Gaming America Mar/Apr 2022

GamingAmerica.com

Mar/Apr 2022

THE PAST AND FUTURE Gaming America explores how tribes and Indigenous peoples are adapting to the rise of commercial gaming in North America

• CALIFORNIA: THE GOLDEN PRIZE

• HOW WILL THE METAVERSE IMPACT GAMING?

• POINTSBET: A DIVERSE FUTURE

• THE MIRAGE – NEVER FORGOTTEN

COO, EDITOR IN CHIEF Julian Perry SENIOR STAFF WRITER Cameron Saunders Cameron.Saunders@gamingamerica.com

EDITOR’S LETTER

STAFF WRITERS Henry Moore Henry.Moore@gamingamerica.com Michael Bartlett Michael.Bartlett@gamingamerica.com LEAD DESIGNER Brendan Morrell DESIGNERS Olesya Adamska, Christian Quiling DESIGN ASSISTANTS Radostina Mihaylova, Svetlana Stoyanova MARKETING & EVENTS MANAGER Mariya Savova IT MANAGER Tom Powling COMMERCIAL DIRECTOR Deepak Malkani Deepak.Malkani@gamblinginsider.com Tel: +44 (0)20 7729 6279 US BUSINESS DEVELOPMENT MANAGER Aaron Harvey Aaron.Harvey@playerspublishing.com Tel: +1 702 425 7818 ADVERTISING SALES EXECUTIVE Ariel Greenberg ariel.greenberg@playerspublishing.com Tel: +1.702 833 9581 SENIOR ACCOUNT MANAGERS Michael Juqula Michael.Juqula@gamblinginsider.com Tel: +44 (0)20 3487 0498 Martin Dilleigh Martin.Dilleigh@gamblinginsider.com Tel: +44 (0) 203 435 5628 ACCOUNT MANAGERS William Aderele William.Aderele@gamblinginsider.com Tel: +44 (0)20 7739 2062 Clive Waite Clive.Waite@gamblinginsider.com Tel: +44 (0)20 7729 0643 BUSINESS DEVELOPMENT MANAGER Michelle Pugh Michelle.Pugh@gamblinginsider.com Tel: +44 (0)20 7739 5768 SENIOR ACCOUNT EXECUTIVE Sam Ford Samuel.Ford@GamblingInsider.com Tel: +44 (0) 207 739 9918 CREDIT MANAGER Rachel Voit WITH THANKS TO: With special thanks to Jason Giles, Stephen Crystal, Ray Pineault, Oliver Lovat, Dr Eric Lee, Aubrey Levy, Ari Fox, Victor Rocha, Matthew Morgan, Mike Delisle, David Bretnitz, Kathy Fairbanks, Juan Garza, Nathan Click, Jeff Millar, Richard Pistilli, Quincy Raven, Gina Lanphear.

JULIAN PERRY,

COO, Editor in Chief With Spring just around the corner – and while the world around us faces its share of problems – we have much to be thankful for at Gaming America. Beyond that general sense of excitement, we’d like to welcome you back. Our design team has been hard at work sprucing the place up for you and we hope you like the new look. You have before you our tribal edition, where we take on the issues which define this vital segment of the industry.

The overriding question we have asked is how tribal operators have met the challenge of the rapid rise of commercial gaming in the market. Is it a threat or an opportunity? Unsurprisingly, the answers we received were varied, indicative of an industry that eschews easy characterization. Looking ahead, we have also dedicated a number of pages to looking at the looming battle over sports betting in California.

With multiple propositions on the ballot in November, this market could go any number of ways (and in the process, possibly becoming the single largest in the country).

Beyond these main focuses, there are a broad range of interviews. Among other fine features, we talk to PointsBet about its drive for inclusion and diversity; we read about esports; and, looking away from the future and toward the past, Oliver Lovat provides a fine historical account of the legendary Mirage casino in Las Vegas.

One final note: at Gaming America, we have taken pains to be sensitive to preferred nomenclature. While in the US, ‘tribal’ is an appropriate word to use when discussing Native North American people, in Canada this word can cause offense. The preferred terms here are ‘Indigenous peoples’ or ‘Indigenous populations.’ We have tried to be sensitive to these distinctions and apologize ahead of time for any offense that may have been caused.

FEATURED IN THIS ISSUE

Gaming America magazine ISSN 2632-766X Produced and published

by Players Publishing Ltd All material is strictly copyrighted and all rights reserved.

Reproduction without permission is forbidden. Every care is taken in compiling the contents of Gambling Insider but we assume no responsibility for the effects arising therefrom. The views expressed are not necessarily those of the publisher.

VICTOR ROCHA

Conference Chairman, National Indian Gaming Association

MATTHEW MORGAN

Chairman, Oklahoma Indian Gaming Association

CHECK OUT GAMINGAMERICA.COM FOR THE BEST IN BREAKING NEWS

GAMING AMERICA | CONTENTS

8

FROM THE TOP Gaming America speaks to NIGA Executive Director Jason Giles about the group's upcoming show in Anaheim.

10

THE STATE OF TRIBAL GAMING

12

THE STATISTICAL OUTLOOK

14

We look at some of the key players in the United States' tribal gaming scene.

Global Betting & Gaming Consultants, the global gaming data expert, provides exclusive data to Gaming America.

GAMING IN THE METAVERSE Gaming America regular and SCCG Management Founder Stephen Crystal looks at how the metaverse may affect gaming.

18

GA HUDDLE

22

ONLY A MIRAGE

26

Mohegan Gaming & Entertainment President and CEO Ray Pineault gives an exclusive interview.

Regular contributor and CEO of Denstone Group Oliver Lovat gives us a history of the Las Vegas legend, the Mirage.

A DIVERSE FUTURE Dr Eric Lee, Vice President of Diversity, Equity and Inclusion at PointsBet, speaks to Henry Moore about company goals and challenges facing the industry.

28

A PAYMENTS PERSPECTIVE

30

ESPORTS IN THE CASINO

32

TRIBAL GAMING PAST AND FUTURE

36

32

Gina Lanphear, Director of Marketing at Flexia Payments, gives us her company’s view on tribal gaming, as well as the upcoming NIGA tradeshow.

Casino Esports Conference's Ari Fox talks about all things esports betting.

Gaming America's Cameron Saunders summarizes the past successes and future possibilities of tribal gaming in America.

OKLAHOMA TRIBES TAKE A STAND Matthew Morgan, Chairman at the Oklahoma Indian Gaming Association, speaks about the dangers inherent in state compacts.

6 | GAMINGAMERICA

40

STENGTH IN UNITY

44

GOLDEN STATE, GOLDEN PRIZE

In Canada, Indigenous peoples are fighting for a place at the table as Ontario regulates, according to Chief Mike Delisle.

Gaming America writer Michael Bartlett takes a deep dive into the prospects for sports betting in California.

50

CALIFORNIA SCORECARD

54

DIFFERING VIEWPOINTS

56

A detailed look at the four competing sports betting propositions in the Golden State.

Kambi and the Mohawk Council of Kahnawà:ke take on issues facing the industry today.

EVOLUTION The live casino behemoth speaks to Gaming America about US prospects in 2022.

58

HIGH-OCTANE LOYALTY

62

TRIBAL ASPIRATIONS

Following its acquisition by Snipp Interactive, Gambit Rewards discusses the loyalty market in the US.

Gaming America speaks to Aspire Global about its tribal partnerships in the nation's growing gaming market.

63

KICK-OFF IN CANADA

64

PRODUCT REVIEWS

TheScore talks its upcoming launch in Ontario, the market's potential and the challenge of moving from sports media to sports betting.

What's new in the industry? We look at five hot-off-the-press products.

GAMING AMERICA | FROM THE TOP

FROM THE TOP: ALL SYSTEMS GO As the Omicron wave eases, Gaming America speaks to NIGA as the show comes to Anaheim in April.

The gaming industry, as is the case with the rest of the business world, yearns for a return to normalcy. Many thought the Covid spell was broken last year, when Las Vegas hosted two major in-person conferences – the National Indian Gaming Association (NIGA) show in July, then the Global Gaming Expo (G2E) in October.

All eyes were on the ICE show in London, scheduled for February 1-3, 2022.

As you all know, the Omicron variant scuttled that plan, pushing ICE London back to dates TBD, later confirmed as April 12-14.

Coming up just one week later will be NIGA 2022, which will take place April 19-22 at the Anaheim Convention Center.

Jason Giles, Executive Director of the National Indian Gaming Association, gave Gaming America a detailed look at what to expect at this year’s show, including which companies are planning to exhibit, and what it is like dealing with constantly updated restrictions from state and local authorities.

Gaming America: NIGA 2021 was held before the summer of the Delta variant, but it had strict health protocols, including a vaccination requirement. What were the final numbers for the conference in terms of number of exhibitors and number of attendees? How did those figures compare to the two most recent NIGA shows prior to Covid?

Jason Giles: We were very proud that this past July, the Indian Gaming Tradeshow & Convention was the first large-scale gaming event to run in-person for the industry. Our participation was in step with 2019 numbers, as we 8 | GAMINGAMERICA

JASON GILES National Indian Gaming Association Executive Director

brought together both tribal leaders and commercial gaming operators along with the industry’s top suppliers.

It is the “new normal” now that some attendees and exhibitors may need to make personal decisions on whether they are able to attend in-person events or may face evolving travel restrictions. We respect and understand that not every person is able to get back to attending tradeshows and they need to do what makes the most sense for themselves, families, businesses and communities.

In the meantime, we will continue to strive to provide access to new strategies, technologies and relationships, both at the tradeshow and conference and throughout the year. Tribal gaming is a

dominant force in the gaming community.

The work we do empowers our tribal communities and generates important revenue for economic development.

GA: What are the expectations for NIGA 2022? Is the show going to attract the same number of exhibitors/attendees as 2021?

Giles: We are looking forward to the show and are excited to be back in Southern California. We feel it is a great destination as it is convenient for some of the nation’s largest tribal casinos, as well as those located on the Las Vegas Strip. Plus, there are great entertainment options, from a lively downtown to the nearby Disneyland Resort.

Our exhibit hall will be filled with all of the major players along with new emerging technologies and services for the next iteration of gaming expansion; including sports betting, iGaming, esports, cashless payments and more. We have support from major manufacturers, including Scientific Games, Everi, Novomatic Americas, Aruze, Ainsworth Game Technology, IGT, Konami Gaming, Aristocrat Technologies, Inc/VGT, Interblock Gaming, JCM Global, Quick Custom Intelligence, among many others.

We are excited to welcome (and welcome back!) exhibitors in emerging categories such as sports betting (Betfred, Kambi, GAN, DraftKings, United Tote) and payment solutions (NRT, FABICash, Global Payments, Trustly, Flexia, Sightline Payments). We expect for there to be more than 350 companies participating.

Our education program is built by our

FROM THE TOP | GAMING AMERICA conference chairman, Victor Rocha of Pechanga.net, and will focus on both the business fundamentals, as well as the strategies needed to succeed when faced with changes coming on the horizon.

There will be strong emphasis on topics such as online gaming, sports betting, digital payments, casino expansion, gaming technology, artificial intelligence, cannabis, esports, politics and crypto, to name a few. Tracks will include Gaming Floor, Resort Operations (including Hospitality and Marketing), Enterprise Development, Sports Betting, Emerging Gaming, Politics and Policy, Hot Topics and Sovereignty.

There will be content for every member of the operation including: tribal leaders and council members, commissioners/regulators, top executives (CFOs, CEOs, GMs, marketing, iGaming), facilities managers at hotels, casinos, bingo halls and resorts, economic development properties and security/ surveillance managers.

We are excited to build new relationships, and celebrate the continued success of Indian Country and tribal gaming at several of our special events; including our annual golf tournaments, chairman’s

welcome reception, Chairman’s Leadership Awards Luncheon and more taking place on our full event schedule.

GA: Please talk in detail about the challenges of holding in-person conferences during a pandemic. How do you deal with the uncertainty... Are there a lot of sleepless nights for the conference organizers?

Are people saying they don’t want to attend even though there is a vaccination requirement? Conversely, are there any saying they won’t attend because there is a vaccination requirement?

Giles: It definitely can be tricky to navigate, but our top priority always is ensuring the safety of all exhibitors, attendees and staff at the Indian Gaming Tradeshow & Convention. We will be following the guidelines issued by the CDC, state and local officials. Additionally, we are working with our travel partners, venues, hotels and convention centers to create a safe and productive environment to conduct business.

We have found that communication is key to ensure that everyone is aware of ever-changing guidelines and new policies. At the 2022 event, we are requiring proof of vaccination or, if a

participant prefers, they can show proof of a negative Covid test taken within 72 hours of arrival to the show. We will be following all local guidelines in regard to masks. Participants will be able to visit our website for the most up-to-date information.

Again, we do realize that not everyone is able to join in person, so we have created a weekly webcast series since the onset of the pandemic moderated and created

by Rocha. In this series, called “The New Normal,” we address timely issues facing operators and tribes. The series is available live and on-demand for anyone that may wish to participate or listen in. This is in addition to the year-round legislative work and updates provided by the National Indian Gaming Association.

GA: How would someone get information about the show?

Giles: Please be sure to visit our website www.indiangamingtradeshow.com for additional details. Registration is currently available and there are group discounts for teams bringing 4+ members. If you would like to exhibit, please contact Ed Gallo at Edward.gallo@clarionevents.com.

"WE RESPECT AND UNDERSTAND THAT NOT EVERY PERSON IS ABLE TO GET BACK TO ATTENDING TRADESHOWS."

GAMINGAMERICA | 9

GAMING AMERICA | US TRIBAL CASINOS

MAJOR PLAYERS IN TRIBAL GAMING WA

WASHINTON STATE

Washington has 35 tribal-owned casinos operated by 27 tribes.

MT OR ID

NEVADA

WY

2021 saw three out-of-state tribes enter Nevada, the Mohegan Tribe, the San Manuel Tribe and the Seminole Tribe of Florida.

NV

CALIFORNIA

The San Manuel Tribe of California made history in 2021, purchasing the Palms Casino Resort in Las Vegas.

UT

CA

CO

AZ

ARIZONA

NM

Tribal-owned casinos bring in an estimated $2bn in annual revenue, making it the fifth-largest tribal gaming state.

States with tribal-owned casinos States with no tribal-owned casinos

AK

HI 10 | GAMINGAMERICA

US TRIBAL CASINOS | GAMING AMERICA

For the tribal edition of Gaming America we look at some of the heavy hitters in the tribal gaming world, highlighting some key facts and industry trends.

CONNECTICUT

This state holds two of the country’s most well-known properties, Mohegan Sun Casino and Foxwoods Resort Casino.

ME

ND MN

VT

MD NY

WI

SD

NH MA

MI IA

PA

NE IL KS

RI

OH

IN

WV

MO

VA

KY

OK

DE

NC

TN AR

SC MS

AL

GA

NEW JERSEY

LA TX

OKLAHOMA

DC

FL

Interestingly, there are no tribal-owned casinos in New Jersey. Although, 2021 saw the Mohegan Indian Tribe of Connecticut take on the management of the Resorts Casino Hotel.

Oklahoma is a center for tribal gaming, with 33 tribes operating 143 casinos, some of the most prominent tribal operators include the Chickasaw Nation, the Choctaw Nation and the Cherokee Nation.

