Lee Terfloth and Resorts are Blazing New Trails in Online Gambling

Lee Terfloth, Director of Interactive Product at Resorts Digital, talks about how Resorts is leading the way into new iGaming verticals.
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Online gambling years are like dog years. Every year you are in it is like seven compared to a regular job.

Even though he says he “kind of fell into the industry,” Lee Terfloth, Director of Interactive Product at Resorts Digital, confesses to having been captivated since his teenage years by the fast-paced, constantly evolving nature of online gambling.

Starting Out: The Early Years of Online Poker

“Online gaming years are like dog years,” states Terfloth. “Every year you are in it is like seven compared to a regular job.” Terfloth’s first regular role in the nascent sector was part of a three-person customer support team for Las Vegas At Home back in 2003. After a short while, though, he upped sticks and relocated from his hometown Vancouver to sunny Costa Rica.

In 2006 – the apex of the poker boom in North America and Europe – he made the decision to become an online poker product consultant, advising operators on how to develop innovative product enhancements. Yet it was always Terfloth’s ambition to eventually move to the US from Costa Rica if and when online gambling was regulated at either federal or state level.

Onward and Upward – US Regulated iGaming

In the end, Atlantic City’s Borgata Hotel Casino enlisted Terfloth’s services in 2013 in preparation for New Jersey flicking the switch on igaming towards the end of that year. He oversaw the launch and management of Borgata Online Poker for 12 months before making the move to Resorts Casino Hotel on the city’s iconic boardwalk and assuming his current role. From his base inside Resorts – the first Atlantic City casino property to open in 1978 and the first to offer legal casino gambling outside Nevada – Terfloth manages a team of eight tasked with customer and VIP relationship management, and day-to-day casino management.

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This close-knit team is essentially responsible for two online casino sites: Resorts and Mohegan Sun (Resorts is a Mohegan Sun property). Both casino sites launched in 2015, and the digital team immediately set about trying to reel in their competitors who had stolen a march with prior unveilings of casino sites. And that determination and hard work paid off when Resorts Digital fended off stiff competition to land the prestigious EGR North America Operator of the Year award for 2016. In fact, it was back-to-back wins for Terfloth, having also scooped the same award in 2015 while with Borgata.

Our Interview

To hear more about Resorts Digital’s operations and his thoughts on igaming’s hitherto progress in the Garden State, NJ Online Gambling sat down with Terfloth for an interview. 

NJOG: As Director of Interactive Product at Resorts Digital, what does your role entail exactly?

Lee Terfloth: “I manage the product side for both ResortsCasino.com and MoheganSun.com. I also oversee the CRM (Customer Relationship Management) team, who are responsible for the lifecycle of the player after they have converted, and I oversee the VIP team responsible for keeping our good players. And I also handle the operation management of the casino itself. So various aspects of the business report to me.

As well as that, I personally designed the software for a new site we recently launched called FastPick, which will be a daily fantasy sports site against the house. It’s the first fantasy sports site launched by any regulated casino and was released just last week. One reason we are launching this product is because a lot more states are open to fantasy sports than online gaming.”

NJOG: With iGaming being a 24-7, 365-day-a-year business, are you almost always on call?

LT: “Yes. When things break, such as the site being down or games not working, it’s a case of dropping everything no matter where you are because you’ve got to get moving.”

NJOG: Resorts is unique in having an iGaming Lounge at its Atlantic City property whereby patrons can sign up and play online. How has this facility been helpful with introducing land-based visitors to online gaming?

LT: “It’s been a real asset for us. Obviously it’s hard to find differentiation in this market, but we are fortunate to have an excellent relationship with our brick-and-mortar team and were able to utilize part of the floor to sell online gaming. We were able to convince the brick-and-mortar team at Resorts that we needed a place to educate customers, and it’s worked out really well.

“We basically took the Apple Store approach with a clean, tech-looking design. We have dedicated staff in there helping people to sign up online, and we have some big tabletops that you can play games on. But it’s all about education about online gaming. We were actually surprised because we never thought people would just want to sit in the lounge and gamble when there is a great gambling property around them. But there is a certain demographic that gravitates towards that room and wants to play in there.”

NJOG: Do many tourists tend to sign up via the lounge, play online and then disappear once they leave Atlantic City and go home?

