Spectrum SIGHT White Paper Spectrum SIGHT White Paper June 2017 final | Page 2
Implications of Evolution of Online Gaming in United States
In 2002, Spectrum Gaming Group developed a ground-breaking theory to project how
land-based gaming and online would eventually converge: The Spectrum Internet Gaming
Heuristic Theorem (SIGHT). At the time of its initial development, we based the theorem on a
confluence of related occurrences:
1. The brick-and-mortar gaming industry will abandon its rejection of Internet gaming
and ultimately accept, adopt and embrace it.
2. In doing so, the industry will develop new business models that harness the
Internet as a chief marketing tool to identify, cultivate and reward customers.
3. The entrance of land-based casinos, armed with brands and an array of licenses,
will alter the face of Internet gaming, and render nearly all past and present
revenue projections as obsolete.
At that time, online gaming did not exist in the United States. Fifteen years later, we
have some experience to help elaborate, update and expand this theory. With that in mind, the
2017 version of SIGHT adds the following findings:
1. Land-based casino operators, as projected, are moving along the continuum from
rejection to acceptance to embrace, and are presently in the early stages of a full
embrace. Indeed, those land-based operators that have ventured into online are
clearly in the “embrace” mode.
2. Public policy can be best advanced by ensuring, to whatever degree is practical and
politically possible, that land-based casinos be the primary operators and/or
beneficiaries of online gaming.
3. Online gaming will help capture a different demographic than the traditional land-
based casino customer base, including a new cohort of younger adults who can be
effectively encouraged to visit land-based casinos.
4. Online gaming will, for the most part, not cannibalize land-based spending. Indeed,
the evidence indicates that existing land-based customers who also wager online
will ultimately increase their land-based spend.
While such findings might seem counter-intuitive, they are supported by actual results
and assumptions that led to our original thesis in support of SIGHT:
People are hard-wired to enjoy games of chance and to take reasonable risk,
regardless of the decade in which they were born.
th
Observing 15 Anniversary of SIGHT
2