Focus INSURED JACKPOTS
be used to cover jackpots for almost any game of chance and even certain skill- related games. For example we have insured jackpots for Lotteries, Bingo, Poker, Slots, Roulette, Blackjack, Keno, Scratch Card and Sports games and promotions...which illustrates why insurance plays a key part in the future of online gaming.
Most existing promotions run by gaming brands are pedestrian and add little value for the player. Running a prize draw on your site offering to give away one holiday to Las Vegas will definitely attract some entries and yes, you will get a winner – but it’s not very exciting and won’t do much for player development, retention or loyalty.
IT’S A RISKY BUSINESS Mitigating the risk of jackpot
wins is the business of insured jackpot experts, PIMS-SCA
Gaming can be a risky business, especially for those starting out in the online industry. Launching new sites and products requires deep pockets – and to attract players, those pockets need to be overflowing not just with cash, but with compelling games, huge jackpots and exciting promotions.
Of course, as in any industry, there are ways that start up companies can get an edge – but in the very serious business of online gaming, there are no easy cheats for those looking to reach the highest levels. And, while it is a risky business, there are ways to manage those risks.
PIMS-SCA are specialists in Promotional Risk Management – which is essentially the insurance of promotions, contests and games. For an insurance premium that is often a small fraction of the amount at risk, a brand or company can insure itself against the possibility of a winning outcome on a game or promotion. If, however, there is a big win....well, the insurance policy covers the jackpot payout.
Jackpot insurance has been used in land- based gaming (especially in North America, where our parent company is based) for decades. This type of insurance has enabled practitioners to run massive prize promotions offering multi-million dollar prize funds, while minimising their financial outlay.
Within this market, these insured jackpot
prizes are predominantly used as part of wider promotional marketing, loyalty and player reward campaigns. The main objectives tend to be to give the brand an edge over the competition and to keep players interested in, and – importantly – loyal to, the brand.
Back in 2000 we decided to take the experience we had developed from working with the big US gaming brands and use it within the online gaming industry. It certainly wasn’t easy to get online gaming companies to accept the principle of using insurance to cover jackpots for both free-to-play promotions and pay-to-play jackpot games – despite the fact that it is now 10 years since we paid out the first £1m prize from a purely online lottery game.
Now, however, there is a burgeoning interest in jackpot insurance, we could even be reaching a tipping point where insuring jackpots becomes the norm! One reason for this is that insurance enables small brands to compete with the big established companies in the jackpot stakes, without necessarily having the player base to support this. With the cost and risk of the jackpot being transferred, the gaming brand can concentrate on creating more compelling products – and the industry benefits from more competition, fresh blood and new ideas.
A number of gaming brands have recently come to market with innovative products and big prizes, all of which started out by insuring their jackpots – and many of which still rely on insurance to minimise their risk and financial exposure.
The advantage of insurance is that it can
MATTHEW BUTCHER,
Sales Director/
Board Director of PIMS-SCA
Matt Butcher,
Director of leading prize insurance
provider PIMS-SCA, has successfully developed the Gaming and Promotional
Marketing areas of the business. His main focus is to create new and long-standing
relationships in the Gaming industry while tailoring unique risk
management solutions to our
client’s individual needs.
Don’t get me wrong. Even big global consumer brands use sales promotion tactics such as the free prize draw (the industry is unfortunately rife with them!) but, knowing how many entries these tend to get, we also know they are not doing much to enhance the brands’ perception with the customer base.
INSURANCE
ENABLES SMALL BRANDS TO
COMPETE WITH THE BIG
ESTABLISHED
COMPANIES IN THE JACKPOT STAKES WITHOUT HAVING THE PLAYER BASE.
With a bit of creativity and a similar budget, a prize promotion with an insurance-backed jackpot could not only offer players multiple chances to win but also, for the game-owner, get players talking about the brand.
How big could it get? Well the biggest ‘jackpots’ we have ever insured – although not in the world of gaming – are the
Grab.com $1 Billion free ‘lottery’ draw back in 2001 and Pepsi’s Billionaire Promotion in 2003. Pepsi picked 200 American consumers to compete for the chance to win a record-breaking $1 BILLION! In the end, nobody did win the big prize – although one winner did walk away with the guaranteed $1 million ‘consolation prize’!
With the unparalleled current interest in
gaming....anyone care to take a bet on how long it will it be before there’s a cool billion up for grabs in the world of the ‘online casino’?
April 2013 PAGE 25
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