaming machines online, from

0.32 percent to 1.57 percent (increase of 4.9 times)and an increase in online table game

play from 2008 to 2014 from 1.69 percent to 7.25 percent (4.3 times).

Productivity Commission Report Findings

Considerations Before Moving Online

➢ Club Owned and Operated ➢ Company is owned and operated by Southport RSL, Diggers Services Club, Greenbank RSL, Caloundra RSL,

Caboolture RSL and Currumbin

➢ Find the right system supplier & business partner ➢ Clubs investigated online gaming options for nearly 2 years and travelled to Manila to investigate a Philippines

model and to Macau to further investigate options. During this period other discussions took place with European

and North American providers. Real Money Gaming, Social and Simulated Gaming were all investigated.

➢ The decision to proceed with the selected system provider & the Simulated Gaming option followed discussions

with local regulators & following independent legal advice.

➢ Content is crucial ➢ Modifications to the site continue to be implemented as new content is added and marketing features amended.

➢ Marketing to engage and encourage visitation to existing land based clubs ➢ Ensure marketing services and customer service support supplied are aimed at encouraging land based

visitations and reacquiring lapsed club members.

Considerations

→ The first question to ask: what is the goal?

• Increase property viability

• Increase customer base

• Increase market share

• Secure the future of the club

→ Goal: Engage & Retain current member database

• Engaging with existing customer database

• Many members & visitors already engage or play online with existing illegal offshore providers

• Leveraging the resources a club already has, and implementing content related to social into current

strategies – email marketing, social media, etc.

• Marketing to engage and encourage visitation to existing land based clubs

Ensure marketing services and customer service support supplied are aimed at encouraging

visitations.

→ Goal: Increase geographical reach of brand, build membership & database

• Marketing/ acquisition beyond existing database – SEO, PPC (Google ads), performance marketing

(use of social networks), paid social media ads, offline channels (TV, print, radio, local billboards, etc.)

North American Casino Examples

1. Incremental Income from online

2. Drive visits / fill hotels / casinos

3. On-property real money gaming

1. Incremental Income from online

2. Drive visits / fill hotels / casinos

3. On-property real money gaming

Destination Resort & Casino Locals Casino & Racetrack Locals Casino (Slot Box)

1.Incremental Income from online

2. Drive visits / fill hotels / casinos

3. On-property real money gaming

1. Reverse structural decline -4/5% every year

2. Drive visitation

3. Engage with younger demographic

1. Acquire PA residents before regulation of real money starts intra-State

2. On-property real money gaming (approved)

3. Online income outside of PA

Club Strengths

→ Opportunistic

• Existing Customer database

• Brand strength & customer connection

• Market awareness

• Pre-existing marketing budget

• Existing Rewards Programs

→ Age of digital

• Expansion by leveraging current customer experience

• Ensuring brands are following innovative digital trends

• Increase revenue by implementing new acquisition and retention strategies

• Understanding compliance

Players aged 30+ predominate (75% of social and 82% of real-money)

According to SciGames, player stickiness with social product is high and averages 2 years

Opportunities

➢ Interactive gaming is growing rapidly ➢ Around 8% of Australians gamble interactively. Participation rate has increased from an estimated 1% in 1999.

Australia is estimated to account for 5% of the global online gambling market.

➢ Strong Technological Engagement ➢ Australia has one of the highest rates of Internet penetration and smartphone usage globally.

➢ Market Size is substantial ➢ It was estimated in 2010 that the total value of interactive gambling in Australia was around AUD$1.6 billion, of

which around 60% was spent on prohibited overseas services and the remainder with Australian licensed

services (DBCDE, 2013)

➢ Provide a best practise online gaming site ➢ Ensure RSG, AGE & ID verification & self exclusion systems are in place to ensure consumer & player

protection.

➢ Upgrade to real money if it becomes regulated ➢ Provide governments and regulators a club based real money online gaming option owned and operated by

clubs with high levels of existing probity & regulatory compliance (OLGR).

Club8Casino.com.au | Integrated ‘Online Casino’

Online Member Engagement

Encourage repeat visits OnLine & in Club