GAMINGAMERICA | 11

250

500

229 213

203

200

192

400

171

GAMING AMERICA | GBGC

150

300

133

131

100

89

200

71

67

60

58

50

54

46

SPORTS BETTING ADVERTISING OUTLOOK: 0

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Revenue

Q1 2021

Q2 2021

32

28

25

322

300 250

312

600

192

• Data from133GBGC illustrates the great sports betting marketing battle currently ongoing in the US.

131

100 60

58

Q3 2019

35

54

46

32

30

28

25 22

20 15

15

123

86

57

89

67

15

Q2 2019

Q3 2019

Q4 2019

Q1 2020

Q3 2020

213

Q4 2020

Q1 2021

Q2 2021

50

40

33

33

6

23

7

23

5 20 21

18

33

32

30 20 10

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Receipts from Customers

120

Q2 2020

Q3 2020

Q4 2020

Q4 2021

Q1 2022

Q1 2021

Q2 2021

Q3 2021

30

80

140 120

100

60 50

5

6

Q4 2019

6

30

14

Q1 2020

7

Q2 2020

5

Q3 2020

10 Q1 2021

Receipts from Customers

Q2 2021

Q3 2021

Q4 2021

140 120

112 100

78

35

20

Q3 2020

Q4 2020

47

Q1 2021

Q2 2021

44

Q1 2022

0

Q2 2022

17

15

24 24 20

13

14

Q2 2020

Q3 2020

28

0

45

Q3 2021

Q1 2020

Q2 2020

123

123

9

5

Q4 2019

Q1 2020

Q4 2020

Q1 2021

Q2 2021

Receipts from Customers

144

140 120

Reven

Advertising and Promotions

139

105

100 78

112 100

141

135 123

116

Q3 2021

Q4 2021

Total Costs

160

100 80

Q2 2020

Advertising and Marketing

12 | GAMINGAMERICA

65

52

Revenue23

7

Q4 2020

40

67

7

Q1 2020

48

76

33

20

9

10

8

65

60

80

46

38 67

23

18

20

40

21

20 13

42

35

0

116

100 80

60

70

28 24

106

78

40

2

160

65

90

Q4 2019

Advertising and Marketing

123 123 PointsBet 112 Expenses Total Costs and Receipts from Customers, Total Costs (US$M)

80

9

5

0

Q2 2022

Gaming Revenue

100

15

7

16

Q2 2020

Q1 2020

5 Q1 140 2020

60 33

50

16

Q4

11 2019

80

28

14

13

33

31

90

70 36

110

60

100

Q3 2021

40

21

33

9

Q2 2020

Gaming Re

48

31

39

24

20

622

Q1 2020

298

47 Costs Total 45

28

15

11

110

Q2 2020

30

0

16

15

0

Q3 312 2021

33

10

22

10

71

100

0

Q2 322 2021

Revenue

10

• As is visible from GBGC's data, total costs on65the whole far outweigh gaming revenue and receipts from customers for PointsBet, Rush Street52 Interactive, 48 47 45 (GNOG) Golden Nugget Online Gaming and DraftKings.

36

25

65

20

70

35

52

5

0

40

133

45

25

• Wynn Resorts, meanwhile, is reportedly considering 5 5 5 3 selling its online arm. Wynn Resorts executives have made a number of comments publicly, lamenting the Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2020 increasing 2020 2020 2021 acquisition 2021 costs of2021customer with the US sports betting sector.

Gaming Revenue Advertising and Promotions

Q4 2020

40

15

0

98

30

14

Q1 PointsBet 2021

Q3 2020

50

35

• Caesars has already said it will end its mass 23 23 advertising in New York, following a big 20 17 17 opening campaign.

Q2 2020

Receipts from231Customers, Advertising and Promotions 163 Advertising & 155 Marketing (US$M) 131

Q1 2019

45

5

Q1 2020

68

Q2 201

20

481

5

5

759

619

Gaming Revenue

0 60

40

10 5

0

10070

• While marketing costs have soared recently, data Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 shows2020 this is2020 not a2020 sustainable approach, as both 2019 2020 2021 2021 2021 the heavy costs of advertising and the heavy costs Revenue Sales and Marketing expense of free bets severely limit the margins involved for sports betting firms.

5

3

200

71

50

637

591

300

89

67

17

14

5

400

171

150

15

213

203

17

10

500

Q1 2019

30

20

20 15

57

23

304

298

229

200

0

23

22

Global Betting & Gaming Consultants (GBGC), the global gaming data expert, provides exclusive statistical data to Gaming America on sports betting marketing & advertising costs; visit www.gbgc.com for more.

700

98

Sales and Marketing expense

30

350

68

0

Q3 2021

35

800

100

123

Q1 2022

Q2 2022

800800 350350

759759

700700

322322

312312

250250

GBGC | GAMING AMERICA

304304

298298

300300

203203 DraftKings 192192 Revenue, Sales & Marketing Expenses171171 (US$M)

DraftKings Revenue & Total Costs (US$M)

213213

200200 150150 350 100 100 350 300

300 50 50 250 0 0

350

200350

150

250 100

200 50

150

0

100

Q1Q1 2020 2020

322

Q2Q2 2020 2020

322

Q1Q1 2021 2021

25 25 0150

400

54

54

203

46

46

192 203

131 22 Q4 22 Q3 Q3 Q4 Q1 20192019 2019 2020 20 202019

89

89 71

71

58 15 1567 60 Revenue Revenue 54 60 58

46 54

50

46

229 32 32 213

171

171

Q3 Q2Q1 Q3 Q2 2021 2021 2021 2021 2021 17 17 17 17

1035 10 Q3 0 30 2019 5305

Q4 Q3 2019 2019

0250

Q1Q1 2020 2020

20

35

20 35

10 5

3

3

50 50

15 2020 0 15

15

Q1

5

53

Q2 Q1 2020 2020

14

Q4

17

Q2 2021

14

Q1

1717

Q3 2021

Q2

47 47

2020 2021 2021 Advertising and Promotions

5

33 33 31 31

5 56 6

6 6

Q3Q4 2020 2020

24 24

Q4Q1 2021 2020

Q4Q4 2019 2019

Q1Q1 2020 2020

21 21 Q1Q2

Q2Q3 2021 2021

2021 2021 47

14 14

7 7

10

65 5 65

30

10

25

5

20

0

Q1 2020

33 33

65

Q3 52 2021

7 7

33

36

47

33

Q3 24Q3 2020 2020

Q4Q4 21 2020 2020

Q1Q1 2021 2021

Q2Q2 2021 332021

45

Q3Q3 2021 2021 33

14

Receipts from Customers Receipts from Customers

50 5

7

6

6

140140 40Q4

Q1 2020 9

2019

Q2 2020

120120 6 5

30 0 100100 Q4 140 20 2019 80 80 10 60 60 9

5

6

140 0 40 40

Q1 2020

40

14020 120 100 80 60

0

80140 60120

6 6

0 60 40

Q2 2021

7

33 33 31 31 28Advertising and

Q3 Q4 2020 18 18 2020

123

7 7

Q1Q1 2020 2020

Q2Q2 2020 2020

Q3Q3 2020 782020

23

18

Q4Q4 2020 2020

65

7 Revenue Revenue

8

Q2 2020

Q3 2020

8

65

Q1 2020 35

78 7 65

Q2 2020

123

46 46

Q2 123 Q3 2021 2021

Q3 Q4123 2021 2021

Q4 Q1 2021 2022

Q1Q1 2021 2021

Q2Q2 2021 2021

Q3Q3 2021 2021

Q4 2020

7818

Q3 2020

48

0 33

123 112 Q2 42 2021

Q1 112 2021 100

123

Q1 Q2 2022 1602022

Q3 202138

46

Advertising and Promotions 23

Q4 2020

Q1 2021 42

42

Q2 2021 38

Q3 2021 46 3846

86 98

Q2 Q1 2019 2019

637

213

481

213

481

133

71

23 155 163 23

322

312 322

32 32

133

155

89 71

Q4

312298

Q1

Q3

100100

Q4

Q1

Q2 Q3 Q1 Q2 Q3 2021 2021 2021 2021 2021

60 60

50 40

120

80

140

60

120

40

100

20

80

0

60

16 33

32

106106

32

28

Q1 Q2 23 Q3 23 23 202120 212021 21 2021 20 18 18 Q3 Q4 Q1 16 2020 Costs2020 2021 Total and Expenses

16Q2 2020

11

Gaming Revenue

Q2 2021

Q3 16 2021 16 67 67

67 67

Total Costs and Expenses

Rush Street Interactive 50 Revenue, Operating Costs (US$M) 90 40 9

30

106

14

70

Q1 60 2020

0

Q2 15 2020

Q3 17 2020

Q4 2020 13

23

160

5

24 24

40

Q4 2019

Receipts from Customers 116116

123123

Q1Q1 2020 2020

Q4 Q1 2019 2020

Q2Q2 2020 2020

Q1 141 141 2022

123123

Q4 2020

44

44

Q4Q4 100

116

Q4 2020 116

65

Q2 Q1 65 2020 48 2020

78

144

144 Q1 2021

139

Q2 2021

112

105

65 106

Q2Q2 2022 2022

106

80

80

67

65

Q2 2022

Q3 2021

65

52

45

45

Q4 2021

Q1 2022

123

Q2Q2 2021 2021

135 123

141

123

Q4 2020

Q1 2021

Total Costs Total Costs

Q3Q3 2021 2021 141

123

GAMINGAMERICA | 13

78

Q3 2020

76

52

Operating Costs Operating Costs 139 135

Q3 2021 123 112

100 Operating Costs 100

105

80

Q1Q1 2021 2021

2020 2020

78

Q3 482020

Q1Q1 2022 2022 52

Q2 2022

Total Costs

123

65

48

Q4Q4 2021 2021 45

47

47

Q1 Q2 33 2021 33 2021

112from Customers Receipts Receipts from Customers 105

Q3Q3 2020 2020

Revenue 100

60

80 76

Q2 144 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 141Q3 Q3 Q4 139 Q1 135 Q2 Q4 Q1 Q2 2020 2020 2020 2021 2021 2021 2021 2022 2022 2020 2020 2021 2021 2021 2021 2022 2022

Q1 Q2 2020 2020

Revenue Revenue

140

35

106

Total Costs Total Costs

67 67

67

Total Costs

112112

Q1 105105Q2100100 Q3 2020 2020 2020

116

Q2 2020 120

52 52

45 45

76

28

Q114420 Q2 Q3 Q4 144 139139 2021 135135 14 2021 2021 2021

9

50

30

47

44 Receipts from Customers Receipts from Customers

65 65

33

20 10

20

13

80

28

24 24

23

80 80

76 76

47 47

65

100

Q1 2020

39

28 24 2824 144 23 24 24141 139 78 78 23 20 20135 from Customers 20 17 Receipts 1517 14 20 1314123 15 65 65 123 13 9 116 10 112 5 9 10 48548 105 100

48 0 0

160

23

Q423 22 2020

Q3 22 2020

160 40 40 0 35 35 0 Q4 140 78 2019 20 20

35

Q3Q3 2021 2021

2021 2021

Total Costs and Expenses Total and Expenses 16Costs 39

20 21

33

17

213

Total Costs 32 Total Costs

Q2Q2 28

28

20 80 80 Q1

30

Q2 2022

23

Q1Q1 2021 2021

11

2020

Q4 2019 60

120 100

20 21

Q4Q4 2020 2020

Q2 Q3 2021 213 2021

16 16

Q2

Revenue 28 Revenue

Q3Q3 2020 2020 23

298

Q1 2021

Total Costs

133

71

16

25 Q290 90

160160 70

80 80

Q1 Q2 202280 2022

Q2Q2 2020 2020

619

39 39

89

67

Q3 Q2 2019 2019

Q3Q3 759 2021 2021

298

155

163

759

Q2Q2 2021 2021 637619 298

591 312 Total Costs Total Costs 591

312

123 13121 20 21 Revenue Total Costs 18 18 123 20Revenue 89 57

Q1Q1 2021 2021

Q4 Q3 28 28Q1 Q3 Q2 Q2Q4 Q3 Q1 Q4231Q2 231 20202021 2020 2019 2020 2020 202020202021 2020 2021

131

16 16 6786

Q4Q4 2020 2020 322

322

30100100

80

5

140

0

Q3Q3 2020 2020

110 44 44 0 40 40 Q3 Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 Q1 Q1 Q2 Q233 33 Q3 80 100 2020 20202020 20202020 20202021 20212021 2020 762021 2021 28 28 2021 30 30 2020 24 2424 24 23 23 90 20 20 67 67 65 20 20 17 17 Gaming Revenue Total Costs and Expenses 15 Revenue Gaming and Expenses 15 14 14Total Costs 13 13 80 9 9 10 10 52 5 5 70 67 67 47 45 110 0 0110 44 Q2Q2 Q3Q3 Q4Q4 Q1Q1 Q2Q2 Q3Q3 Q4Q4 Q1Q1 60 100 2019 2020 2020 2020 33 2020 2020 2021 2021 2021 2021 2021 2021 2019 2020 2020 2020 100

120120

20

6857

18 22

35110110

140140

40

163 133

Q1Q3 2019 2020

23 23

15

15

10

60 Advertising and Marketing 46 Advertising and Marketing 38

Advertising and Advertising and Promotions 123Promotions 123

100

Revenue

Q4 2021

38 38

40

90

Advertising and Marketing

Q1 Q2 2021 2021 112

100 Receipts from Customers 42 Receipts from Customers

33

Q2Q2 2020 2020

71

Gaming Revenue Gaming Revenue18

16

0

Marketing

Q3 2021

42 42

Q4 Q1 23 23 2020 2021

Q2 2022 36

33

45

90

20

48

45

Q1 123 123 2022 36

33 112 112

10028 100

78 78

Q3 2020 2020

Q3 Q4 2021 123123 2021

Q424 Q1 21 Q2 2020 21 2021 2021

Q324 2020

78Q2

Q1 Q2 2020 2020 65

Q1 2020 40100 35

20 80

Q1 2021

5

Q2 2020

8 8

35

Q4 2020

14 13 14 13 65 65 9Receipts from Customers 112 7 7 7 76 100 5 5

Q4 80 Q4 Q1 2019 120 201920 20 2020 100 0 0

14

Q3 2020 7

6

47 45

22

30

52

21

98

Q1Q1 2020 2020 23

5 50 50

Q1Q165 Q2Q2 65 40 2022 2022 2022 2022 33

Advertising and Marketing Advertising and Marketing 52

47

Receipts from Customers

35 35

60

7

5

13

24

131

8967

Q2 Q4 2019 2019

22 22

11 11

5

50

Q4Q4 36 2021 2021

Q1 Q3 2019 2019

0Q1 2019

100

48 60

33

Q1Q1 2020 2020 481

33 33

15 15

15 70 70 11 10 60 60

70 52

67

68 100

10

80

48

45

Advertising and Promotions Advertising and Promotions

5 5

Q4Q4 2019 2019

155 123

86

57

15 2020 15 15Gaming Revenue

110

28

Q2Q2 2020 2020

13

20

15

48 48

65

40

20

11

52 52

33 33

25

35

0

Q3 202145 45

45

10

17

Advertising and Promotions 36 36

55

Q2Q3 2020 2020 13 13

9

5100

0

23

Q1 2021

Q3 2020

55

3

120

10

23 205

15

15

Rush Street Interactive 60 31 30 Revenue, Advertising & Promotions (US$M) 28

0

20

20

32

28

31

70 30 0 0 70 40

30

5

9 9Gaming Gaming RevenueRevenue

50

40

25

17

28 28

40 10 10

50

17 32

28

Gaming Revenue

0 Q1 20 20 2020 50 60

10

30

Q3Q3 2021 2021

Advertising and Promotions Advertising and Promotions 14

Q4 2020

Q2

Q2Q2 17 2021 2021

14

5 20

Q3 2020

Q1Q1 17 2021 2021

10

40 40

30 30 60 70 0

20

Q2 2020

35

619

619

39 Q3 Q4 Q1 Q2 Q3 Q4 2019 2020 2020 2020 2020 2021 39 GNOG 2019 2019 2020 2020 2020 2020 33 Gaming Revenue, Total Costs &32 Expenses (US$M) 33

