If you’re getting 2-3% conversion rate now, that’s not too bad in my experience. Although I’m not a PPC expert in gaming so anyone with more direct knowledge feel free to contradict me on that.
But if you’re getting that already it sounds like you know what you’re doing to some extent, so I guess you know to structure your keyword groups tightly, test your ads, test landing pages etc.
Re av. player value, that can vary by game type. E.g. slots, table games, or whatever. I think only the operator will have a birds-eye view of this. If you can track your conversions back to your keywords, or landing pages, that’s probably a good avenue to optimise with.
Re competitors, the big affiliates as well as operators have yearly budgets in the millions, so don’t be surprised to see big players at the top. Saying that, as CPC is so high you can be fairly sure that most of them know what they’re doing up there, i.e. not just throwing money at it. So it can pay to copy what they do re. landing pages, ad copy etc. Note that even a high CPC could still be worthwhile if they’re getting valuable players in at volume. Some might also be working to an overall CPA target, so they are appearing at the top, but their long tail conversions will reduce their overall CPA, hence that’s why they can also show for the expensive KWs.