G2E Interview with Adam Krejcik from Eilers Research

My interview with Adam Krejcik, from Eilers Research, will give the social gaming view with data and research to support his finding.

Adam Krejcik is a partner at Eilers Research, LLC as well as the firm’s Managing Director of Digital & Interactive Gaming. Eilers Research was founded by Wall Street veteran Todd Eilers in late 2012 and is focused on servicing the gaming equipment, technology, and interactive gaming sectors within the global gaming industry.  The company’s products and services include market research, equity research, and advisory services designed specifically for land based & online casino operators, equipment & technology suppliers, social gaming operators & suppliers, gaming regulators, and investors.

Mr. Krejcik has over 10 years of equity research experience primarily covering the global interactive entertainment industry. He has become one of the authoritative voices on the social casino gaming industry and his proprietary research has been cited by various industry executives. Additionally, he is a regular contributor to various trade publications and a frequent guest speaker at industry conferences. 

 

He shared his report from the GIGSE in San Francisco earlier this year. I found it to be extremely informative. Once I saw Adam was part of the panel discussion on social casino gaming, I knew I wanted to interview him. I was able to catch him for a series of questions 

 

 

1).Casino Operators are using the social gaming platforms with the intent of converting players to real gaming.  Since the conversion rate is low, should the Brick and Mortar casinos try to monetize that market?

“Destination websites” that use a free-to-play platform (i.e. social casino games embedded on site) is a relatively new market and there is very little data regarding the revenue / profit potential. Remember this is separate from social casino game market that exists on Facebook and mobile i.e. DoubleDown (IGT), Slotomania (Caesars Interactive), and Jackpot party casino (WMS), which has already proved to be very large and lucrative market. I believe there is no harm in trying to monetize players on destination websites that offer social casino games, but casino operators should view any direct financial benefit as secondary.

We believe the primary benefits for casino operators include:

1. The site can help you build a database of players whom you can market to when real money gaming is legalized, if real money is not on the horizon it’s still a great solution because it allows you to retain the customers you have today and market to them; you can integrate the site with you player loyalty program and extend your offline brand to online.

2. You can acquire new customers who have never visited your casino, they will play online and you can extend offers to them to drive them to your property (i.e. form of convergence).

 

 

 

2).There is talk of compacting in 2014. Do you foresee it this early?

Personally I do not think we’ll see any compacting in CY14; the big one everyone is watching is NV/NJ, but I think there are just too many hurdles. I believe NJ will be much more focused on just making sure everything is running smoothly next year and a compact would unlikely have that big of a financial impact on NJ iGaming market. The burden really is on NV and it’s much more important for them to figure out how they can improve player liquidity and create a viable industry.

 

3).New Jersey, Nevada and Delaware are the initial participants. What do you forecast as the possible revenue for each market? 

We have the following estimates: New Jersey: $405 million, Nevada: $45 million, and Delaware: $36 million. These estimates take into account, population, per capita GDP, what products will be likely be offered, and whether the market will be ring-fenced.

4).What other states have express interest in I Gaming?

California, Massachusetts, Pennsylvania, Illinois, Iowa, Mississippi, have all shown interest.

5).Your knowledge of social and real gaming is extensive. How long have you been researching this field?

The other head partner and myself each have over 10-years of experience analyzing and covering both the real-money gaming industry as well as the digital & interactive game sector. We previously worked together at a private investment bank, based in Newport Beach, California, but split off and decided to start an independent research firm. Eilers Research was created to provide in-depth market and equity research on the global gaming industry and we are one of the first firms to focus on the convergence between social casino games, real-money online games, and the brick-and-mortar casino gaming industry. We provide corporate and institutional research subscriptions as well as consulting services – for more information please visit   www.eilersresearch.com.

 

I want to thank Adam for his time. I would suggest anyone looking for a consultant should look in his direction. His panel presentation is scheduled for Wednesday at 2pm.

 

 

                             Follow him on Twitter at @akrejcik

 

 

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                                      Follow me on Twitter at @GamingGuyM