40

Sales and Marketing expense

23

Q4Q4 2020 202020

23

2020 2020 Gaming Revenue

5

60

23 5 22 5

22

Q1

70

2020 2020

5

20 60 605 20 0

10

20 Q3Q3 2020 2020

Gaming Revenue Gaming Revenue

15

15 30

25 70 7010 25

15

Q2Q2 22

15

15

30

Revenue 23

22

163

131

98 123

68

400 86

200

15 15 450 10 10 40 5 5 35 0 0 30

45

Q2 Q3 2021 GNOG 2021 2021 3 3 25 Gaming Revenue, Advertising & Promotions (US$M) 23 Sales and Revenue 23 Marketing expense

Q3Q3 2019 2019

231

Q2 2019

20 20 100

637

231

0300

200 25 25

32 Q3

Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 20205 5 2020 5 5 2020 28 2021 28 2021 2020 2020 2020 2020 2021

Q2Q2 2019 2019

Revenue Revenue

57

2019

Sales and Marketing expense expense Sales and Marketing 14 14

32

Q1 Q4 2020 5 5 2019

98

35 35 300 30 Q130

0

35

0

68

71 71

591

591

300600

40 40 400 100

100

637

133133

89 89

500 45 45 200500

200

213

28 28

192

23 23 23 23 133 133 Q1Q2 Q2 Q3 Q4 Q3 Q4 Q1 20 2020 2020 2020 2020 2020 20 2020 2020 2021

131

100

229

71

60

60

600

213213 759

155155

86 86 67 67 57 57

Q1Q1 2019 2019

400700

300

71

298298

481

500 0 0800

700

213

89 58

800

163163 131131

123123

98 98 68 68

600 100 100

500

133 89

67

Q3Q3 2021 2021 213

171 304 298 312 Sales and Marketing expense Sales and Marketing expense 304 171 298

133

131

30 3067 58 50200

Q2Q2 2021 2021

312312

759

700 200 200

700 600

229

322322

231231

304

298

Q4Q4 2020 229 2020 192

304

298

312 322

192

Revenue Revenue

312

312

Q3Q3 203 2020 2020

131

35 35 100250

15 15

46 46

203

150300

67

50

54 54

Q4Q4 2019 2019

200

300

322

71 71 60 60

Q3Q3 2019 2019

250

800 300 300 800

89 89 67 67 58 58

400400

133133

131131

619619

481481

500500

229229

637637

591591

600600

Q2 2021

Q3 2021

GAMING AMERICA | SCCG

WHAT THE METAVERSE MEANS FOR CASINO GAMING Gaming America regular and SCCG Management Founder Stephen Crystal looks at how the metaverse may affect gaming.

What if you were the top-of-mind choice for digital interactions globally? You get home and hop on your gaming console to play your favorite multiplayer game. You want to use voice chat to communicate with your friends, but instead of Xbox Live, Discord, (See Discord graph) Teamspeak, Mumble, or Skype, all your friends connect to your VOIP platform.

Your daughter has long since left the nest, and you can guiltlessly convert her old bedroom into a home office. You need to find the right furniture at the best price while ensuring everything fits within the space. Nobody stops at Crate&Barrel, DWR, or IKEA anymore because all roads lead to you. I know what you’re thinking. Market dominance?

Super easy, barely an inconvenience.

Amazon did it nearly overnight, for online purchases practically of everything but concrete (See Amazon graph).

These considerations are driving some of the largest tech companies in the world to invest massive amounts of capital into the metaverse of Web 3.0.

The word metaverse was first used for a digital interaction space by Neal Stephenson in his novel, “Snow Crash,” in 1992. The 2011 Ernest Cline novel “Ready Player One” was made into a movie in 2018, where it concretely explained the OASIS. In this massive online setting, the overwhelming share of the world’s population interacts with each other via virtual reality.

14 | GAMINGAMERICA

Discord - Growing and Connecting Gamers (in Millions) 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00

2017

2018

2019

2020

So, what does this have to do with the probably the virtual world, Second Life.

Amazon’s Overnight Online Sales Success Story gaming industry? Please stick with us here; Launched in 2003, Second Life lets you Net Revenue in Billions, USD this is a journey. We will get there together, explore a 3D world on your computer and there will450. be a payoff. as an avatar. You could move through the world of Second Life, analyze it 400. and interact with other avatars. You could THE METAVERSE OF YESTERDAY 350. is the idea of using use real money to buy real estate and start Today’s metaverse businesses online, building, shopping, technology like300. augmented reality (AR), and trading digital products and services virtual reality (VR), and holography 250. with others. A wide range of social to create environments that users expression occurred on Second Life, can interact with 200.as an avatar within from a live concert by famous band U2 those spaces. The first metaverse was 150.

100.

50.

0 2013

2014

2015

2016

2017

2018

2019

100.00 50.00 0.00

in 2008 to a virtual riot in 2007 between a far-right French anti-immigration party and anti-racism activists. At its height, anything you could conceive of happening in the real world was occurring as test flights in Second Life, including significant sponsorship activity by large businesses.

As technology improved, these virtual worlds continued to grow, especially in the game industry. In 1999, the world’s first persistent massively multiple online role-playing game (MMORPG), Everquest, was launched by Sony Interactive, enabling millions of players worldwide to interact and play with each other’s avatars in a simulated fantasy world comprised of entire continents.

In 2004, Blizzard Entertainment released its massively successful game, World of Warcraft, another virtual fantasy environment. It was a massive commercial hit — over 100 million subscribers in 2014 and generating over $9bn in gross revenue by 2017.

World of Warcraft even had its first virtual pandemic in 2005, when a special content event, which included a deadly in-game infectious disease in a contained raid area, unintentionally spread outside to the rest of the game through infected pets belonging to

2017

2018

2019

SCCG 2020 | GAMING AMERICA

Amazon’s Overnight Online Sales Success Story Net Revenue in Billions, USD 450.

400.

350.

300.

250.

200.

150.

100.

50.

0 2013

2014

2015

the players.

Additionally, game platforms like Roblox and Fortnite are also considered by some to be persistent metaverses, within which millions of participants virtually connect. These are examples of games that became virtual communities on virtual online platforms.

For some games, an entire world isn’t enough. Cloud Imperium, an international independent game company, recently shattered records in 2021 by raising over $500m through crowd funding.

Players pledge real money towards developing Star Citizen, a space simulator, allowing player avatars to interact with other player avatars in an entire persistent universe of corporate and government-owned planets, gas giants, moons, orbital space stations, refineries and asteroid belts. Star Citizen is still in an open alpha, playable, and with over three million unique active user accounts.

THE METAVERSE TODAY

STEPHEN CRYSTAL SCCG Management Founder

Today, Microsoft and Facebook, now Meta, are trying to create their own metaverses in a reverse process to its forebears; creating virtual social environments that allow its users as avatars to interact with other avatars, connect with their online content and the online content of others, create and publish new content, and conduct

2016

2017

2018

2019

2020

activities previously performed in the real world.

Please think of the metaverse as the augmented reality, 3D, holographic or virtual reality interface to content, made publicly and privately available by its Web 3.0 publishers.

Bill Gates was quoted as saying, “Within the next two or three years, I predict most virtual meetings will move from 2D camera image grids to the metaverse, a 3D space with digital avatars.”

Mark Zuckerberg announced to the world in 2021 that Facebook was changing the focus of the entire company by demoting one of the world’s most potent brands beneath a new entity, Meta.

Facebook’s VR hardware division launched the newest version of its VR headsets, the “Oculus Quest 2.”

Facebook also debuted its VR meeting service, Horizon Workrooms. Horizon Workrooms enables people wearing VR headsets, like the Oculus Quest 2, to assemble in a virtual meeting room “together” in their digital space.

Microsoft is taking a less future-forward, more practical for today, road to the metaverse. Microsoft Mesh for Microsoft Teams combines VR/AR features of Microsoft Mesh with Teams productivity tools, allowing users to join virtual GAMINGAMERICA | 15

GAMING AMERICA | SCCG meetings, collaborate on shared documents and projects, ubiquitously connected via their chat platform. This is not to say Microsoft isn’t planning for the more distant future. It has its own mixed reality product, HoloLens 2, shipping since 2019. This holographic headset uses AI to create a mixed or augmented reality for its wearers, using Azure’s AI capabilities, to collaborate with people in real-time, around the world. The hardware uses eye and hand tracking to allow users to, for example, reach out and move or resize a hologram image they see floating in front of them.

The vision driving these two technology titans is to channel the traffic of their respective product lines into a composite online metaverse using traditional cameras, virtual reality hardware, technologies, and augmented reality experiences – an online one-stop-shop to meet all your needs, whether retail, transactional or experiential.

value and still exist.

On the other hand, Microsoft has experienced its own losses, losing over 100 employees from its Microsoft HoloLens and AR division to Meta in 2021 alone. Apple is fighting against this Meta talent drain campaign by offering engineers incremental cash and stock bonuses of up to $180,000.

Implications for the casino gaming industry Please consider the following parallels between the broader metaverse commercial efforts and those of our specific industry:

Migration of brick and mortar to online • The United States has a massive investment in brick and mortar gaming relative to other gambling markets that have embraced iGaming and online sports wagering, creating mature markets.

gamble being distance. Like a gallon of milk, you’re not going to drive 20 miles to buy it if there’s a closer store just a block away.

The role and requirements for digital talent • The regulation and expansion of iGaming and online sports wagering aren’t going to slow down, much less go away. Customers will have a way to buy their “gallon of milk” right from their PC or mobile phone, sooner, not later.

• Creating and distributing digital gambling products to customers requires investment in infrastructure, content and technology.

• Winning the battle for customers requires a fundamental understanding of digital content marketing specific to the casino gaming industry. That talent might not be readily available locally, so recruitment will be essential.

The dangers of the walled garden

"THESE CONSIDERATIONS ARE DRIVING SOME OF THE LARGEST TECH COMPANIES IN THE WORLD TO INVEST MASSIVE AMOUNTS OF CAPITAL INTO THE METAVERSE OF WEB 3.0."

This process has not gone without pain. For the first time, Facebook reported a decrease in users, losing about a million members compared to the previous quarter. In 2021, Meta’s VR hardware division, Reality Labs, lost over $10bn. On February 3, Meta fell 26%, wiping out $200bn in market cap from Zuckerberg’s personal net worth.

No US company has ever experienced a larger drop in market value but, to be fair, there are very few companies, anywhere, that could lose that kind of 16 | GAMINGAMERICA

• New gaming products and services such as live gaming, which distributes interactive, online gambling to table games players, are attracting the attention of traditional table games players; and companies are investing significantly into production studios for live gaming dealers on a state-by-state basis to satisfy regulatory requirements.

• Brick and mortar gaming operators in local markets have long considered gambling commoditized, with the most potent factor in deciding where to

• Despite its size and relative love of innovation, the casino gaming industry isn’t going to outperform infrastructure and platform companies, like Microsoft and Meta.

• Partnerships with companies like Microsoft and Meta are inherently fraught with risk. It’s their metaverse.

You are a resource inside their walled garden. They own your driveway and the digital freeway your customers took to get there.

• The most competent mid to small-size gaming operators will sharply begin to focus on long-tail marketing and the creation of micro-markets for differentiation and to meet the needs of local gamblers.

Ultimately, there is no realistic way to discount or bonus a gaming operation through future competition. However, through consolidation and breakups in the coming years, mid and small operators can create tremendous value by understanding who they need to be and who they serveinvesting in those capabilities sooner rather than later.

GAMING AMERICA | THE HUDDLE

MOHEGAN SUN RISING Gaming America had the opportunity to sit down with Ray Pineault, President and CEO of Mohegan Gaming & Entertainment (MGE), to discuss major trends in the industry today.

Mohegan Gaming & Entertainment (MGE) recently launched a mobile betting partnership with the market-leading operator FanDuel. What does MGE hope to achieve with this partnership and why did you go with that operator as opposed to others?

That’s a great question and I think that, for our mothership in Connecticut, it really came down to looking at who was the best operator in the United States, of who had a proven track record of being number one.

FanDuel immediately rose to the top as that operator. We thought they were the perfect partner for our flagship property in Connecticut, which is the preeminent property in the Northeast. From there, we would launch digital gaming to our Connecticut and Northeast guests who are able to visit the state (because, obviously, you have to be within the state in order to participate).

I think it created a very symbiotic partnership of teaming together the two preeminent names of gaming to offer a new product to our guests.

As a major land-based operator, is there a fear that the astronomical rise of mobile sports betting in this country will cut into your bottom line?

Honestly, we don’t see mobile betting as cutting into anything. We see it as providing that complete omnichannel approach to marketing to and engaging 18 | GAMINGAMERICA

with our guests. We think the two will work in cooperation with one another – between our land-based casino and our digital division – to make sure that we are reaching our guests through that multichannel. Ultimately, we want our guests to have more opportunities to engage with us and we think it’s going to be more successful if they work together, and are marketed together. We will market our land-based offering online, and our online offering in the land-based setting. In this way, we will continue to engage and build guest loyalty.

How are you looking to further expand MGE’s online presence?

In Connecticut, online betting has only been legal for a few months, since October 2021 to be precise, so operating online is still in its infancy and there’s still a lot of work to do. As you know, this is a work in progress and we need to make sure that we continue to refine it and continue to provide the best guest experience and product that we can. We are obviously already looking at opportunities where we can expand. We have already announced that we are in Ontario with our Niagara properties. We have the opportunity to launch our digital product there, as well, and we look forward to adding that in the very near future. We’ll continue to explore additional jurisdictions as we move forward. We want to make sure that,

RAY PINEAULT Mohegan Gaming & Entertainment (MGE) President & CEO

as we go into each jurisdiction, we’re doing it right, we’re doing it well, and it’s well received by our guests. We’re not going to run into jurisdictions just to be there, we’re going to do it so it’s done right and so it offers a great guest experience.

What is the difference between being competitive in the online world versus the land-based world.

Do either demand different things from you as a manager?

Each of the divisions – the online division and each of its operators – has its own

GAMING AMERICA | THE HUDDLE leader. I think, though, that when you are looking at running the online section, engaging guests is done more over the social media channels, whether it be Google, Facebook, Twitter and all of those various channels. In contrast, the brick-and-mortar locations tend to engage customers more through traditional advertising. That said, the digital channels are growing and engaging ever more with the land-based. So, again, there’s a symbiotic relationship going on there. We do use our land-based advertising and marketing materials to promote our digital offerings. We are actually combining the two. While a predominant number of guests from digital come from a different media than the land-based do, we think we can use both to attract guests and engage the customers more.

to satisfy those guests, bring them back and build that loyalty.

Mobile betting recently went live in the state of New York, a mammoth market directly to Mohegan Sun’s south. There are talks that the next big move is going to be in favor of legalizing online casinos. Are you at all worried that the evolving status of gambling in New York will adversely affect your bottom line at GME?

