Casino-On-Net Interview

Casino-On-Net Anderson's greatest asset, people who know him say, is a mastery of the most crucial skill in gaming: making each player feel like an esteemed member of some exclusive club.

Part 4 - Meet The Man Behind Casino-On-Net

In Las Vegas it's called "stroking" the customer, and it's done with a stream of freebies, from poker chips to cocktails. Anderson can't pass out cocktails over the Web, but with his background in gaming and hotels, he has a natural instinct for how to relate to his "punters" and keep them coming back, even if they're losing. And he's figured out how to use the power of the Web to forge bonds with players that an offline casino can only dream of.

First he has to find them, which is why Casino-on-Net spends $40 million annually on rich-media Web advertising, more than any company except Hewlett-Packard (HPQ), SBC Communications (SBC), and Microsoft (MSFT), according to Nielsen/Net Ratings. It's also why its key software, which checks response rates to ads on thousands of sites daily so Casino-on-Net can target its spending, is such a critical competitive edge.

Even so, analysts estimate that it costs about $350 to corral a single new player. Holding onto the ones you find is the real name of the game. That's where Anderson's customer reps play a pivotal role, monitoring players electronically and interacting with them by e-mail and sometimes by phone, stroking assiduously.

Casino-on-Net reps go through six weeks of intensive schooling. On a recent training day, recruits from Brazil, Japan, and the Netherlands listen intently as instructor Vahe Baloulian, a former air traffic controller in the Soviet army and a gambling-psychology expert, explains that gamblers spend (that is, lose) an average of $10 an hour online and consider it a fair price. But novice gamblers often lose $100 in minutes and instantly conclude that the game is rigged. That's a problem for Casino-on-Net, because bad experiences travel fast on the Web. The solution, Baloulian tells the class: Give sore losers a one-time $100 bonus and tell them to bet $1 to $3 per hand; they'll spend the next several hours having fun.

"Prolong their pleasure and you create a relationship," Baloulian says.

For clues about how to show customers a better time, company marketers comb a database with detailed betting histories and biographical information for all 7 million people who've visited the site. If a player logs in on his birthday, Casino-on-Net is likely to send out an instant "Happy Birthday" e-mail or a gift of bonus money to gamble with. A player on a losing streak may receive e-mail tips on how to win. The technology also allows Anderson to continuously poll his players for their opinions, and statisticians scour the data to detect any subtle shift in player behavior or tastes. "You can't fly on gut," he says.

The level of personal care Casino-on-Net's technology allows it to lavish on players goes far beyond what offline casinos can provide. Recently, Baloulian had to intervene with a gambler who had dropped more than $20,000 and complained about rigged games. Baloulian's e-mailed response reads in part: "You may disagree with me, but allow me to question your definition of 'misery.'" After giving a minutely detailed breakdown of the gambler's playing history, Baloulian noted that he had spent an average of $10.20 an hour in the casino. "If you treat gambling as entertainment, which it is, I think $10.20 an hour is a fair deal," the message continues. "If you treat it as a source of income, which it can be but most often is not, it is certainly no fun at all."

"People are predisposed to lose," Baloulian later says. "The problem is to convince them they lost fairly." In this gambler's case, it must have worked. He's been logging on again lately.

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