Spectrum SIGHT White Paper Spectrum SIGHT White Paper June 2017 final | Page 11

Note that while New Jersey gains the benefit of tax revenue from all such sites, all sites
do not all produce the same desired results. For example, SugarHouse – which maintains a site
under the Golden Nugget license – also has a brick-and-mortar casino in Philadelphia area, just
west of the New Jersey border. SugarHouse, owned by Rush Street Gaming of Chicago, has
leveraged its brand to help drive business to its property, and is also uncovering the same
demographic benefits noted by New Jersey operators: “Our online players in NJ are, on
average, 8 to 10 years younger than those players visiting SugarHouse’s physical facility,” said
Richard Schwartz, President of Rush Street Interactive. 12
We suspect that New Jersey lawmakers did not anticipate that their online gaming
efforts would boost attendance at casinos in other states, but that is not an inconsequential
consideration. Going forward, states need to consider such consequences, which may or may
not have been anticipated. If they allow other brands to provide online gaming, should the
states consider whether or not there is a land-based consequence, or simply leave that to the
operators?
The benefits of a multi-channel operation was made in greater detail when Schwartz
testified on March 7, 2017, before the Pennsylvania House Gaming Oversight Committee:
We believe that, if implemented properly, online gaming represents a unique opportunity to
increase the financial performance of the brick-and-mortar casinos in Pennsylvania , while at the
same time generate significant licensing fees and tax revenues for the Commonwealth. First,
while there’s much discussion about market saturation and competition for a limited pool of
gamers and limited gaming dollars, there is compelling evidence that online gaming helps to
attract new players to the casinos, the land-based casinos.
SugarHouse’s online gaming partner in New Jersey is the Golden Nugget in Atlantic City, and
they’ve been operating online for over three years. Specifically, for the first 35 months since the
Golden Nugget launched its online casino in New Jersey, only 8 percent – I say 8 percent of its
online players were active at the Golden Nugget in the 12 months prior to signing up for an
online account. So 92 percent of these players were not active at that property for a year before
they signed up for an online account. The fact that online gaming is attracting a different
demographic than land- based casinos validates why we believe online gaming represents a
compelling marketing tool to acquire new players into the gaming industry. The next point I’ll
address is the younger demographics.
The brick-and-mortar industry has focused in recent years on attracting millennial players. As it
turns out, Internet gaming is an effective way to attract younger customers who are looking for
a different gaming experience than their parents. As some of you may know, again, through a
partnership with the Golden Nugget in Atlantic City, the SugarHouse brand has been operating
online in New Jersey through the PlaySugarHouse.com branded website for the past six months.
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“Making Waves: Our Interview with Rush Street Interactive chief Richard Schwartz,” iGaming Business North
America, Issue 30, p. 27.
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Observing 15 Anniversary of SIGHT
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