I think people are looking for more of a variety of things to do, so we’re making sure that our properties are offering that to our guests. They don’t want to just come and gamble, they want to be able to stay, visit a spa, spend some time at a pool, sunbathe on a deck, have some fine dining, come to a convention.

We make sure that we offer all of those options to our guests, so they have a multitude of things to do. So, when they’re coming, they can spend their entertainment dollars on a wide variety of things, and we focus on that in each of our properties.

I’m not. I’m not because we have been in a competitive environment and we know how to operate in a competitive environment. When I think about just our Connecticut property alone as an example, we’ve been competing with Rhode Island, New York, New Jersey, Pennsylvania; I can go on and on with the competition we’ve been facing.

This is nothing new to us and we know how to operate in a competitive environment. Making sure that we deliver the best guest experience and deliver the best product to our guests, that we’ll get our fair share of the market and we’ll do so profitably.

I would not be surprised to see Massachusetts get into online gaming at some point in time. They’ve been talking about it for years. This is going to keep on expanding, but we’re going to continue to do what we need to do 20 | GAMINGAMERICA

And what exactly do you need to do to stand out above the competition?

It’s about a fully-integrated resort and providing our guests with a wide variety of options. It’s about delivering the best guest service possible. Each time a guest comes to us, we want the guest to be rating us as an ‘A.’ By doing things right, you build loyalty, and drive traffic of the people who will spend more money and more time with us. That’s our focus each and every day: to make sure that every guest experience is a great one, not just a good one.

Is the casino today centered around the casino floor or has it become much more a multi-faceted entertainment complex?

MGE has expanded its holdings considerably over the last decade and a half, from its original Uncasville, CT base to properties all over the country and even the world. What expansion plans have your attention at the moment?

That’s a great question. We’re always exploring opportunities. As you’re probably aware, we have recommenced the process of constructing a multi-billion-dollar resort in Incheon, South Korea. That is a focus of ours. We are in a twenty-month sprint right now to get that open and operating by the end of 2023.

But we continue to look for properties.

We get approached by potential partners all the time. We have a group that specifically seeks out opportunities.

We are looking for things that are going to be right for us in the long-term.

We don’t want something that’s going to be with us for a year or two, we want something that’s going to be with us for a long time to come, something that will support the tribe down the generations.

"HONESTLY, WE DON’T SEE MOBILE BETTING AS CUTTING INTO ANYTHING." Do you see a lot of potential for growth in the South Korean market, or the Asian market more generally?

South Korea itself, and Asia in general, is the most underserved market when you look at the per-person versus the number of gaming positions available.

Asia is by far the lowest served market in the world. We are excited to be entering the Korean market. We are, as I said, approximately 20 months away from doing so, but we are building an integrated resort there.

It’s going to have a marina, a casino, three hotels, a Splashdown Park, retail, dining, and shows. We are really looking forward to that development and I think it’s a great opportunity for us and I’m really excited about getting that open and operating. Right now, we’re in a spring to get construction done, the island done, procedures in place, and get it up and operating.

GAMING AMERICA | OLIVER LOVAT

ONLY A MIRAGE Gaming America regular, Denstone Group CEO Oliver Lovat, provides a final appreciation of the resort that made modern Las Vegas.

In case you missed it, Hard Rock has announced its return to Las Vegas. This is good news, as one of the world’s most recognizable brands returns to the home of gaming and entertainment. However, the property that it acquired was The Mirage, and Hard Rock’s return will see the demise of the most important casino ever built.

The current owner, MGM Resorts, acquired the property in its $6.4bn merger with Mirage Resorts in 2000. The sale of the operations contract by MGM Resorts was inevitable, and indeed good business. With exposure across the Strip and having extracted value by selling the real estate of the asset (as part of a $4bn+ deal), the fee of over $1bn for the operating contract proves Kerkorian’s acquisition two decades ago was one of the greatest deals ever done in corporate America.

It is easy to forget that, when it opened, it had been over 15 years since a new resort had opened on the Strip. Reno, Atlantic City and even Laughlin had seen significantly more resort development than ‘moribund’ Las Vegas.

On opening on November 22 1989, The Mirage transformed what was possible in a casino resort, starting the development boom in Las Vegas; which in turn led to national and global attention, enabling 22 | GAMINGAMERICA

casino expansion in Asia and influenced resort development across the globe.

CONCEPTION Back then, Steve Wynn took a huge gamble. He had success in operating The Golden Nugget properties in Las Vegas, Atlantic City and Laughlin. But his Las Vegas venture had to be much bigger, better and compete at the highest level, taking on Caesars Palace, which stood alone as the Strip’s gambling behemoth.

In terms of scale, Caesars, The Desert Inn, Sands, Sahara, Circus Circus, Flamingo, Stardust, Hilton and Riviera had added rooms and facilities over decades to become mega-resorts.

The Mirage was the first resort to open fully formed, with over 3,000 rooms ready to go on day one. It set the template for opening strategies for all future properties.

Wynn assembled the finest team of casino architects and designers ever seen, before or after, for this project.

The project was driven by Steve, with Kenny and Elaine Wynn, Joel Bergman, Paul Steelman, Scott Walls, Brad Friedmutter, Henry “Bud” Conversano, DeRuyter Butler, Roger Thomas and Don Brinkerhoff all contributing to various aspects.

All worked on many other notable projects, but never together again.

Although the “Y-shape” was used before, the property modified the design to attract all the customer groups, from high-end gamers, conventioneers and leisure travelers. The design was not based on building the most rooms possible, but the optimal rooms to service guests properly. The property was set back from the street, offering a postcard-perfect photograph, featuring lush landscapes and an exploding volcano. The signature attraction became iconic on day one, and over the next 20 years new resorts featured large-scale, external design aspects as a matter of course.

Wynn understood the importance of framing visuals a generation before the advent of Instagram and social media.

Indeed, we know the customer journey was strategized at The Mirage before it became design parlance, with the tropical atrium and aquarium in the world occupying guests on arrival and a planned flow evident throughout.

ESCAPIST EXPERIENCE Of course, the casino was important, but it was unlike other properties: The Mirage was not all about the casino;

OLIVER LOVAT | GAMING AMERICA non-gaming revenue was greater than casino revenues, and gaming revenue was record breaking. This flipped the conventional business models for Las Vegas casinos.

Except for Caesars Palace, which stood as an outlier (thanks to the creative, but unreliable, genius of developer Jay Sarno) casino resorts had been designed to be functional, first and foremost.

The Mirage experience was highly functional, but was the first to properly codify Sarno’s design creativity to optimize the emotional aspects, deliberately stimulating senses as a strategy. This was the first property to use scent, the first to study the effect of lighting on guest behavior, the first to inculcate intimacy between guest and employee, and the first to measure service distances in relation to timing. The Mirage was the first customer-centric, experience-driven integrated resort.

Contrary to popular belief, the Mirage wasn’t themed to be a Polynesian resort, it was themed for the customer to feel like they would in a Polynesian resort.

That emphasis on feel is what is lost to many. It is subliminal. Interior designer Roger Thomas describes it as “evocatecture;” that is where the physical environment is designed specifically to elicit an emotional response.

The outcome of a positive experience is to repeat it. The consequence of a positive experience is a memory. This property was the first to deliberately implement the psychology of the customer experience and drive loyalty through emotion.

echoed the brightness of the property palate. Adorned bags, T-shirts, ashtrays, casino chips and a variety of souvenirs gave the property a distinct brand equity; that was both monetized in the gift stores, but also extracted off-property by customers for their weekly poker game, a constant reminder of their recent Las Vegas trip and trigger to book the next one.

In advertising, the property was portrayed as ethereal, building anticipation for customer visits.

as headliner, The Mirage was the first to launch a performance show on this scale; it was the most expensive show ever produced with a cost of over $100m, producing revenue of over $40m per annum. The 1,500 capacity, purpose-built auditorium was sold out twice nightly, between 1 February 1990 to 3 October 2003, at market-leading ticket prices.

The tigers were on display on-property, and will remain so, alongside the dolphin habitat, until the new owners assume management of the property.

The Mirage also launched Cirque du Soleil, with Nouvelle Expérience running for over a year at the property, before the group brought Mystere to Treasure Island, which opened adjacent to The Mirage in 1993.

EMPLOYEES AND TRAINING

OLIVER LOVAT Denstone Group CEO

BRANDING AND MARKETING

In 2019, Alan Feldman, who opened the property as Head of PR for Mirage Resorts, told me: “When communicating the resort, we never showed the property. It was left to the imagination. Steve didn’t want developer speak. Whatever Donald Trump did, he wanted the opposite.”

For decades, casino resorts saw marketing as a relatively narrow endeavor, adopting desert motifs and promoting their properties through external drivers, namely entertainment, to attract gaming customers. The Mirage also did that, but became the first property to have a distinct image as a logo, designed by acclaimed graphic artist Clement Mok, who latterly served as Creative Director of Apple.

The logo, featuring tropical palm trees,

Although illusionists had featured in casino resorts before, The Mirage was the first to put them front and center of the entertainment experience. Siegfried and Roy, and their unique menagerie of 58 white tigers and 19 white lions, were integral to the brand, messaging and experience of The Mirage.

Shying away from a traditional performer

ENTERTAINMENT

Staffing a mega-resort from scratch had never been done before in Las Vegas.

Mirage Resorts and the labor unions rewrote the employee contract, was the first to give employees shares in the company and created leadership and management training programs, with a clear pathway for training and career growth. The Employee Dining Room and back of house facilities were as nice as the resort itself, and better than some public dining facilities in other properties.

Head of Human Resources, Arte Nathan, told me: “In the 11 years of operations, Mirage Resorts had one grievance and no arbitrations. Nobody else even came close: it wasn’t that we rolled over in our management decision making, we worked with the Union to resolve issues and conflicts before they ever got started.

It was truly a partnership.”

Today, most training and development programs throughout the city can be traced to The Mirage and dozens of executives that have led multiple properties in the subsequent decades served their formative years at The Mirage. There is also a further cadre of younger executives in the industry that had parents that moved to Las Vegas GAMINGAMERICA | 23

GAMING AMERICA | OLIVER LOVAT

"IT IS EASY TO FORGET, WHEN IT OPENED, IT HAD BEEN OVER 15 YEARS SINCE A NEW RESORT HAD OPENED ON THE STRIP." CORPORATIZATION Perhaps the most immediate outcome of the opening of The Mirage was the effect that it had on corporate America’s attitude to casinos.

Drexel Burnham Lambert financed the property, in part via corporate bond issuances. Mirage Resorts was the first to borrow and build on such scale, and to do so in full view of Wall Street and other investors. The combination of the experienced and credible leadership team, quality of development and the prompt return on investment, made Las Vegas casinos an investable asset class, and lenders lined up to finance “the

VISITOR VOLUME ROOM INVENTORY ROOM TAX AIR PASSENGERS CA/NV DRIVE CC GAINING REVENUE

new resorts, all following the template as seen at The Mirage. The cumulative effect of all these investments was to usher Las Vegas to a city of attractions rather than a gaming hub.

next” Mirage.

Within 10 years of The Mirage’s debut, 14 new mega-resorts opened in the Las Vegas resort corridor. It went from a marginal city of relevance, to one of the most important entertainment and business hubs in the world, and soon to be a Super Bowl city. There is little doubt that, without The Mirage, Las Vegas’ growth would not have been possible.

to work at The Mirage. In many ways, the professional leadership within Las Vegas, and exported throughout global hospitality, owes significantly to Wynn, Nathan, Baldwin, Shier, Schorr and Hornbuckle; the leadership team that originated the operational strategy first seen at The Mirage.

LEGACY

CUSTOMER Although visitation to Las Vegas has always been consistent, the MGM fire and Atlantic City expansion had reduced the demand of the city to gaming and leisure customers. Indeed, by 1989, gaming revenue in Atlantic City had long surpassed that of the Strip.

The Mirage, with headliners Siegfried and Roy garnering global attention, media coverage of this apparent wonder and tales of those that had visited the new resort, appealed to not just traditional gamblers, but visitors from throughout the US and beyond. In 1988, the year before The Mirage opened, 17.2 million people came to Las Vegas. In 1990, the first full year after opening, that number was 20.9 million, a 22% increase in visitation. That growth was to be constant and by the year 2000, visitation had increased 108% to nearly 36 million people. The customer profile changed – as did the offering. Rival casinos invested in a range of non-gaming amenities, notably The Forum Shops at Caesars Palace, and everything from large production shows to theme parks to luxurious pool areas in the

We can define Las Vegas and the global gaming and hospitality industries as pre and post-Mirage, it is as simple as that.

In 1989, the population of Greater Las Vegas was 673,000. Today it is over 2,800,000 people.

As we have briefly demonstrated, it is the single most important casino in the history of the world, in terms development, entertainment programming, branding, marketing, training and the importance of the customer journey in all aspects of the operating strategy.

The Mirage changed it all and acted as both a benchmark and catalyst for future development. Without it, there would have been no MGM, no Bellagio, no Wynn, no Venetian and certainly no modern Las Vegas.

The table below illustrates the effect The Mirage had on Las Vegas.

The days of The Mirage are numbered and soon it will be gone. Its replacement, the new Hard Rock Hotel, will be celebrated, with a giant guitar replacing the erupting volcano.

Customers will enjoy Hard Rock’s offering, but for those of us that study this industry, we will have lost our icon, our paradigm, our lodestar.

A property that was deliberately developed to create memories will soon be just that.

Gone, like a Mirage. % CHANGE % CHANGE (88-90) (88-2000)

1988 (PRE-MIRAGE)

1990 (POST-MIRAGE)

2000 (10 YEARS AFTER MIRAGE OPENING)

17,199,808

20,954,420

35,849,691

21.8%

108.4%

61,394

73,730

124,270

20.1%

102.4%

$38,175,535

$49,493,569

$130,550,852

29.6%

242.0%

16,231,199

19,089,684

36,865,866

17.6%

127.1%

3,003,247

3,751,181

5,951,009

24.9%

98.2%

$3,136.901,000

$4,104,001,000

$7,671,252,000

30.8%

144.5%

The effect of The Mirage on Las Vegas

24 | GAMINGAMERICA

GAMING AMERICA | POINTSBET

A DIVERSE FUTURE Gaming America's Henry Moore spoke with Dr Eric Lee, Vice President of Diversity, Equity and Inclusion at PointsBet, to discuss his history, the operator's goals and the challenges facing a gaming industry seeking a more diverse future.

How are you finding this new position?

Oh, I am having a blast. I don’t think there is another opportunity that combines two of the hottest fields in terms of diversity, equity and inclusion (DEI) and technology, than the online gaming and sports betting world. It is really incredible.

Can you tell us a bit about your career and personal history to date?

I spent much of my early career in higher education in a number of roles at the University of Nebraska and the Colorado University Online, which was where I was really introduced to education technology for the first time. My interest in DEI led me to Tech Systems where I partnered with Franklin Reed, who is now their Executive Director, and Ian Moses. Together, the three of us really built and implemented a DEI strategy that encompassed the company’s 120+

26 | GAMINGAMERICA

physical sites and over 5,000 employees.

I think that experience really led me in a completely different direction as it related to DEI and technology. That’s where it all began, and the common thread that really runs through my career is moving energy, improving organizational culture and really thinking about the way employees experience the workplace.

These were the critical factors in my joining PointsBet. I also recognize that PointsBet is an organization that – this became clear when meeting with the CEO – is completely dedicated to its mission, and allows employees to be authentic. With all of that in mind, it just felt like the right place for me.

