So much for the unified opposition of brick & mortar casinos to internet gaming. Two have hedged their bets in the past week. The tide has turned in the August recess.
<<Harrah's Is Wagering on Web
In Effort to Attract Customers
Casino Firm Hopes to Recruit New Gamblers
With Its Stake in Los Angeles Dot.com
By CHRISTINA BINKLEY
Staff Reporter of THE WALL STREET JOURNAL
The millions of people who enter Web site iwin.com's prize drawings enjoy sweepstakes, beer and bass fishing. Harrah's Entertainment Inc. believes that makes them ideal gambling recruits.
So Harrah's has quietly taken a minority stake in the Los Angeles dot-com (www.iwin.com) as part of a marketing alliance that goes to the heart of the casino operator's Internet strategy: using the Web to seek out new customers.
In coming weeks, the 13 million registered users of iwin and its sister site, Uproar.com, will begin receiving messages from Las Vegas-based Harrah's. The messages will offer them the chance to win prizes in exchange for their e-mail addresses and visits to their nearest Harrah's casino. Harrah's customers also will receive promotions for iwin's site, which has prize drawings but no gambling games. "Harrah's will be infused throughout our site," says Mark Stroman, iwin's former chief marketing executive who recently left amicably after iwin.com Inc.'s merger with Uproar Inc. of New York.
Soon, Harrah's will begin sending promotions directly to the e-mail addresses it collects from iwin customers. The company will focus on people who live in five-county regions around its 21 casinos.
As part of the alliance, which includes taking a "single-digit" stake in iwin, Harrah's Chief Operating Officer Gary Loveman will become a member of iwin's board. "We're trying to tie their umpteen million users and their interest in games and sweepstakes to us," said Mr. Loveman, a former Harvard University marketing professor who joined Harrah's two years ago. Mr. Loveman declined to disclose the value of the investment.
Like most U.S. casino operators, Harrah's has been struggling to find its way in the Internet economy. U.S. casinos are legally restricted from launching online casinos due to federal interstate communications laws and state regulations.
MGM Mirage Inc., Las Vegas, recently announced that it is launching a virtual casino with games but no gambling. And a few small Nevada operators are planning to launch online sports-betting operations that would operate only in that state. But most major casinos have shied away from anything remotely resembling Internet wagering for fear of incurring regulators' wrath.
Prize drawings and sweepstakes such as those offered by iwin, though, aren't considered gambling under the law. Iwin offers chances to win prizes by spending "icoins." Visitors collect icoins by clicking on advertisements -- and the site is programmed to move just slowly enough that visitors are likely to read the ads before moving on. Its most popular game is called Treasure Hunt: People click on ads in a hunt for a prize. "There's a lot of clicking on banners on iwin. That's the beauty of it," says Fred Krueger, the site's self-deprecating founder and chief executive, who jokes, "We specialize in dumb."
Harrah's and iwin met when the dot-com was making the rounds in Las Vegas earlier this year in search of partners.
Harrah's got excited by iwin's descriptions of its own customers as people who would "rather go bass fishing than to the Cannes film festival," as Mr. Stroman puts it. A recent prize drawing for a Cartier watch did poorly, but cheap jewelry is popular, as are pots and pans and towels.
"Bingo," says Rich Mirman, a Harrah's marketing executive. "The demographics are nailed. It's Middle America. And all the preliminary evidence suggests that these iwin visitors are gamers.">> |
