Online casinos strive to rise above marketing constraints

As the internet continues towards adolescence, rules are constantly being examined, challenged, and re-examined.

As the internet continues towards adolescence, rules are constantly being examined, challenged, and re-examined.

This evolution is particularly apparent in online casinos, most of which are based offshore or sanctioned by Indian gaming commissions. The legality of such entities is immersed in a multi-year debate. Regardless, half of the revenue from online casinos comes from the United States, according to research firm Christiansen Capital Advisors (CCA).

One of the traditional routes of marketing, advertising in mainstream print and broadcast media, has been shut off due to interpretation of the Federal Wire Act and a letter sent to broadcasters by the Department of Justice in 2003, which warned them against accepting advertising from online casinos.

It is a discriminating atmosphere, but with 2,000 gaming website vying for revenues expect to reach $9.8 billion in 2005, according to CCA, it's crucially important for online casinos to get their name above their competitors.

But the media has shied away from covering the burgeoning industry, according to Richard Laermer, CEO of RLM PR. His agency has represented six online gaming sites in the past, including Casino.net and Beverly Hills Bookie. He says he actively pitched stories to a weary media. Radio stations would precede interviews with disclaimers that they did not condone using the sites. Other outlets would only talk to the head of a parent company that owned a gaming site. Now, according to a March 2 Wall Street Journal article on internet gambling, some outlets will only accept advertising from gaming websites that don't allow actual gambling.

Laermer says he pitched stories about statistics that showed how people could win easily on online gambling and how more women were using online gambling than men. He had users willing to profess how they felt going to a casino was a waste of time, money, and effort compared to online offerings.

"We were talking about news," Laermer says. "But journalists didn't know if they should do stories on it. A lot of reporters at large dailies didn't want to be seen as promoting [online gambling]."

But one gaming website discovered the Trojan horse to the news pages: purchasing odd products. Golden Palace has led innovation in the online casino marketing arena, by purchasing advertising space on boxes, model's cleavage, and pregnant women's bellies, as well as buying oddities on eBay.

Drew Black, marketing director for Golden Palace, says the strategy was crafted to get ink. The novelty approach, he explains, does much more good than harm to endear potential users. Black says that even though the marketing strategy might turn people off, they know that it's not a fly-by-night operation. Name recognition is useful if potential gamers have concerns about rigged games or specious businesses. Golden Palace has been around since 1997, which he says adds legitimacy.

"They've seen your presence, and they know you're not some guy in the basement," Black says. "They think, 'I've seen these guys;' it [alleviates] some of their concerns."

However, Black concedes that name recognition isn't the only reason gamers go to a particular site.

"People like to play at a site that has certain colors or music," Black says. "And if they win at some particular place, they'll stay there."

Black says that the reach of media exposure is more important than what the article is about.

"People ask, 'How do you spend $20,000 on a sandwich?'" Black says, referring to its eBay purchase of a grilled cheese sandwich that some said bore the likeness of Virgin Mary for $28,000. "You couldn't buy the press we received for that."

He adds: "It's water cooler talk and people are talking about it more than they would have had they seen an advertisement."

Jeremy Pepper, president of "vice-related" PR firm MSPR.biz, said Golden Palace's approach doesn't surprise him.

"Online casinos are in a weird space because not many companies will take money from them," Pepper says "[That lends them] to do grassroots marketing."

But he added that a casino doesn't need to pursue publicity just for the sake of it.

"There are ways to present a casino in a positive light beyond Golden Palace buying all of those items," Pepper says.

He explains that it's entirely possible to come across as a highbrow casino and sponsor events without resorting to gimmickry.

"You're not going to sponsor a pub crawl," Pepper says. "You have to present yourself as classy."

Despite the ubiquity of Golden Palace in the minds of the public, Black says the company doesn't get a lot of praise for its marketing strategy. But he adds that he'd rather have more visits to the website and Jay Leno mentioning the company's name than he would getting awards for its creativity.

Golden Palace is also involved in a lot of charitable campaigns, but even those have a gimmicky feel to them. It purchased, via eBay, a soccer ball that was used in England's loss in the European championship. The company is now touring around Europe with the ball, giving people the chance to win money if they can score a goal with it. Black said the proceeds from the tour goes to charity. It also purchased the URL Tsunamirelief.com, from a Canadian college student, for $10,000, which reports have said was donated to the effort. The company also sponsored 36 year-old Raymond Sabbatini, who was diagnosed with Multiple Sclerosis in January of 2003, participate in the annual Running of the Bulls festival with Dennis Rodman.

When these charitable initiatives do get some exposure, Black says it's a win-win situation, and that all of the charities are receptive.

"They love the fact we're able to bring awareness to their cause," Black says.

An agency head, who is currently in a pitch to represent an online casino, says he talked to an organization he thought might be squeamish about potential sponsorship, and it had no problem. This CEO is pitching a traditional, localized PR strategy for the particular casino.

But the scope Golden Palace's good deeds will not outpace its novelty marketing. People have taken to directly address GoldenPalace.com on auction sites, begging for it to make them the next headline.

"Once you get the notoriety like [buying] the grilled cheese sandwich, people try to get your attention," Black says.

Other companies facing the non-traditional gambling market are still looking towards traditional media outreach.

John Radewagen, VP at The Hoffman Agency, said he had initial qualms about getting involved with a company connected to gambling. Hoffman represents Interactive Systems Worldwire, NJ-based technology company that enables televisions to provide interactive gambling. The system is currently in use by the UK's Sky Television, through its BSkyB channel, where sports viewers can make bets based on constantly updated odds. For instance, someone watching soccer can make a bet whether his or her team will be the first to score a goal versus the other team.

But Radewagen's concerns were allayed by BSkyB's service, which he says was meant to be an add-on entertainment feature to watching a sports contest, as opposed to a conduit to high-stakes gambling.

"You think of this as a slot machine, where you sit down and throw in your roll of quarters," Radewagen says. "You don't lose that much when you're betting $5 or $10 at a time."

Radewagen says the US generally doesn't allow gambling on interactive TV, although EchoStar customers can bet on horse races on their sets, but he says that the right pieces are aligned for the practice to come to the US.

Hoffman and the company talked with Reuters, Dow Jones, and TheStreet.com, but since the technology was only being employed in the UK, there was limited pick-up.

"We didn't get [coverage] as broadly as we would have liked," Radewagen says, adding that his next step is to start pitching a trend piece to the long-lead time business publications like Forbes, Fortune, and BusinessWeek about how this transition the BSkyB-type situation may find its way to the US. While Radewagen concedes that the press and the public may take his pitch as the opening of Pandora's box, he thinks it is in his client's best interest to take that chance.

"If I don't take the chance, it doesn't do my client any good," Radewagen says. "Negative coverage will not do me any worse than no coverage. If I can get five paragraphs [for my client] in a longer piece, then I've done my job."

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