Why PointsBet? What makes this position the right one for you?

For me, the opportunity that gaming represents in the US right now is incredible. I believe PointsBet, as an online gaming company, is at the forefront with its technology stack.

I look at its evolution and the increasing demographic shifts we are going to see in online gaming, and this felt like an opportunity to make sure the company reflected that diversity. This is a chance to do that from the beginning; we have the foundation here ready to roll.

There are a couple of things. One, the opportunity for me to work directly with Michelle Carpenter, our Chief People Officer, and to work directly with Johnny [Aitken], our US CEO. The experience is one you cannot turn down. When I think about PointsBet and my decision, it comes down to leadership, and an undeniable opportunity to contribute to the building of the culture and employee experience.

Following this, why gaming and sports betting?

POINTSBET | GAMING AMERICA

DR ERIC LEE PointsBet VP of Diversity, Equity & Inclusion What is the process like when entering a company with the goal of strengthening its approach to DEI? Well, in regards to PointsBet, some of the work was really done before my arrival. We have a DEI committee, which is composed of some really talented internal employees. This group had already come together and was really working to build a foundation. That ultimately allowed me to onboard into the organization with a complete focus of meeting the needs of our 260 employees. I am currently on a major listening campaign to better understand the people of our organization, their

needs, the things that they value, as well as their expectations. So, you have a foundation and you have a listening campaign and then, simultaneously, we are working to collect qualitative and quantitative data to better understand our employees. We want to know not just what the numbers say, but how people feel. What will happen is that over the next few months we are going to dive headfirst into developing our immediate and long-term diversity plan, to ensure our alignment to our mission. While doing this we need to ensure that the culture, the benefits and the career opportunities meet our employees’ needs. I think we need to understand the people and their needs; we need to build a plan that aligns to our mission, implement that plan, measure the results, and then start the process all over again to ensure we continue to be responsive to the organization and its people.

How can our industry as a whole move forward to a more diverse future?

I think about this in two phases. On the gaming side, extending the learning and understanding of games development in underrepresented populations is really important. We know that building on a student’s natural interest in gaming represents an opportunity to increase their engagement in science, technology, engineering and math. I am a huge fan of

using fantasy sports to actually teach math concepts. As a former educator, I know that when a student’s interest meets relevance and context, they will have higher academic outcomes. This, then, is a really important factor in us being able to continue to create and attract the most talented people. Next, I think about it from a sports betting point of view: the train has already left the station.

We already know that women make up 20% of the sports betting population, and that 30% of sports bettors are representative of non-white ethnicities.

So we have to be mindful that legal sports betting here in the States is a new thing, so we can expect major shifts in the demographic participation as the country begins to address online gaming. Overall, by keeping these things in mind, I think the industry can continue its path to becoming more diverse, equal and inclusive. Our partnership with the University of Colorado does much of that by exposing students to the key components of our business.

You have done a lot of work in your community over the years.

How important to you is being involved in the community?

It is really important. We have partnerships and continue to become engaged. We see ourselves as a community-based organization; and so we want to make sure we have opportunities to serve the people that make us who we are.

GAMINGAMERICA | 27

GAMING AMERICA | FLEXIA PAYMENTS

A PAYMENTS PERSPECTIVE ON TRIBAL GAMING We spoke with Gina Lanphear, Director of Marketing at Flexia Payments, to discuss the company’s perspective on tribal gaming, as well as the upcoming NIGA tradeshow.

GINA LANPHEAR Flexia Payments Director of Marketing What is Flexia’s approach to tribal gaming? Does it differ in any way to your approach to newer commercial gaming operators?

Just as no two casino operators are alike, cashless convenience is also not a one-size-fits-all solution. That is why we collaborate with our tribal partners to customize our solution to the needs of their operations, and fully integrate the robust and innovative capabilities of our product into their existing systems.

While many cashless solutions constrain themselves and the gaming operator, by focusing solely on funding a gaming account or gaming session without cash, we aim to take a different approach at Flexia. Our goal from the beginning has been to not only provide a seamless 28 | GAMINGAMERICA

cashless experience, but to more fully address the various configurations that the tribal operator might have – including single casino vs. multi-casino groups, integrated loyalty system vs. stand-alone loyalty system, one-to-one gaming account or one-to-many gaming account – as well as to address the various tribal gaming channels of land-based, online and sportsbook. And we realize that tribal enterprises consist of more than just gaming operations. Many include integrated resorts, retail outlets, golf courses, gas stations, convenience stores and more. The Flexia platform hopes to provide a seamless cashless solution across these business entities.

With the growth of commercial operators across the US, especially in sports betting, do you have some insights into how tribal operators can compete with these ever-expanding giants? Or should they be looking to work with them?

Sports betting is certainly having phenomenal progress and tribal casino operators are embracing this new area of gaming as a revenue growth opportunity; and a new form of entertainment for their customers. Fortunately, operators have many options when it comes to sports betting programs and software, as most sports betting operators are all using third-party sports betting platforms with similar technology. The question for the casino becomes: what’s more important – promoting the casino’s own brand with the same technology as the big sports

betting operators, or benefitting from the marketing spend and brand recognition of working with the major sports betting operators? We hope that Flexia’s platform can serve as a middleware between land-based gaming accounts and sports betting accounts, and can facilitate the migration of your land-based customers to your online gaming platform.

What will you be showcasing at the NIGA tradeshow this year? Do you have any upcoming products you would like to preview?

We are expanding our presence at the upcoming Indian Gaming Conference & Tradeshow, where we look forward to demonstrating the benefits and operational advantages of Flexia’s Cashless Solution for tribal gaming operations and beyond.

The customizable, fully integrated Flexia Cashless Solution is designed with the hope of combining multiple accounts – casino and online gaming, casino loyalty program and a Mastercard account – in a single mobile solution, providing players flexibility to fund and use their gaming accounts; and enabling customers to earn casino loyalty points for spend outside of the casino.

We will also demonstrate that Flexia lets players earn casino loyalty points from casino play and Mastercard spend both inside and outside the casino; allowing customers to achieve VIP loyalty status faster and access unique, member-only promotional benefits customized to their preferences and spending habits.

GAMING AMERICA | ARI FOX

ESPORTS IN THE CASINO We spoke with Ari Fox, of the Casino Esports Conference, about all things esports betting; including the future of the casino experience, how publishers can capitalize on the huge gamer market globally and the importance of authenticity when creating an esports wagering platform.

When the Covid-19 pandemic first put the world into lockdown in March 2020, taking with it all live sports events and in turn the pastime of millions of bettors across the globe, esports was there to step in.

Indeed, as people got used to spending time indoors, betting on popular video games became a regular occurrence, with products such as FIFA, League of Legends, and Counter Strike Global Offensive taking center stage, keeping the betting market alive. However, since then, esports betting has receded into the background, once again being usurped by its older, and much wealthier, cousin. With that in mind we caught up with Ari Fox, of the Casino Esports Conference and Gameacon, to get the rundown on the current state of 30 | GAMINGAMERICA

esports betting, and the potential it has to become a gaming powerhouse.

Can you give us a brief overview of esports betting in 2022?

And the aims of the Casino Esports Conference?

So, New Jersey just recently passed a law to allow esports betting for the very first time. There were a number of legislative issues involved in this because they (New Jersey lawmakers) were concerned about bettors being under the age of 18, so they made an addendum where as long as the majority of the players are over the age of 18 then that game can be sanctioned and allowed for wagering. That happened

recently and other states, like Nevada, are looking into this also.

Because of the sheer numbers the esports community can bring, there is a large demand for esports wagering to work. However, I always say to people that there is a bigger picture that the industry as a whole is missing, this is why we run the Casino Esports Conference (CEC). When you compare esports to traditional sports, which is commonly done, those who come at it from the sports wagering side judge them via the same parameters; this shouldn’t be the case. Thus, the purpose of the CEC is to say, “if you want to extract anything from the esports bettor, in terms of brick and mortar, the bigger picture needs to be

ARI FOX | GAMING AMERICA expressed in an immersive way, more than just wagering.”

How can esports operators compete with traditional iGaming and sports betting operators? Should they even try?

As you know the whole purpose in regards to esports wagering is the numbers. If you have three billion people in the world that are gamers, there are 10% of those who might choose to bet. This 10% might place a bet, but then they ask, “what is there to do?” – esports fans want more than just betting. Maybe operators can let punters play with other esports players? This is what we are suggesting, the esports community is very different to the community that regularly bets on sports. The sports community will watch the entire game and root for a player, the fan is disconnected from the action.

Esports players are so much more connected to the action and they want to interact with those players. There are levels to how you can integrate your offering as an esports wagering platform to gain better access to engage and entertain the punter.

That is what they want, entertainment and not just the competitive side of it.

What can a casino property do to integrate esports into its offering?

That’s a very good question and the answers are endless. The technology and the ability to utilize it is endless. And this technology is exactly where the younger generation lies, they live in a world of technology. Operators will need to produce much more immersive experiences, holograms, AI, these things will need to be embraced at properties to engage the younger audience and grow esports betting. There is a misconception that gamers do not want to go to physical properties but it’s a misnomer, they want to go out. I’ve spoken to developers, players, esports players and the pandemic has hit them as hard as anyone else. There is also this belief that because there was this shining moment during the early stages of the pandemic where esports became the

belle of the ball, so to speak, but it really sent a false sense of what esports really is. It needs interaction. Gamers want to connect on a social basis, just like how film fans want to talk about a great film they have seen, it’s the same with gaming.

What innovations will lead to the growth of esports wagering?

Virtual reality will be huge. There is going to be the possibility for fans to engage in an on-field way. Bettors will be able to see the actual characters in a virtual space.

Do you think the games that could catapult esports betting into the mainstream already exist or are they yet to be released?

I think new games will constantly be released, that’s the nature of the industry, the nature of video games. We want to encourage indie game development.

Minecraft was an indie game before it became as huge as it is now. There is a lot of creativity in this industry. At the moment, Apex Legends gets a lot of attention, as does the League of Legends Championship and the reason for this is the numbers, everybody looks at the numbers. Numbers drive everything in regard to the money. However, in esports the money is there, it will always come, but you actually need to

ARI FOX Casino Esports Conference Executive Producer

have the passion for what you are doing.

Gamers will see from 50 miles away if you are not passionate, and they won’t engage. This has been the case for so many companies that have attempted to break into the esports wagering business. If they want to be involved they need to engage in the community. I won’t name names but there are some companies, often ones that start in the sports betting market, that fail to engage. One of the leading esports wagering platforms right now is Pinnacle, they provide a good service with stats and data but they can go up another 50 knots and get more people and more integration, not just by throwing their logo on things, but really integrating into the community. What does that mean? Interacting with them socially, esports wagering platforms need community representatives. Every video game publisher has one. Operators need to go out to the community, attending events and talking to actual people.

Are there developers that are on board with esports betting?

Currently they are keeping an arms length distance from it. The reason for this is public relations. There are two worlds here, and we need to bring both together. Both make a lot of money.

The publishers will tread very lightly when working with casinos, because they do have younger audiences and they want to keep them engaged and coming back.

The publishers are concerned about legal repercussions of younger players.

Will they be sued? But to be completely honest, of course there are younger people who play video games, but there are also younger people who play sports, are they constantly wagering? No, I do not think they are. There are restrictions, and this is how it should be laid out for esports betting.

Ultimately, if publishers keep resisting the wagering product, the casino industry will find a way to make their own games.

If game developers don’t catch this train, it’s going to miss the station.

GAMINGAMERICA | 31

GAMING AMERICA | TRIBAL GAMING

TRIBAL GAMING PAST AND FUTURE Gaming America’s Cameron Saunders takes a look at the journey tribes took to become one of the most significant pillars in American gaming... and where they are going next.

It was in 1832 when the US Supreme Court granted Native American tribes the right to self-rule within the boundaries of their reservations. Control over mineral rights, hunting and fishing were the overriding concerns of the day, but in this ruling came the germ of what was to become a multi-billion-dollar industry: tribal gaming, a sterling success story for native peoples in what has otherwise been a catalogue of dislocation, horror, 32 | GAMINGAMERICA

sorrow and poverty.

It was to escape this last affliction – the persistent poverty ubiquitous within reservation communities – that tribes began developing gambling. With this source of revenue, the reasoning went, the money could be reinvested, could benefit the people, and the cycle of poverty could be broken.

Florida’s Seminole Tribe was the first to get into the game when it began

operating a bingo hall in the 1970s.

But it was the landmark 1987 Supreme Court case, California vs. Cabazon Band of Mission Indians, that really laid the groundwork for rapid growth of tribal casinos across the country.

The Supreme Court, ruling in favor of the Cabazon Band of Mission Indians, harkened back to 1832: they established that, for whatever forms of gambling are allowed within a given state, a reservation

TRIBAL GAMING | GAMING AMERICA

in that state will have the right to operate any of those forms of gambling unencumbered by state regulators.

In other words, the tribes have the autonomy to regulate gambling on their lands so long as that type of gambling – whether bingo, roulette or slots – is permitted throughout the state.

This ruling would later be codified into law when Congress passed the Indian Gaming Regulatory Act (IGRA) in 1988. This act further stipulated that profits from the casinos must serve the welfare and economic well-being of the tribe in question. Also – in a move that would reverberate controversy through subsequent decades – the IGRA required that the relationship between tribes and state governments be subject to a gaming compact that be renewed on a rolling basis, on a timeframe varying from state to state. The rights of the reservation were now inextricably linked to whatever state it happened to be in.

With the promulgation of IGRA, the groundwork was set for a tribal gaming

boom in the United States. The last three decades have seen tribal gaming emerge as one of the most dynamic sectors of the hospitality industry. Tribal casinos now dot nearly every region of the country and are lodestars of tourism and entertainment. In 1988, there were 70 Indian reservations (only 12% of the total number of reservations in the country) in 16 states offering some form of gambling. These generated a total of $100m in revenue. By 2004, revenue had skyrocketed into the billions: tribal casinos in California alone saw $4.7bn that year; in Connecticut, it was $2bn; Minnesota, $1.4bn; Arizona, $1.2bn. This spurt has continued: by 2018, the 252 tribal governments that oversee gaming operations saw a cumulative annual revenue of $33.7bn.

With this revenue come benefits for the tribal communities. Education, financial stability and health have all improved on reservations where this windfall is experienced. Community centers, places for recreation, social

services and wellness programs have all been bi-products for those tribes who have successfully embraced and managed gaming. For these communities, there is the ability to be financially self-reliant in a way that was previously impossible.

In this manner, tribal casinos perform a vital social function. Rates of return migration to reservations, for instance, is on the upswing for those people successfully managing this new economic fount.

But it must be remembered: tribes, reservations, and each’s approach to regulated gambling are by design disparate and not at all monolithic.

Each jurisdiction has the autonomy and authority to do what they see fit for its people. Some tribes have decided not to embrace gaming at all. Of those who have, some have fared better than others, and this is for a multitude of reasons. Adding to the complexity of the state of tribal gaming are the aforementioned state compacts. With every tribe having to negotiate with the state government, some have gotten a GAMINGAMERICA | 33

GAMING AMERICA | TRIBAL GAMING better deal than others. Minnesota, for instance, has a state compact that was signed in perpetuity. The tribes in that state have a relatively inviolable (the tribe would have to want to change the compact for it to be renegotiated) stake in gaming. By contrast, in Oklahoma the compact is up for renewal every 15 years. At this moment in time – as is revealed in this issue’s pages – the state’s governor has taken an abrasively contrarian stance regarding tribal rights, a move which presents unique challenges for Oklahoma’s robust tribal gaming community.

