Want Your Online Gaming Venture to Prosper? Put 'Trust' in It to Grow

5 March 2002
Men are able to trust one another, knowing the exact degree of dishonesty they are entitled to expect.
     --Stephen Leacock (1869 - 1944), Canadian author and educator.

Despite the overall downturn in dot-coms, Internet gaming is one of the few online businesses that shows no sign of looking back. From the time when the first online casino went live in 1995, the ranks of e-gaming Web sites have swollen exponentially. There were between 600-700 Internet betting sites in the year 2000; this number doubled to between 1,200-1,400 in 2001. A study by Data Monitor indicates that online and iTV gambling will balloon to a £15 billion industry by 2005 in the Europe and United States alone. Companies such as Crown Games are expanding into Asian markets to capitalize on the gambling craze in these countries. Making online gaming available to previously inaccessible markets can only further accelerate growth in this nascent industry. The bottom-line success of many gaming ventures has dispelled the idea that it is nearly impossible to make a profit with online ventures. Ladbrokes, one of England's biggest and oldest players in the betting business got into the online game just two years ago. The company turned a profit last July and currently boasts a registered base of more than 250,000 customers from 170 countries.

Research data on Internet customers in general and on Net gamblers in particular suggest that trust is the most important criterion driving online shopping. Advertising Age cited a 1998 study by Maddox suggesting that the No. 1 reason given by those who had not made purchases online was security. The 2000 report on online gambling and lotteries, produced by www.consult.com.au, states that while 10 percent of all Net users are potentially interested in gambling online, eight out of 10 of those interested are concerned with security, fraud, and download times. Similar findings emerge from research by The River City Group in which 78 percent of those surveyed for its "Gambler Monitor" report ranked "security of financial transactions and credit card numbers" as the most important criterion determining punter patronage.

While trust is an important determinant of any customer relationship, its antecedents and manifestations are quite different within the Internet domain. To proffer a gaming Web site with trustworthiness, we need to first understand what trust is and how people formulate their opinions of trustworthiness.

Trust, as defined by Blau (1964) and Rotter (1967), is "the belief that a party's word or promise is reliable and a party will fulfill its obligations in an exchange relationship." Similarly, Morgan and Hunt (1994) define trust as "one party having confidence in an exchange partner's reliability and integrity." Research by Reichfield (1994) and Morgan and Hunt (1994) indicates that trust is a key component in the development of customer relationships.

Other studies conducted in brick-and-mortar contexts suggest that three variables enhance trust in a relationship: personal integrity, upheld promises and foregone opportunistic behavior (cf. Frazier, Spekman, and O'Neal, 1988).

A study of salespeople by Beatty, et al. (1996) indicates that high performing salespeople place more emphasis on establishing trust between themselves and their clients than do lower performing salespeople. As evidenced by the findings of these and other studies, trust is largely based on past experience of the buyer.

The extant literature fails to examine the factors that imply trustworthiness of a seller prior to purchase. These factors signaling a priori trust are the ones driving trust in Internet gaming.

Unlike "experience-based" trust factors discussed in past research, trust factors as they relate to on-line gaming will be largely "cue-based" (cf. Warrington, Abgrab, and Caldwell, 1999). A trust cue "would include any outward symbol that exists prior to the exchange which would indicate to a customer that a marketer is trustworthy." It is imperative that we understand the determinants of cue-based trust. Warrington et al. observes that trust cues in the realm of the Internet consist of name recognition, professional appearance of Web sites, privacy and security policies, availability of company address and contact information, and references and testimonials from existing customers. We will briefly explore each of these trust cues in order to comprehend what they mean for the Internet gaming business.

Name Recognition

Internet gamblers, like the rest of us, feel comfortable dealing with a company that they are familiar with. This familiarity factor bestows a natural advantage to providers who have a physical facility and who have traditionally established themselves in the gaming business. Companies such as Lasseters, Crown Games and Ladbrokes, therefore, have a clear advantage when it comes to reputation-based trust. Tatts.com, the digital brand of Tattersals, aggressively promotes its "hundred years of tradition" in an effort to effect customer trust and confidence. Internet casinos--lacking in physical presence and without established reputation--would have to try harder to gain name recognition. The primary means of doing so is to engage in advertising through traditional media such as magazines, newspapers, and TV.

