Social Casino: Assessing Opportunities in the USA

The IGF profile publication delves into the US online gambling market, often referred to as the "gold rush 2.0." However, with iGaming legal in only seven states—New Jersey, Delaware, Pennsylvania, Michigan, West Virginia, Connecticut, and most recently, Rhode Island—the excitement primarily surrounds sports betting, argues IGF Special Columnist Lauren Harrison.

Despite strong player demand, there is a lack of political will to legalize iGaming nationwide. This has led players to turn to simulated gaming sites or offshore platforms, where the American Gaming Association estimates that US citizens spend approximately $337.9 billion (£265.85 billion) on online gaming annually.

Unlike offshore casinos, simulated gaming sites are legal in most states. As a result, they are becoming increasingly popular and present numerous opportunities for operators to expand or enter the US market without needing licenses.

IGF explores the world of simulated gaming with Katya Machuganova, Product Owner of GAN's Silverback Gaming. Katya joined GAN in 2020 and quickly advanced to her current role. She studied Digital Media and Video Games and was featured in Forbes Women4Technologies 2023.

– What do we really mean by simulated games, and how are they different from betting casinos?

 – The terms “social casino,” “simulated gaming,” and “lottery casino” are often used interchangeably, but there are some key differences.

Social casinos and simulated gaming are very similar, offering players free slots and table games. Players can purchase virtual chips and tokens to enhance their gameplay, but there are no cash prizes involved. The focus here is on fun and entertainment.

Betting casinos, however, operate a bit differently. Players are typically required to complete tasks—such as creating an account, linking their social media profiles, or logging in daily. In return, they are entered into prize draws. This element of prize drawings has led to increased scrutiny from some U.S. regulators in recent months.

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

 – There are several. Social gaming allows land-based casinos to expand their reach and customer base, offering players new ways to interact online. Since social casinos are free to play and have no cash prizes, operators can run simulated gaming sites in most states without needing to obtain licenses.

This not only provides an additional point of contact with the casino but also introduces players to online casinos and slot machines. If and when the government legalizes iGaming, it will be easier to convert these players to real money gaming, leveraging their experience with social casinos.

Additionally, social casinos enable operators to expand their player database, encourage retail cross-selling, and open up an additional revenue stream. Social casinos can monetize by selling virtual chips that players purchase. 

– Do social casino customers expect a different experience than real money casino players, given that they cannot win money or prizes?

 – It turns out that they do. Simulation games focus on fun, entertainment, and social interaction. Players seek excitement from engaging mechanics, bonus rounds, social features, and captivating themes. Since these games offer a safe experience, the gameplay needs to be dynamic, featuring plenty of power-ups, unique triggers, and rewards—just not cash prizes.

This experience extends beyond the games themselves. Social casino operators must gamify the entire process: rewarding daily logins, setting missions and challenges, and providing spaces for players to interact through live chats, tournaments, leaderboards, and more. Social features like player profiles, avatars, linking social media accounts, and creating clubs and groups are also crucial in fostering the community spirit that social gaming thrives on.

Of course, many of these features can be found in real money casinos as well. However, providing the best possible entertainment experience becomes even more crucial when there is no money to be won. 

– Silverback Gaming has created a portfolio of simulation games. How are they different from your real money games?

 – Our simulated games and real money games often look the same. They use the same themes, design styles, animations, and powerful sound. However, under the hood, they are completely different.

Our simulated games focus on entertainment value. In contrast, our real money games also need to consider the potential for big wins and how those big wins are triggered and delivered. This requires us to spend a lot of time conceptualizing gameplay and fine-tuning mechanics and power-ups to ensure they provide the excitement and entertainment our social gamers are looking for.

– Do your simulated games influence the development of your real money slot machines and vice versa?

– Absolutely. Our simulated games are invaluable for testing the quality of our real money slot machines. We use them to test new mechanics, triggers, features, and themes. This allows us to gauge interest, gather early feedback, and collect performance data.

This information enables us to iterate and improve our games before launching them as real money slot machines and applying for the necessary certifications for our target markets. Ultimately, this means that our real money slot machines are held to a higher standard, having been refined based on feedback from real gamers.

– Does a social casino in the US provide more options than a real money casino?

 – The simulated gaming market in the US is large and poised for further growth, especially in states where iCasino is already regulated, such as New Jersey and Pennsylvania. However, real money games still offer more options.

Operators and suppliers need to be realistic about the current regulatory environment. For many, a social casino is currently the only viable option for offering online slots and table games to players. Social casino operators can reach a much wider audience, extending beyond players in their state, which presents a great opportunity overall. Ideally, social casinos complement real money casinos, but it all depends on regulation.

 IGF Editor's Note:

In the US, where many land-based operators fear online gaming will take over their industry and few states offer legal online casino options, simulated gaming and platforms provide an ideal environment for both traditional American brands and new outside operators to enter the market.

According to Katya, the potential lies in several key areas. Operators can access the US market without needing licenses, which allows them to build brand loyalty early on. This can ease the transition to real money gaming when it becomes possible. Additionally, simulated gaming introduces consumers to online gaming, potentially facilitating a smoother transition to real money gaming. Operators can also create a database of players that can be used to cross-sell other products.

While this might seem straightforward, Katya emphasizes that entertaining consumers through simulated games is more complex and demands more from developers. These games may look similar to real money games, but they require significant mental and financial investment to keep consumers interested, as the focus is on entertainment rather than prizes.

Despite the creative challenges, entering the free-to-play gaming sector has other benefits. It provides an ideal testing ground for new game concepts, mechanics, triggers, and themes. For developers who also create real money games, this allows them to refine their products based on feedback before releasing them to the casino.

So, what is the balance of simulated games? If you're willing to put in the work, get creative, and develop games that get players' hearts racing, you're all set!