Further complicating the matter is the tide of legalization that has been sweeping over the country for the last several years. It shows no signs of abating. Indeed, it will likely become the new normal. Today we are witnessing the rise of the commercial operator, of state-sanctioned non-tribal casinos, and of a mobile betting industry where the kingpins are non-tribal operators with national reach, like FanDuel and DraftKings. These all present a formidable challenge to what has been a relatively easy rise over the last three decades. According to the American Gaming Association, tribal entities account for 45% of all gaming revenue in the nation.

As the industry grows – welcoming new players and a plethora of possibilities – how could commercial operators not cut into what had once been a comparably exclusive domain for the tribes?

Some tribal players are understandably wary of these developments. In California – the nation’s single largest market by population and a state where the tribes hold a very strong hand in terms of gaming control – legal sports betting is almost certainly going to be on the ballot come November.

The tribes want to keep sports betting retail; they want to keep it to the reservations. They will likely be fighting a huge campaign – tens of millions of dollars – by commercial operators who want to see the state become open to mobile sports betting.

34 | GAMINGAMERICA

Victor Rocha of California’s Pechanga Band of Luiseño Indians is a foot soldier in this battle, a consultant, publisher and activist working for tribal interests.

“The amount of money people are talking about makes them go insane,” he tells Gaming America.

Assuming the mantle of 500 years of indigenous history, Rocha cannot help but be cynical: “As a Native American, it’s kind of typical. Everything the Native Americans have ever had – be it the land, water, minerals – someone is always going to come and say: ‘You guys aren’t using them right, you guys aren’t exploiting

one being the single largest commercial operator in America. That group’s CEO, Ray Pineault, takes a decidedly pro-commercial view on tribal matters.

After the 20-plus years that he has been in the industry, “tribes have become experienced at being operators and at operating in competitive environments.

As good business people, we understand how to operate our entities and how to compete with these big commercial operators... Tribes are highly competitive because they do understand the business and they operate very sound businesses.”

Pineault is not wrong. There are tribes

"WITH THE PROMULGATION OF IGRA, THE GROUNDWORK WAS SET FOR A TRIBAL GAMING BOOM IN THE UNITED STATES." those opportunities.’”

The rise of commercial gaming is, in his view, a huge threat to the progress that tribes have made over these last few decades. These new players “have a very aggressive commercial market, and a lot of new people in the industry who don’t really have a history or who don’t really care about what came before them.”

On the other side of the debate, one could argue there are untold opportunities for tribal operators resulting from the rise of regulated gaming.

In Connecticut, after mobile betting went live last October, the state compact maintained that mobile sports betting operators must act in concert with tribal casinos. Therefore, if Connecticuters are betting at a higher volume thanks to legalization, the tribe stands to benefit.

In this spirit, the tribal behemoth Mohegan Sun Gaming & Entertainment recently entered a partnership with such companies as Kambi and FanDuel, this last

that have become entrepreneurial to the point that they can match the reach of any commercial titan. The Seminole tribe of Florida is the most sterling example of this possibility: it bought Hard Rock International in 2006. It has a global footprint in gaming, hospitality and, indeed, mobile betting. San Manuel Band of Mission Indians is a similar story of triumph: the California tribe recently purchased the Tropicana Hotel, making it the first tribally owned casino on the Las Vegas Strip.

But these are exceptions. For every tribal entity that reaches such heights in the world of commercial gaming, there are scores of others who stay local, who rely on gaming revenue to support the life of their people, and who wish to maintain the benefits of tribal gaming. How they adapt to this fast-changing world will define the next chapter in the history of, not just tribal operators, but Native peoples in this land.

GAMING AMERICA | OIGA

OKLAHOMA TRIBES TAKE A STAND Gaming America sits down with Matthew Morgan, Chairman of the Oklahoma Indian Gaming Association, to talk about the standoff between the state governor and tribes over their gaming compact; as well as the future of an industry that is being upended by change.

Could you give our readers a brief history of the Oklahoma Indian Gaming Association (OIGA), how it fits into the state’s gaming ecosystem, and some of your successes over the years?

The OIGA has been around since 1988.

We followed after the federal law was established: the Indian Gaming Regulatory Act (IGRA). We consist of members of tribal governments here in Oklahoma and also business partners in the industry that participate in Oklahoma gaming. We serve mainly three purposes: first, we attempt to educate our members, and those working in the policy side of gaming, about what our needs, wants, desires and concerns are. Secondly, we facilitate conversation from our membership to those groups, to make sure there is robust communication that is always going to assist them in whatever their economic concerns or endeavors are around gaming. Thirdly, if there is unanimity around certain issues, we carry that message forward as well, so that it’s not left up to our individual members.

We’ve been involved since day one of gaming in Oklahoma, moving from paper bingo up to electronic Class II gaming (as determined under the IGRA). In 2004, we were heavily involved in the discussion to get a gaming compact with the state of Oklahoma. Then, in the past couple of years, we have been the focal point of our members in dealing with a dispute of gaming with the state of Oklahoma 36 | GAMINGAMERICA

"THE WAY THE AGREEMENT WORKS IS THAT NEW FORMS OF GAMING ARE BROUGHT AS AN AMENDMENT TO STATE LAW."

we have an environment that will allow them to pursue those; whether that’s forms of gaming or amenities like hotels.

I think the all-of the-above strategy is something that tribes must look at.

But again, we have 39 tribes, 35 of which participate in gaming, and this is in a state with four million residents. There’s a lot of competition; there are a lot of unique pockets of marketing and operations happening within those jurisdictions.

I think, while they compete on a day-to-day basis for those customers, they all understand that having a robust gaming environment here is better for everyone.

What is the OIGA’s stance on the rise of commercial operators and the waves of legalizations that have been going on across the country for the last several years?

What if legalization were to come to immediately neighboring states. I’m thinking especially of Texas because it’s such a big market. Is that seen as an existential threat for the industry in Oklahoma?

We are always watching whatever’s happening in the gaming industry, whether that’s commercial or tribal. Being a form of entertainment, a lot of our members are acutely aware of regional entertainment options that may present opportunities to partner with or, in terms of commercial gaming, may impact their gains. We know consumers are willing to travel to partake in whatever forms of gaming they choose.

It’s always important that we work with our stakeholders in the state of Oklahoma to try to make sure whatever our customers might want,

First, I think it depends on what gaming you’re talking about. Secondly, it’s not a threat to the entire industry. You would have to look at what the customer base gets from those tribes which operate along the Oklahoma southern border.

Of course, we’d look at that more in depth and decide whether there is an opportunity there, or a threat to what is being done in tribal jurisdictions.

We have a handful of tribes here in Oklahoma that participate in the marketplace across the globe in gaming efforts. They have been known to go

and its governor, regarding some of those compact renewal terms. In a nutshell, that’s what we do.

GAMING AMERICA | OIGA outside their tribal boundaries and work within the commercial markets, so those tribes would see changes further afield as an opportunity. Other tribes that may not pursue that economic endeavor may see that more as a threat to their operations.

They may look into how to buffer against changes in neighboring markets or utilize some of the partners there to improve on what they’re doing.

to operate under the belief that if no new terms can be agreed on, the current agreement just gets rolled over for an additional term.

Ultimately, the federal courts here in Oklahoma sided with the tribes in that dispute, and the agreement has rolled over for a 15-year term.

Can you tell me about these tribes that go out and becomes more involved in the world of commercial gaming?

The way the agreement works is that new forms of gaming are brought as an amendment to state law and then they are offered as a supplement to tribes if they’d like to partake or not. And tribes that are in a position to adopt sports betting may have a desire. But, remember, there are 35 tribes operating here, and every one of them has a unique view.

What that looks like in terms of what you may be able to offer, how you may be able to offer it, what the fee-sharing agreement looks like... all of those issues are up for debate and consideration.

But ultimately, tribes need an offer from the state before they can do anything.

Again, every tribe is unique in its governmental structure and its economic pursuits. It’s not necessarily that the ones pursuing commercial gaming are bigger or wealthier. It depends on what a tribe’s purpose or goal is in terms of economic endeavors. For some of our members, gaming is not a foundational part of their economic life. For others, it is more important in terms of business impact.

A lot of those tribes that try and pursue commercial gaming have a unique expertise, which lends itself well to establishing and working outside of their boundaries. It may be that some of the operations, or other associated services, they are already doing lend themselves well to being marketed to a wider audience.

Has this conflict inhibited the ability of the state to allow sports betting?

So the governor is simply not willing to entertain debate on this matter?

From reading media reports, the governor is open to sports betting. But sometimes

The tribal gaming community in Oklahoma is currently at loggerheads with the state government – and more specifically with Governor Kevin Stitt – over the renewal of the state’s gaming compact. Can you please elaborate on the nature of this conflict?

In late 2019, Oklahoma elected a new governor, Kevin Stitt. On the first day of 2020, there was a provision in our gaming compact that allowed for both parties to sit down and decide if they wanted to amend or renew the compact. There was a disagreement from his perspective that, if the two sides couldn’t agree, the agreement terminated. The tribes, though, were very adamant and, with most of the legislative leaders, they continue 38 | GAMINGAMERICA

MATTHEW MORGAN Oklahoma Indian Gaming Association Chairman

we have found that what he thinks makes economic sense does not make economic sense to tribes. He has not elaborated on what he thinks those terms mean. But, just like with every state law in Oklahoma, the legislature has to pass something, present it to him, then he would have the opportunity to weigh in on that point by either signing or vetoing the legislation.

If all that takes place, that is when the offer would come to the tribe. So, there’s a lot of discussions to be had, a lot of things to consider. From our organization’s perspective, we would like to have a robust, respectful discussion on the matter.

Do you think he would rather give the licenses to just commercial operators, like what happened in New York last month?

I don’t know what Governor Stitt’s desire is but I can say this: under the current term of our gaming compact, any expansion of gaming beyond tribal operators would be a breach of that agreement. That breach would allow tribes to continue to operate its covered games, but would alleviate us of paying any type of exclusivity sharing to the state. Last year that amount was nearly $167m.

Were sports betting to become legal in the state, what in the OIGA’s eyes would be its preferred structure?

We are currently in discussion with our members on sports betting and what it looks like. Again, we have a lot of members; we have a lot of unique perspectives. Every one of them has been open to the conversation.

I don’t think every one of them has decided if they want to see sports betting move or, if it does move, what that would look like.

But we all have the opportunity to have those conversations individually as tribes and as stakeholders. At OIGA, we don’t move unless we have unanimous consent among our membership. So at this point, we’re having a conversation, we’re doing a lot of education, we are discussing the pros and cons of the issues that we’ve seen come up. But there is no position yet from OIGA on any of the deals.

YOUR PLAYERS' FAVORITE FUNDING SOLUTION FIND OUT MORE AT NIGA BOOTH #748

WWW.GLOBALPAYMENTSGAMING.COM

GAMING AMERICA | TRIBAL GAMING

STRENGTH IN UNITY As regulated gaming becomes a reality in parts of Canada, it has not been a completely smooth ride. Gaming America had the chance to speak to Chief Mike Delisle of the Mohawk Council of Kahnawà:ke, to learn more about how Indigenous peoples are staking a claim for themselves in this evolving landscape.

In February 2022, the Mohawk Council of Kahnawà:ke (MCK) and the Six Nations of the Grand River (SNGR) – the former located in Quebec and the latter in Ontario – took an unprecedented move among Indigenous communities in Canada, by entering into an agreement of mutual cooperation on gaming. This was an effort to counter a power play by the Ontario Government, to gain control of the iGaming licensing process in the province.

Gaming America had the chance to speak to Chief Mike Delisle of the MCK to learn more about the matter.

What is the nature of the dispute between, on the one side, the MCK and the SNGR and, on the other side, the Government of Ontario?

The story starts about two years ago when we learned through our political 40 | GAMINGAMERICA

connections on the federal government side that they were looking to introduce a private members’ bill; which would change and amend the criminal code, allowing the province of Ontario to be able to conduct and manage single-game betting and online gaming for the province. This would exclude the indigenous population from the right to oversee their gaming endeavors.

Going back, two years ago we started discussion with David Lametti, who was the Minister of Justice and Attorney General of Canada. Those discussions have been few and far between since he visited us in March of 2019. We are now broaching the third year in terms of our discussion, or lack thereof, with Mr Lametti’s office. From there, it progressed.

We tried to form discussions with the Government of Ontario, the Minister of Finance, of Indian Affairs (as it’s called here

in Canada). There was not much success.

The private members’ bill became a government-sponsored bill and then got royal assent shortly after the most recent election. So, it’s law now and they’ve amended the criminal code. This has basically eliminated the avenue for us as indigenous people to have a carveout, which is what we asked for.

We want to be able to continue regulating online and land-based gaming, yet every time a dialogue is attempted with the Government, the talks always stall. They are always sending letters of good intentions to re-open talks but they never follow up on these. And meanwhile, 4 April is still the start date for iGaming to go live in Ontario under the new rules.

So what does that tell us? We’ve had no interaction with them since October.

Lametti is not returning our calls. We have

GAMING AMERICA | TRIBAL GAMING the Indigenous Affairs Minister, Marc Miller – who at this point I would hesitate to call a friend – trying to push Lametti, his colleague, to engage with us to try and look for this carveout.

We’re not going to stop. Our company’s going to continue to engage with players in Ontario, and I’m sure they’re going to go after our payment processors, and try to convince people that we’re pirates of the internet and not to be trusted.

Meanwhile, all we’re looking for is to continue to provide for our community.

Would you say this is a concerted effort on the part of the Ontario Government and commercial operators to block indigenous operators out of a fast-developing industry?

supportive of our socio-economic project, as we call it, and they continue to want to work with us and maintain that. They already have met with the province of Ontario. So, we are continuing a relationship with a huge partner, someone we hope can

"THESE INDUSTRY PLAYERS WANTED TO MAKE SURE THAT IT WAS A GOVERNMENT-SUPPORTED BILL THAT GOT THE SUPPORT IT NEEDED."

Absolutely. There’s no doubt in our minds.

There are forces trying to put this private members’ bill through their votes. These industry players wanted to make sure that it was a government-supported bill that got the funding that it needed.

pull their weight to assure Ontario that we are legitimate. We’re not doing anything outside of Canadian law. We’ve been operating unchallenged – provincially and federally – for over 20 years. We’re hoping that Entain is sure they know what they’re getting into.

What deal could the Ontario Government propose that would satisfy you on your end?

What is the MCK hoping to get out of its memorandum of understanding with SNGR?

Some type of carveout, where we continue to have an open posture and dialogue with them. But, because we’ve been operating a lot longer than they’ve been in existence, we are looking for two things: first, the continuation of our socio-economic project in conjunction with some territories in the province of Ontario, of which Six Nations is one.

Secondly, we are looking for mutual recognition of our gaming authority here, the Kahnawà:ke Gaming Commission.

They’re not going away and have licensed a lot of operators. We’re looking for recognition on both fronts.

We managed to engage with Six Nations, which wasn’t happy with their situation, and several others, who have signed

42 | GAMINGAMERICA

It is something that will be by us, for us and with us. We’re looking to expand this socio-economic project with Six Nations, and with other territories in Ontario as well. The piece of the pie we are getting is less than crumbs at this point.

