Gambling - Opening the Search Engine Spigot - 2nd July 2009

It looks as though Congress may soon be voting on the Payments System Protection Act, which partially decriminalizes online gaming. The Act could have massive implications for online gaming and revenues for search engines, as it would allow search engines to sell sponsored listings to gambling companies.

Looking at Hitwise data, I was surprised to see that Gambling websites are already getting a large chunk of their traffic from search engines and some even from paid search listings.

Casino and Poker websites receive a larger share of their traffic from Search Engines than average. In May, Gambling websites received 27.24% of US Internet visits from Search Engines. Hitwise organizes the Gambling parent category into seven sub-categories. I'll focus on Casinos and Poker in this post, leaving aside Bingo, Sports Betting, Lotteries, Directories and Games for the moment. Casinos and Poker websites received 32.19% and 35.62% of visits from Search Engines respectively. This is above the average for All Categories of websites at 26.247%.

Of that search traffic, Casinos received 87.82% of their search traffic from organic listings in the four weeks to June 20th, 2009 and Poker websites 95.22%. To give you a benchmark, the average for All Categories was 92.63% organic and for Shopping & Classifieds 82.56%. Most of the paid traffic terms sending visits to Casino websites were searches for casino resorts, such as Foxwoods and Atlantis. This leaves huge opportunities for search engines to monetize all of that search traffic I mentioned earlier going to gambling websites.

Looking at the search terms sending visits to Gambling websites, one immediately notices the dominance of branded search terms. The top generic, or non-branded query, is "internet casinos" at #110 among search terms sending visits to Gambling websites in the week to 20th June. Next is "free sports picks" at #135, "free casino chip" at #231, "free bingo" at #238 and "free online slots no download" at #246.

In the UK in October, Google lifted a self-imposed ban on gambling related advertising in the UK. This offers an interesting opportunity for cross-market comparison. Comparing paid search traffic to Casinos and Poker websites year over year (i.e. since Google lifted its ban) we find a fairly marked increase in paid traffic. Casinos receive 20% of their search traffic from paid listings in the UK, up more than two-fold year over year. Poker websites receive 8% of their UK search traffic from paid listings, up more than three-fold year over year.

It will be interesting to see if the search engines decide to allow paid listings on gambling content if the Act passes. It will also be interesting to see how marketers respond in the US and whether we'll see intense competition on paid listings for branded terms. This could certainly help boost revenues for the search engines during a downturn. (Credit: Hitwise)

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