Mass advertising improves the e-provider's visibility and reputation in the marketplace, even among non-Internet users. Shopping.com, Amazon.com, and E-trade advertise in newspapers such as the New York Times and USA Today, while ads for HotJobs and Ebay have appeared on network television. In fact, e-commerce firms such as Monster.com, HotJobs.com, and E-trade bought nearly a quarter of the advertising time on the first Super Bowl of the new millennium. Internet casinos without a corresponding offline retail site will be well advised to employ traditional media campaigns if they are to improve their name recognition and thus enhance the comfort levels of their target market. Using credible celebrities in brand names or as spokespeople also enhances name recognition (e.g., the now defunct Kenny Rogers Casino).

Web Site Appearance

Proponents of NLP--the art and science of persuasive communication--have long known that perceived similarity with another individual enhances the level of trust toward that individual. Communication is the medium we all use to establish similarity. Communication involves not just the words and phrases we use to convey meaning, but also our manner of attire, body language, and a host of silent languages (cf. Hall 1977). In the Web world, the primary mode of communication is the Web site itself. Companies wanting to succeed in Internet gaming need to first determine with whom they are communicating. If you can properly identify and then target your audience through the Web site, your customers will begin to see themselves in the site. They will feel comfortable, upon visiting your Web site, they will feel like they belong there.

The Kosher Casino, for instance, narrowly targets itself toward the Jewish markets through generous use of Jewish phraseology:

"Interested in winning some gelt? We offer the absolute finest gaming software available that you'll be farklempt. With stunning graphics, fast playing action, higher than average payout ratios and trust that is worthy of a rabbi, our little shtetl will be making waves for the whole mishpacha, not to mention the community."

Successful targeting requires that you design the Web site graphics and content to match the style and tone of your target market. Market research needs to be conducted to assess the target market's preferred style, tone, and content of communication. Does your target market prefer conservative or edgy prose? Do your customers want a quick visit or are they looking for a leisurely entertainment experience? Remember, we all tend to like and trust people and objects that we suppose to be like us. The Internet gaming site needs to resonate the desires, aspirations, level of sophistication, and lingo of the market segment that you want to pursue. When correctly done, your customers will, upon visiting your site, sense similarity and likeness, and will therefore reward you with their trust.

Similarity aside, trust will also be determined by the professionalism exhibited in the Web site design. Web sites with a professional appearance may imply more trustworthy operators. Aspects of professionalism include proper grammar, correct spelling, full and responsible disclosure, and appropriate graphics. Concept tests and periodic focus groups with customers will ensure that the target market perceives your Web site as professional and reliable.

Privacy and Security

Privacy and security, within the context of online gaming, involves three broad classes of concern: (1) the games are fair and that customers will be promptly paid when they win; (2) online actions of players could be monitored by unauthorized parties; and (3) online actions and information could be logged and preserved for future access and unauthorized use.

Because online players are betting from remote locations, fairness of games is always a concern. This concern is allayed by volunteering to make available all systems, algorithms, and practices of the casino for inspection by any gaming commission or government authority. Omni Casino goes a step further by publishing payout percentages for every game on a monthly basis. Omni's figures are audited by PricewaterhouseCoopers Inc., and punters can review the auditor's full report for each month.

It is almost impossible to have a fool-proof system that can prevent unauthorized monitoring of Internet users. Technically, it is quite easy for any motivated observer to collect information (such as a compendium of all posts made to electronic newsgroups) and store it indexed by user name. Long-term databases of such kinds truly threaten a person's ability to choose what to disclose about oneself. Not many on-line bettors, for instance, would want to let their employer know that they occasionally punt while at work. These and other issues relating to privacy deserve particular attention.