With this in place, the indigenous communities could be regulators. They could be licensing anyone, not only indigenous companies, but any company that would like to become part of that operating world in Canada. If you look at it, there’s no national law in Canada specifying who can do this. It’s been bestowed upon the provinces to do so in the 1985 constitutional amendment.

Would you say that the MCK has the same problems as the SNGR at this point?

What does the MCK hope to gain from the recently announced partnership with Entain?

First, they were very supportive of maintaining this relationship with Sports Interaction, the brand they have purchased through Mohawk Online. They are very

letters of mutual cooperation with us.

We are trying to establish – by starting in the province of Ontario but eventually across Canada – a body that is similar to what there is in the United States with the National Indian Gaming Association.

MIKE DELISLE Mohawk Council of Kahnawà:ke Chief

I wouldn’t say the same problems.

Because they are in Ontario, because they have an agreement that pays them dividends from Ontario Gaming, they’re in a different boat than we are.

But our brothers and sisters – whether from Six Nations or from other national territories – are looking to join with us.

They are telling the Ontario Government: “You’re not giving us very much.

It’s dwindled over the years, and we have an opportunity here to grow; and become part of the online gaming operating and jurisdictional world.”

GAMING AMERICA | CALIFORNIA

GOLDEN STATE, GOLDEN PRIZE With sports betting legalization to be put to voters in the Golden State next November, Michael Bartlett reports on the divergent opinions.

Ever since the May 2018 US Supreme Court decision that struck down the Professional and Amateur Sports Protection Act (PASPA), a 1992 law that prohibited wagering on sports in any state outside Nevada, the eyes of sports betting operators have been focused on one prize: California.

Sure, legalizing sports betting in New Jersey – the state that led the legal fight that resulted in the landmark Supreme Court ruling – was nice. Pennsylvania was a big prize, and since New York came online January 8 of this year, numerous wagering records have been set. However, California’s population of 39.6 million dwarfs second place Texas (29.7 million) and is twice that of New York (19.2 million).

At a panel discussion on sports betting at the National Indian Gaming Association conference in July 2021, participants referred to the California market as the largest in the country… by “an order of magnitude.” They noted the Golden State has the fifth-largest economy in the world, is more populous than the entire nation of Canada, and has almost two-times the potential of Texas.

44 | GAMINGAMERICA

“This is why there is so much effort, so much money going into California. It is the holy grail,” panelists said.

This will be the first of a series of stories as Gaming America covers the effort to legalize sports betting in California. While many of the 30 states (plus the District of Columbia) that have done so over the past three-plus years did so via their respective state legislatures, California has opted to stick with its direct democracy tradition of ballot initiatives. When the state’s voters go to the polls on or before November 8, they will be presented with at least one, probably two and potentially up to four competing propositions.

The parties behind the ballot props are California’s federally recognized tribes, the state’s legal cardrooms, and a late entrant – a consortium of seven online sportsbook operators led by DraftKings and FanDuel.

With eight months still to go, each of these groups already has raised tens of millions of dollars – with predictions of hundreds of millions set to be spent on getting voters to pick their prop.

The bulk of this story will be about the one measure that is already qualified for

the ballot. It would allow only in-person betting on tribal lands and four selected racetracks. It is backed by most of the tribes in the state and is opposed by the legal cardrooms, who say a provision to allow private lawsuits in lieu of the attorney general makes a danger to cities that depend on cardroom revenue. We also will take a look at a proposal to legalize online sports betting anywhere in the state. It is sponsored by seven sportsbook operators and is opposed by backers of the in-person tribal initiative.

This being politics, the opposing sides make every attempt to tear down the other. Gaming America takes no position on any of these propositions, and made every effort to allow the parties involved to express their opinions.

Of course, even if one or more propositions are approved by voters, expect lawsuits to be filed as soon as the ink is dry!

THE EARLY QUALIFIER If not for the pandemic, California might already have legalized sports betting.

A ballot measure that seeks to allow

GAMING AMERICA | CALIFORNIA in-person wagering at all tribal facilities and four racetracks was circulated with the intent of getting on the 2020 ballot.

When Covid-19 hit in March of that year, organizers were forced to delay the gathering of signatures, which led to the measure being pushed back to the 2022 General Election.

Mobile sports betting was deliberately left out of the proposition, which was proposed by four tribes: the Barona Band of Mission Indians, the Agua Caliente Band of Cahuilla Indians, the Yocha Dehe Wintun Nation and the Pechanga Band of Luiseño Indians.

Kathy Fairbanks, Partner in the Sacramento, California-based firm Bicker, Castillo & Fairbanks Public Affairs, is a spokesperson for the Coalition for Safe, Responsible Gaming. This group is leading the Yes campaign for what currently is being referred to by proponents as the in-person tribal sports wagering measure, and the No campaign against the online wagering measure.

"THE PARTIES BEHIND THE BALLOT PROPS ARE CALIFORNIA’S FEDERALLY RECOGNIZED TRIBES." Fairbanks told Gaming America the committee has raised more than $16m so far this year, and more than $27m since 2019.

“Tribes have a long history of waging successful and well-funded campaigns to educate voters,” Fairbanks noted. “We look forward to engaging voters about why they should support the already qualified, in-person tribal sports wagering measure and oppose the corporate online gambling proposition. Based on internal polling, we are confident we will prevail.”

According to Fairbanks, a coalition of California Indian tribes, social justice advocates, community groups and small businesses strongly support sports 46 | GAMINGAMERICA

wagering at existing tribal casinos.

“We think it is the most responsible approach to authorizing sports betting in California,” she said. “All bets must be placed in-person by adults 21 and over at a tribal casino, with safeguards in place to prevent underage and illegal gambling.”

CARDROOMS/CITIES OPPOSE THE TRIBAL MEASURE Taxpayers Against Special Interest Monopolies, a group funded by California’s licensed cardrooms, is leading the opposition to the in-person tribal proposition. According to the California Secretary of State, the No campaign received $20.8m in contributions during the fourth quarter of 2021, and currently has $23.5m in cash after expenditures.

A spokesperson who handles media inquiries for the No campaign, who asked not to be named because they are not authorized to speak on record, said the biggest objection is a provision that would authorize a new civil enforcement tool, which would allow any state resident to sue cardroom casinos.

“The worry is this hidden provision could allow tribes to sue cities and/or cardroom casinos. These frivolous lawsuits could harm cities. The other initiatives do not have this provision, so we are neutral on those,” the spokesperson said.

Juan Garza is a spokesperson for a public agency called California Cities for Self-Reliance Joint Powers Authority, which represents five cities that have cardrooms in their communities. He told Gaming America, “this initiative would harm cardroom revenue,” because of the provision to allow lawsuits.

“We definitely see value in sports betting, but allowing anyone to sue cardrooms for what tribal interests consider to be questionable processes could amount to death by a thousand papercuts, if cardrooms have to defend themselves from thousands and thousands of lawsuits,” said Garza, who is a former city council member and mayor of Bellflower, in Los Angeles County. “The tribal nations are trying to circumvent

the attorney general and allow members of the public to initiate lawsuits. If that element was not in the initiative, I am not sure if cardrooms would support it, but they would not oppose it.”

The issue is important, Garza continued, as revenue from cardrooms supports many city services – including police and fire departments, public works projects such as paving and streetlights, and more. He noted cardrooms in Los Angeles County employ 10,000 people directly, plus more jobs at the industries that support the cardrooms, such as food services. Statewide, there are up to 30,000 employees at 80 cardrooms.

“Many of these cities are minority majority, and for some up to 75% of their revenue comes from cardrooms,” Garza said. “The cardrooms are extremely vital, so if they disappear the cities would not have alternate sources of revenue.

The cities are vulnerable, as they do not have Fortune 500 companies knocking on their doors to come in. Any threat to the cardrooms is a threat to our cities.”

According to Garza, the problem between the tribes and the cardrooms stems from a rule California has in place regarding banking of card games. Unlike in Nevada, California cardrooms are not permitted to be the house. Typically, therefore, the responsibility of covering bets rotates through the players. Because many players cannot cover the bets on their table, a law was passed to allow a third-party banker.

“To continue to operate, the cardrooms were allowed to have the third party cover the bets, and the tribal nations have a problem with that,” Garza said. “It has been a long-running dispute.”

Garza expects there will continue to be fundraising to support the No campaign, adding he would not be surprised if it reached $75m to $100m.

“As campaigns get near the election, there will be messaging on TV, radio, social media. We will be letting people know we support sports betting in general, but this provision is a problem,” Garza said.

GAMING AMERICA | CALIFORNIA LITTLE CHANCE OF COMPROMISE Fairbanks of the Coalition for Safe, Responsible Gaming responded to Garza’s arguments by stating, “to be clear, cardroom casinos and their gambling bankers are behind a deceptive campaign attacking California Indian tribes.”

The cardroom casinos, Fairbanks asserted, have a “well-documented history of flouting the law” and have been fined millions of dollars for “violating anti-money laundering laws, misleading regulators and operating illegal gambling.”

Now, she said, the cardroom casinos are “doubling down” on their efforts to attack the tribal-backed, in-person sports wagering ballot measure.

Asked if there is any way for the tribes and the card clubs to come to some sort of compromise, Fairbanks retorted: “They can start by following the law.”

“California law prohibits cardroom casinos from offering Nevada-style games like blackjack. Yet many cardroom casinos regularly ignore the law, and unlawfully offer and promote this type of gambling at their casinos across California,” Fairbanks declared. “Our measure simply strengthens enforcement of existing laws to prevent unlawful gambling in cardroom casinos or any other illegal establishment. The only businesses at risk of legal enforcement are gambling establishments that repeatedly violate California gaming laws.”

ONLINE BETTING PROP WILL RAISE FUNDS TO HELP HOMELESS The “California Solutions To Homelessness & Mental Health Act” is the official name of the proposition backed by DraftKings, FanDuel, BetMGM, WynnBET, Bally’s Interactive, Fanatics Betting & Gaming and Penn National Gaming. It would allow online sports betting anywhere in California – including outside of Indian lands – and says it will raise hundreds of millions of dollars each year for homelessness and mental health services.

Nathan Click, a spokesperson for the initiative, noted it is supported not only by the sportsbook operators, but also the mayors of four of California’s largest 48 | GAMINGAMERICA

cities: Fresno Mayor Jerry Dyer, Long Beach Mayor Robert Garcia, Oakland Mayor Libby Schaaf and Sacramento Mayor Darrell Steinberg.

In addition, three homelessness service providers back the measure: All Home, a statewide homelessness service provider, the Regional Task Force on Homelessness for the San Diego area and The United Way of Greater Los Angeles.

“Homelessness has reached a crisis level in California, but the state does not have a dedicated funding source to solve homelessness; it changes year to year depending on the stock market,” Click began. “Our initiative helps solve that by creating a fund using the tax revenue from online sports betting.”

Revenue generated by wagers would be deposited into what will be known as the California Online Sports Betting Trust Fund (COSBTF). After deducting state regulatory costs, the measure requires 85% of revenue be allocated by the legislature through the annual state budget process, for the purpose of delivering permanent and interim housing.

Proceeds from the fund would be distributed to a variety of providers, Click said, including shelters, permanent housing projects and other ways to get people off the streets.

Click emphasized the online sportsbooks would be operating in partnership with tribes. Further, even tribes that do not participate in the marketplace would

benefit from a percentage of the revenue, he said.

“We need one million total signatures, and we reached 250,000 months ago and notified the state,” Click said. “We are well on our way to qualify and will qualify for this ballot.”

The Coalition for Safe, Responsible Gaming is “strongly opposed” to the online sports gambling proposition, which Fairbanks asserted would authorize a “massive expansion” of online and mobile gambling across the state; this, she said, would result in “essentially turning every cell phone, laptop and tablet into a gambling device.”

“Under this measure, anyone in California could gamble anytime – leading to a massive increase in problem and underage gambling,” Fairbanks declared.

In response, Click said the measure includes “strict” age verification rules “that are working in 21 other states to ensure minors do not place bets.” Enforcement would be under the authority of the California Dept. of Justice.

“Online sports betting has been shown to be safe and responsible,” Click argued.

“Our initiative includes strong protections in line with the states that have already legalized. Californians spend billions of dollars betting on offshore sites that offer no age verification requirements, no consumer protections. Why wouldn’t we want to set up a regulated marketplace?”

Not surprisingly considering the potential size of the California online sports betting marketplace, organizers of the measure have a starting bankroll of $100m to spend on getting it passed.

“Our goal is to ensure California voters understand our initiative,” Click said. “When they are presented side by side, the voters will see the benefit from ours. We are the only initiative that has been assessed by the state’s fiscal analyst to raise hundreds of millions for homelessness and mental health services.”

As Bette Davis famously said in All About Eve, “fasten your seatbelts, it’s going to be a bumpy night” between now and November.

GAMING AMERICA | CALIFORNIA

CALIFORNIA: THE SCORECARD You can’t tell the players without a scorecard... So here is a detailed look at all four potential sports betting ballot propositions in California.

50 | GAMINGAMERICA

CALIFORNIA | GAMING AMERICA California has a long tradition of direct democracy in the form of ballot propositions.

One of the most famous is Proposition 13, a property tax limitation initiative that passed overwhelmingly in 1978 and still is having a significant impact today.

The latest major issue that will be put before the Golden State’s voters is the legalization of sports wagering. According to the California Secretary of State, one initiative measure currently is “eligible” for the November 8 ballot, one that was proposed by four tribes: the Barona Band of Mission Indians, the Agua Caliente Band of Cahuilla Indians, the Yocha Dehe Wintun Nation, and the Pechanga Band of Luiseño Indians. It would authorize only in-person sports betting, and solely on tribal lands and at the state’s four racetracks.

Because it long since has accumulated the required number of signatures, backers of the measure have already received a letter stating this measure will be deemed “qualified” on the 131st day prior to the next Statewide General Election, which this year will take place on June 30.

Three other sports betting initiatives have been proposed and are in various stages of gathering signatures. The one that is most likely to qualify for the ballot would legalize online sports wagering, though still requiring working in cooperation with the state’s tribes. It is backed by a group of seven operators: DraftKings, FanDuel, BetMGM,

WynnBET, Bally’s Interactive, Fanatics Betting & Gaming and Penn National Gaming.

AFTER THOSE TWO, THE WATER IS A BIT MURKIER California’s licensed cardrooms have started a well-funded campaign against the in-person tribal measure, but their own initiative has stalled. The proposition purported to allow licensed gambling establishments, including cardrooms, to conduct additional games that are played with cards or tiles, and to legalize in-person, online and mobile sports wagering for persons 21 years or older.

The cardrooms proposed a 15% tax and other fees on sports wagering revenue, to be directed first to enforcement and problem gambling programs; with any remaining funds going to public education, homelessness, affordable housing and mental health programs.

However, after filing paperwork with the California Attorney General, the cardrooms reportedly never started the paid signature-gathering process, meaning the initiative is extremely unlikely to qualify for the ballot.

The fourth and final potential entrant was proposed by the Rincon Band of Luiseño Indians, the Wilton Rancheria, and the San Manuel Band of Mission Indians. Similar to the first tribal-backed initiative, this proposition would legalize

roulette, dice games and sports wagering on tribal lands. Where it departs is legalizing online sports wagering statewide, if operated by federally recognized Indian tribes.

The latter initiative did not receive its title and summary from the Attorney General until January 11, meaning it is significantly behind on the signature-gathering process.