LT: “It’s no secret that New Jersey is a bit of a tourist state in the summer. So in the summer months we do see an influx of out-of-state customers who come in and register and play from July to September.”

NJOG. “After a slow start in late 2013, casino is performing well for most operators with almost $19m in revenue for May across the board, which compares with $4m for the first full month in December 2013. Why did online casino take time to gain momentum?

LT:Payment processing is still an issue and that’s the reason we all struggled so much in the beginning. In fact, there were three major issues. First, people didn’t want to provide their social security number, although the adoption of four-digit SSN changed this market dramatically. When I was at Borgata we were full nine digits and that was difficult. Second, geolocation was a problem in the beginning. When I was at Borgata, geolocation was so new that people couldn’t geolocate in the upper floors of the Borgata Tower because it was too far away from wireless access points, so they couldn’t triangulate. But again, the biggest issue has been payments. Getting the new MCC [Merchant Category Codes] two years ago helped. The adoption from the banks has been slow, but we are getting there and are seeing a lot of growth and opportunities in the payment processing market.

NJOG: So how much further growth is possible in New Jersey?

LT: “There is a lot of growth remaining; we are still scratching the surface with this market. A lot of operators are still running very basic products, and there are only have two sites that have live dealer [Golden Nugget and Betfair]. There a lot more verticals that can be added, and we are looking to introduce virtual sports.”

NJOG: You mentioned live dealer, so is this something you will be looking to roll out?

LT: “Absolutely. It has done an incredible thing for Golden Nugget, and I have no idea what it’s doing for Betfair but it’s still quite early. But we want to consider all verticals, and we definitely think that live dealer is an important part of the player experience.”

NJOG: One online casino boss recently told us told us player loyalty and lifetime value (LTV) is particularly high in New Jersey. Would you go along with that?

LT: “Resorts and Mohegan Sun customers are very loyal. Some of our most valuable customers signed up in 2015, and we have had some very loyal players. And we have had a great crossover from the brick-and-mortar, which has helped out immensely. However, I think the decline of poker has been surprising. Having previously run BorgataPoker.com, it’s quite disappointing to see the entire poker market is doing only slightly more [revenue] than what we were doing monthly when I was there.”

NJOG: What’s to blame for poker flat-lining in New Jersey? 

LT: “I don’t know if anyone is taking any risks anymore with the products and going after major guarantees. It was nice to see PokerStars do SCOOP [Spring Championship of Online Poker], as that was a good thing for poker and you saw a big bump that month. It’s unfortunate to see that poker has declined so much in the state. I hope additional states and subsequently compacts do come online soon, that will really help poker.

NJOG. There are now more than a dozen authorized casino sites operating in NJ, while MGM is set to launch a casino site later this year. Are you worried about all this competition?

LT: “We definitely pay attention when there is a new entrant in the market. MGM obviously has a tremendous brand and a lot of opportunity to cross-sell, so it’s something that we are keeping a close eye on. And Hard Rock is launching sometime next year – they are a huge brand and are going to spend upwards of $550m on revamping the Taj Mahal, which will generate a lot of buzz. If they bring a solid online product offering, I think they could be really scary.”

NJOG: Is NJ approaching saturation point in terms of the number of igaming sites it can realistically support?

LT: Well, we had SugarHouse introduced late last year and didn’t see any decline. We launched late ourselves, and there was no cannibalization; there was just an uplift. Obviously there will be a saturation point at some time, but I don’t know if we have hit that yet.

NJOG: Is the message that online gambling is legal, regulated and safe in New Jersey still not getting through to the public?

LT: No. I still think education is important, and it would have been nice if we as an industry had gotten together and created a group message announcing that online gaming is available in New Jersey now. But we didn’t, although we still see significant sign ups and first-time deposits coming in, and this year has been our largest growth year from both a revenue and acquisition standpoint. So I don’t think we have hit a saturation point.

NJOG: You mentioned you recently launched FastPick, can you tell us about it?

LT: “FastPick recently launched in New Jersey and will launch in more states soon as a Daily Fantasy Sports product that is guaranteed to take the market by storm. Players select between three and ten match ups, decide how much they want to risk for their entry, and if they get their selections right, they can win up to $5,000 for only a $10 entry. As I mentioned, differentiation has been hard to find in this market, so we have spent a lot of time trying to find a new and innovative product. We really think we’re going to hit a homerun – pun intended – with FastPick.”

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