Assessing The Social Casino Opportunity, With Silverback Gaming

The online US gambling market has often been hailed as the “gold rush 2.0.” But with 360 iGaming still only legal in seven states–New Jersey, Delaware, Pennsylvania, Michigan, West Virginia, Connecticut and, most recently, Rhode Island–this has only held true for sports betting, writes Lauren Harrison.

Despite the demand from players, there is a lack of political motivation to legalise iGaming, resulting in players turning to simulated gaming sites or offshore sites, where the American Gaming Association estimates that US citizens spend some US$337.9 billion (£265.85bn) on casino games annually.

In contrast to offshore casinos, simulated gaming sites are legal in most states. As such, they are becoming increasingly popular and provide numerous opportunities for operators to expand, or enter the US market licence-free.

Today, we’re diving into the fascinating world of simulated gaming with Katya Machuganova, Product Owner at GAN’s Silverback Gaming.

Katya joined GAN in 2020 and has since risen through the ranks to Product Owner. She studied digital media and video games and was featured in Forbes Women4Technologies 2023.

Don’t miss out on her insight:

What do we actually mean by simulated gaming, and how does it differ from sweepstakes casinos?

“The terms social casino, simulated gaming and sweepstakes casino are used interchangeably, but there are some important differences between them.

“Social casino and simulated gaming are incredibly similar and offer free-to-play slots and table games for players to enjoy. Players can also purchase virtual chips and tokens to enhance their play, but there are no monetary prizes up for grabs. Fun is the name of the game here.

“Sweepstakes casinos are a little different. Players are encouraged to undertake certain tasks–for example, create an account, link their social media profiles, log in each day–and in return they receive an entry into a prize draw. It’s this prize draw element that has seen some US regulators clamp down on sweepstakes casinos in recent months.”

What opportunities does simulated/social gaming provide operators in the US?

“There are several. Social gaming is a great way for land-based casinos to extend the experiences they offer players to the online realm for the first time. Because they are free to play with no monetary prizes, operators can launch simulated gaming sites in the vast majority of states without having to secure licences.

“This not only provides an additional touchpoint with the casino, it also familiarises players with online casino and slot play. If, and when, the state legalises iCasino, it’s easy to transition these players to real-money if that’s something they want to explore.

“In addition, social casino is a great way for operators to expand their player database, drive cross-sell to retail and open up an additional revenue stream. Social casinos can monetise through the virtual chips that players purchase.”

Do social casino players expect a different experience from those at real-money casinos, given that they can’t win money or prizes?

“They do. Simulated gaming is all about fun, entertainment and social interaction. Players want to enjoy games that have thrilling mechanics and exciting bonus rounds, social features and captivating themes. As these games offer a risk-free experience, the gameplay itself must get the pulse racing and this means plenty of bonuses, unique triggers, progression and rewards. Just not monetary prizes, of course.

“This goes beyond games. Social casino operators must gamify the entire experience, from rewarding daily log-ins to setting missions and tasks; while also providing space for players to interact through live chats, tournaments, leaderboards and more. Social features such as player profiles, avatars, linking social media accounts and creating clubs and groups are also important to help foster the community spirit that social gaming thrives on.

“Of course, a lot of this can–and should–be found at real-money casinos. But the need to deliver a peak entertainment experience is that little bit more important when there’s no money to be won.”

Silverback Gaming has built a portfolio of simulated gaming titles. How do these differ from your real money games?

“Our simulated gaming and real-money games often look similar. They take the same themes, have the same design style and animation and boast the same powerful sound. But under the hood they are quite different.

“With our simulated gaming titles, entertainment value is the main focus; whereas with our real-money games, we also need to consider the big win potential and how those big wins are triggered and delivered. This means we spend a great deal of time conceptualising the gameplay and fine-tuning the mechanics and bonuses to ensure they deliver the entertainment that social players are seeking.”

Do your simulated gaming titles influence the development of your real money slots and vice-versa?

“Our simulated gaming titles are an invaluable tool when it comes to testing the quality of our real-money slots. We use them to trial new mechanics, triggers, features and even themes – and then gauge interest, gain early feedback, and gather data on performance.

“This information then allows us to iterate and refine our creations before we launch them as real money slots and apply for the various certifications we need to make them available to our operator partners in the markets we target. Ultimately, this means that our real-money slots are of a much higher standard as they have already been refined based on real player feedback.”

Does social casino present a bigger opportunity in the US than real-money casino?

“The simulated gaming market is significant and is primed for continued growth – especially in states where iCasino is already regulated, such as New Jersey and Pennsylvania. But real-money gaming still offers a bigger opportunity.

“However, operators and, indeed, suppliers need to be real about the current regulatory landscape. And for many, social casino is the only viable option for offering online slots and table games to players at this time.

“Of course, social casino operators can reach a much wider audience–beyond players in their state–, which means it’s a great opportunity in its own right, as well as being highly complementary to real-money casino, as, and when, regulations allow.”

Editor’s Note:

In the USA, where many land-based operators fear online gaming will cannibalise their industry, and few states offer legal online casino options, simulated games and platforms provide the perfect vessel for both traditional US brands and new external operators to get in on the game.

According to Katya, the potential comes in the form of licensee-free entry to the US market, building early brand loyalty, the chance to introduce consumers to online gaming (which can later ease the transition to real-money gaming as and when it becomes a legal opportunity), and the chance to build a player database that can be used to cross-sell other products.

While it might sound easy, Katya points out that entertaining consumers using simulated games is more complex and demands more from developers. These games may look similar, but they require more to keep consumers engaged because the focus is on entertainment rather than prizes.

Despite the creative challenges, launching into the free-to-play games sector also has other benefits, as it provides an ideal testing ground for new game concepts, mechanics, triggers, and themes. For developers also creating real money games, this allows refinement based on feedback before rolling out titles to paying audiences.

Where does the balance sheet stand on simulated gaming? You’re all set if you’re willing to do the work, get creative, and make titles that’ll get players’ hearts racing!

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