Wang, Lee and Wang (1998) classify privacy-related matters into five categories:

  • activities related to junk-mail e-marketing organizations;
  • activities of Web-based advertisements that track usage history and preferences through cookies;
  • privacy concerns over malicious programs that can obtain a person's credit information and personal files;
  • privacy concerns over use and transfer of personal information such as MSN's tracking of all activities of their subscribers;
  • and concerns over distribution of private information for purposes other than the reason for which the information was initially collected.

Several online casinos do go to considerable lengths to assure privacy to their customers. They could do better by addressing the various privacy issues on a category-by-category basis, or by having these issues addressed in a FAQ format.

Online players, understandably, would be most concerned about privacy in relation to banking and transaction processing. Internet casinos need to prominently display their technology and policy features to deal with this very real and vital concern. Features such as proper site identification, high security data encryption protocols, and reliable data encryption algorithms and cryptographic keys are a prerequisite to secure transactions. Once adopted, these security features need to be explained to prospective customers in layman's terms. Privacy policies should be developed as to customer data collection, usage, storage, and access. The policies need to be designed from the customer's perspective. Focus groups with representatives of the target segment should be conducted to ensure that the amount, content and style of security features explained on the Web site are in keeping with the information needs, background, and technological savvy of targeted customers. Insuring each customer account though a reputable third party insurer also goes a long way in alleviating fears of possible financial misconduct and subsequent financial loss.

Company Address and Contact Information

As the Internet gains momentum and moves into the mainstream, prospective customers look for assurance that ties into the world they are used to. Most Internet customers feel reassured when contact details of the service provider are displayed prominently on the Web site. Preferably, the firm's location should be in a country with a sound reputation of integrity. Since most of the unregulated Caribbean sites are regarded as "shady," a contact address there would do little to inspire customer trust.

Customer References and Testimonials

Many Internet providers prefer to have their advertising messages presented by way of a testimonial, where a person praises a product or service on the basis of his or her personal experience with it. Testimonial executions can have ordinary satisfied customers discuss their own experiences with the provider, particularly in matters relating to privacy and security. This approach can be particularly effective when the person delivering the testimonial is someone with whom the target audience can readily identify. Testimonials are especially effective when they come from a recognizable or popular source.

A related method is site endorsement, where a well-known or respected individual speaks on behalf of the provider. Here, the message is not necessarily based on their personal experiences. Amazon.com provides customer-based proof of the integrity of its Web site: "You'll be one of the 10 million customers who have safely shopped with us without credit card fraud."


In the year 2000, one in three Internet users was the victim of a privacy or security breach. It therefore comes as no surprise that 94 percent of the respondents in a Wall Street Journal survey expressed concerns about threats to their privacy on the Internet. Privacy and security issues are particularly exacerbated in the realm of Internet gaming. As more and more players enter the information superhighway, it is inevitable that a shakeout of the industry will force a majority of operators to fall on the wayside. Those that survive and prosper are the ones that have worked hard to gain the trust of their customers.

In the industry's current early phase of lifecycle, few providers of Internet gaming can win experience-based trust from a majority of their customers. Most will, by default, have to prevail through cue-based trust. Reputation, a thorough understanding of the target market, focused positioning through the best possible customer Web site interaction, diligent attention to privacy and security issues, and use of customer testimonials are some of the ways with which to garner cue-based trust. The Internet has certainly opened new doors for extending and expanding business prosperity. Bringing this prosperity to fruition hinges almost entirely on trust. Dick Brown, the chairman and CEO of EDS, conveyed this message most eloquently when he wrote, "There's no one authority that polices Internet communities, no extensive system of laws to protect you. It falls to all of us--business leaders, government leaders, and consumers--to create the environment of trust that ensures the validity of the digital economy."


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Sudhir Kalé is Associate Professor of Marketing at Bond University in Australia. He is also a marketing trainer and consultant for several types of companies including gaming. Sudhir’s research on marketing, social psychology, and cross-cultural communication has been published in leading international journals. Top companies the world over have benefited from his holistic approach to issues in marketing and management. Sudhir’s e-mail address is Sudhir_Kale@Bond.edu.au. Address for correspondence: School of Business, Bond University, QLD 4220, Australia.