The Secretary of State recommends campaigns turn in signatures to county registrars on April 26. All signatures then must be verified. June 30 is this year’s deadline for counties to give the count to the Secretary of State.

With nine ballot measures currently circulating, there is a lot of competition to gather signatures, and then the verification process is time consuming and is done on a first-come, first-served basis. All of which means the window is very tight for the second tribal measure to become qualified. It may have to wait until 2024.

As this issue goes to print, legal maneuverings continue. Two licensed cardrooms asked the California Supreme Court to block the tribal-backed, in-person initiative on the grounds it violates the state constitution by having more than one subject associated with it. When the high court refused to grant a hearing, on March 7 the cardrooms filed a lawsuit in Los Angeles Superior Court, making the same allegation.

"AS WITH THE OTHERS, THIS MEASURE WOULD RESULT IN INCREASED STATE REGULATORY COSTS, POTENTIALLY IN THE LOW-TO MID-TENS OF MILLIONS OF DOLLARS ANNUALLY." GAMINGAMERICA | 51

GAMING AMERICA | CALIFORNIA ASSIGNMENT OF NUMBERS WILL START SPRINT TO FINISH On June 30, the Secretary of State will issue a press release naming all propositions that qualified for the ballot. That day, or the next day, depending on the number of propositions that made it across the signature finish line, the office will release the ballot proposition numbers – which all parties agreed will be a huge step, as it will give their prop (and the opposing props) an easily identifiable number.

Kathy Fairbanks, Partner in the Sacramento, California-based firm Bicker, Castillo & Fairbanks Public Affairs, and spokesperson for the Coalition for Safe, Responsible Gaming, which is leading the Yes campaign for the in-person tribal sports wagering measure, told Gaming America what will come next.

“We have been getting ready behind the scenes for months – polling, doing

before Election Day. In it, proponents of each measure are allowed to write an argument for their proposition. This is followed by a rebuttal, written by the opposition to the prop, then an argument against, and a rebuttal to the latter.

The following pages in the handbook contain text that is profoundly influential to many voters, who understand the people who sponsor the measures think they are a good idea and those opposed trash them. Each Statewide Election, the California Legislative Analyst’s Office, a nonpartisan fiscal and policy advisor to the state legislature, gives a detailed analysis of the potential monetary effects on the state from each ballot prop.

Here is an abbreviated look at the highlights of the LAO’s analysis of each of the four measures that might appear on the 2022 ballot: The in-person, tribal-backed initiative

"AS SUCH, ALL PARTIES FOR AND AGAINST THE FOUR PROPOSITIONS HAVE GATHERED HUGE WAR CHESTS TO SPEND ON ADVERTISING. research, forming coalitions, creating a website and more,” Fairbanks said. “Many voters don’t really pay attention until they get their ballots, which will be in October. But we expect the TV and radio ads for all sides probably will start running in September.”

MILLIONS OF DOLLARS IN REVENUE AT STAKE California is the most populous state in the union, and it is home to numerous professional and college teams that have passionate fan bases. So yeah, every operator wants a piece of what is expected to be a huge pie... As such, all parties for and against the four propositions have gathered huge war chests to spend on advertising.

One hallmark of California elections is receiving the phonebook-sized ballot handbook in the mail roughly one month 52 | GAMINGAMERICA

would create a new special fund, the California Sports Wagering Fund (CSWF).

A tribe can choose to make payments into this fund, depending on the specific terms of its tribal state compact; but all tribes that offer sports betting must reimburse the state for actual regulatory costs.

The LAO said this proposition would result in increased state revenue, potentially reaching the tens of millions of dollars annually, from payments made by facilities offering sports wagering and new civil penalties authorized by this measure. Some portion of this revenue would reflect a shift from other existing state and local revenue.

It would bring increased state regulatory costs, potentially reaching the low tens of millions of dollars annually. Some or all of these costs would be offset by the increased revenue or reimbursements to the state.

It would result in increased state

enforcement costs, not likely to exceed several million dollars annually, related to a new civil enforcement tool for enforcing certain gaming laws.

The online sports betting initiative, proposed by DraftKings, FanDuel and other operators, was predicted by the LAO to bring increased state revenue; potentially reaching the mid-hundreds of millions of dollars annually, from online sports wagering-related taxes, licensing fees and penalties. Some portion of this revenue would reflect a shift from other existing state and local revenue.

It also would result in increased state regulatory costs, potentially reaching the mid-tens of millions of dollars annually, that would be fully or partially offset by the increased revenue.

The tribal-backed initiative that would allow both in-person and online sports betting is said to have a potential impact of increased state revenue that could range from the tens of millions of dollars to the mid-hundreds of millions of dollars annually, depending on how the measure is implemented and legally interpreted.

Some portion of this revenue would reflect a shift from other existing state and local revenue.

As with the others, this measure would result in increased state regulatory costs, potentially in the low-to mid-tens of millions of dollars annually. Some or all of these costs would be offset by the increased revenue or reimbursements to the state.

Finally, the proposition backed by the state’s licensed cardrooms that would allow both in-person and online sports betting was estimated by the LAO to result in increased state revenue, potentially reaching the mid-hundreds of millions of dollars annually, from sports wagering taxes and payments (such as licensing fees). Some portion of this revenue would reflect a shift from other existing state and local revenue.

It would bring increased state regulatory costs, potentially reaching the high tens of millions of dollars annually, that would be fully or partially offset by the increased revenue or payments required by gaming agreements between tribes and the state.

GAMING AMERICA | KAMBI

THE COMMERCIAL PERSPECTIVE What is the best way for a tribe to integrate with the fast-evolving commercial market? Gaming America sat down with David Bretnitz, Kambi’s Senior Director of Sales in the US, to get his views.

How are tribal operators responding to the ever-growing influence of commercial operators across the country?

Tribal gaming has been an integral part of the wider US casino landscape since the Indian Gaming Regulatory Act was passed in 1988, with revenue growing year-on-year for the last decade and now accounting for approximately 45% of all gaming takings. Even with the pandemic, collective gross gaming revenue from tribes was still $27.8bn in 2020, which shows that the tribal gaming market remains robust. Since the repeal of PASPA in 2018, sports betting has exploded across the US and tribal operators across the country have been assessing the best way to introduce this new vertical to the benefit of their community.

With that in mind, what opportunities can commercial brands present to longstanding tribal operators?

Tribes effectively have two options when it comes to launching a sports betting operation: they can either partner with a B2B supplier or they can work with an established B2C sports betting brand. Selecting the right route to market is crucial, but it’s important to stress that neither option is right or wrong. For some

54 | GAMINGAMERICA

tribal operators, partnering with a B2C company with national brand recognition could be the most effective strategy as they can then leave the day-to-day management of the sportsbook to their partner and have a shared database.

However, this does mean tribes lose out on potential cross-sell opportunities at their casino. As well, they have to pay a far larger revenue share compared to B2B. Having said that, introducing a new product vertical on property isn’t a light undertaking. By working with an established B2C brand, tribal gaming operators are in a position to benefit from the experienced sportsbook marketing and operational expertise of the operator.

"SELECTING THE RIGHT ROUTE TO MARKET IS CRUCIAL, BUT IT'S IMPORTANT TO STRESS NEITHER IS RIGHT OR WRONG." Conversely, how do you think tribal operators can compete with these commercial giants?

At Kambi, we believe the strength of the sportsbook product itself will ultimately be the determining factor for success in the US market, including tribes. However,

operating a high-performance sportsbook is a huge challenge on a structural and technical level, and few operators are in a position to build their own technology and platform. We understand the value tribes place in long-term thinking and trusted partnerships. By working with an end-to-end B2B sportsbook partner, tribes can most effectively compete with these commercial giants.

Partnering with a specialist B2B sportsbook is an attractive option for those tribal operators that have confidence in the strength of their brand and want to maintain full control of their customer database. Tribal operators including Seneca Gaming Corporation, Four Winds Casinos and Desert Diamond Casinos have launched sportsbooks in partnership with Kambi.

How will the new legalization of sports betting in New York affect the state’s tribal operators?

Since going live in early January, New York State has become the biggest online sports betting market in the country, and there are some eye-watering figures being initially reported. However, much of this growth is being driven by extremely generous bonuses and sign-up offers.

This includes what impact it will have on tribal operators in the state. However, Kambi believes the operators most likely to succeed in the long term will be those that have a high-performance sportsbook product.

MOHAWK | GAMING AMERICA

THE INDIGENOUS PERSPECTIVE We spoke with Chief Mike Delisle of the Mohawk Council of Kahnawà:ke, to discuss the current state of Indigenous gaming in Canada, specifically examining the soon-to-launch iGaming and single-event sports betting markets in Ontario.

How are Indigenous operators responding to the ever-growing influence of commercial operators across the country?

To be honest, there aren’t a lot of Indigenous operators in Canada presently.

The Kahnawà:ke started as a regulatory body, the Kahnawà:ke Gaming Commission, 21 years ago now and only in the last six to seven years have we become an operator through a partnership with Sports Interaction.

I’ll put it this way, normally Indigenous people aren’t trusting of government,

"WE ARE NOT PIRATES, WE WANT TO BE RESPECTED AS INDIGENOUS OPERATORS." and sometimes each other, and it can be difficult to put forward a uniform position in terms of how we are impacted. Overall, in 1985 when the Federal Government amended the Constitution, basically eliminating Indigenous communities from being involved in the gaming business and delegating it to the provinces, this is the major concern for us today moving

forward. There have been attempts in the past for us to engage with the Minister of Justice, who sent a letter to everyone in Indigenous territories in June of last year, asking for dialogue about the reopening of the 1985 agreement. We said we would absolutely like this and have since received no response. It is frustrating.

With that in mind, can commercial brands present opportunities for Indigenous operators? For example, your partnership with Entain?

In regards to Entain, we would like them to become our big brother in the province of Ontario where they will be applying for a license. They know full well that our platform, Mohawk Online, will not be succumbing to Canada’s recent legislation nor will we pay taxes. For us, it’s very different in how we approach things and we have asked the Ministry of Finance for a fair shake. We want a carveout, a way forward or recognition of our regulatory body. This is the angle we are taking and we are building a consensus of other Indigenous communities in Ontario.

We are spearheading this and many others are looking for change.

Conversely, how do you think Indigenous operators can compete with these commercial giants?

We know that these relationships can be an advantage. There are obviously negatives when large corporate bodies

move in, but we view our partnership with Entain as a positive in terms of them understanding our current fight, engaging with us to be able to have Ontario and other provinces understand. Ultimately, I think Ontario is the tip of the iceberg; once Ontario launches, other provinces will follow. It’s a money grab. But again, we view Entain as a positive partner, we meet with them often and they are on board with our vision.

How will the new legalization of single-event sports betting in Ontario affect the provinces Indigenous operators?

It will shut us down. Mohawk online will not be able to operate according to the new regulations in Ontario and if we acquiesce to everything they put in place, the taxation and the new rules, it will not allow us to engage with players or to advertise in our markets. However, we have good relationships with a number of larger bodies in Canada and they are beginning to understand this problem.

We are still looking to talk with the Ontario Government to see if we can engage and take action, take the steps to ensure that Indigenous space is respected. We have been involved in gaming for over 20 years and we have never been challenged, federally, provincially or internationally.

We are not pirates, we want to be respected as Indigenous operators and continue to generate revenue for our people.

GAMINGAMERICA | 55

GAMING AMERICA | EVOLUTION

FIRST OFF THE BLOCK Jeff Millar, Commerical Director North America, Evolution, speaks to Gaming America about the industry giant’s plans for 2022.

What are Evolution’s goals for 2022 in US and Canada?

Back in 2021, we already launched our live casino offering and our slots portfolio in several states, including: New Jersey, Pennsylvania, Michigan, and when it comes to slots we also launched in Connecticut and West Virginia. This year, our plan going forward is simple. We want to be the first provider in every state as each state opens. That’s the baseline. We want fully operational live casino studios wherever they’re needed. We’ve always prided ourselves on offering state-of-the-art, live casino studios; and our experience working over in Europe has provided us an amazing foundation from which to supply unmatched players experiences here in North America, without ever sacrificing game integrity or trust.

How is early progress going in Evolution’s recently opened Michigan studio?

We are very excited about the expansion that is occurring in our Michigan studio.

Before the summer, we expect to have received regulatory approval for the launch of new game types including Lightning Roulette and Craps. We also have four well-known Michigan operators that will launch brand new dedicated environments. These new areas in our studio will contain tables that match the branding of the operator. We’re especially excited to introduce these new operator-branded games.

Are there any further plans to open new studios and launch new products in North America?

Whether it’s games in our live studio or our innovative slots, our product offering for North America will continue to expand 56 | GAMINGAMERICA

JEFF MILLAR Evolution Commercial Director, North America in 2022. Our aim is to offer our full suite of games to our partners and their players, so that they can have access to our high-performing slots and our classic live studio games; such as Live Roulette, which are always going to be player favorites.

And we have new games that have proven to be successful out in Europe that are now coming right over here to North America.

The real question for this year is: how do you make yourself unique in such a competitive environment? The answer: dedicated live casino tables and larger multi-table dedicated environments. With dedicated tables, operators can customize the whole look and feel – big brands have already experienced great benefits from this and we’re also seeing real success with the option to brand dedicated first-person games. It gives operators full control over branding and the ability to run their own live promotions. The choice is entirely theirs.

On the slots side, it’s finally time. Time for Red Tiger jackpot games to hit North

American shores. What’s so great about them? They’re entirely configurable by the operators and can be pooled across multiple Red Tiger games – whether daily, hourly or both. We know this new and innovative progressive jackpot format will be loved by players, as they chase these winnings while the clock ticks down.

As you know, we acquired a fair few companies last year and one of these was Big Time Gaming (BTG). They’re known for their innovative approach to game design and one of the things North America can look forward to is the fact BTG will be finishing development on some incredible new titles. These are going to be released exclusively by Evolution later this year – so you’re going to want to stay tuned for more updates.

Now that mobile sports betting in live in New York, and Ontario iGaming is expected to launch imminently, where else is Evolution excited about in 2022?

We are excited to see a new bill introduced in New York to legalize online casino. The bill was just introduced last week and includes a tax rate of 25%, which is much more reasonable than the 51% tax rate for mobile sports betting. If the bill passes, this could be the largest opportunity in the US for online casino yet. Other states we are keeping a close watch on include Iowa, Illinois and Maryland among others.

"IT'S FINALLY TIME FOR RED TIGER JACKPOT GAMES TO HIT NORTH AMERICAN SHORES"

GAMING AMERICA | GAMBIT REWARDS

HIGH-OCTANE LOYALTY We spoke with Richard Pistilli, Founder and CEO of Gambit Rewards, following its acquisition by Snipp Interactive, to discuss the company’s creative take on loyalty rewards and how this approach can impact the gaming industry.

Firstly, would you be able to tell our readers about your personal and career history?

I am the Founder and CEO of Gambit Rewards; I have over 20 years of capital markets experience, spending over a decade as an investment banker in New York before launching several fintech start-up ventures. When I was an investment banker I covered a number of different industries and, as you can imagine, one of these was the loyalty sector: the loyalty and rewards space.

This is where my background lies when it comes to building Gambit Rewards.

Gambit Rewards was started back in 2018, and the opportunity my partners 58 | GAMINGAMERICA

and I saw was to create a convergence between two market trends; one of which was online sports betting and gaming in America, and the other being the loyalty space. We were thinking about these two big bubbles. In the loyalty space, the industry has grown to the point where it’s effectively ubiquitous. You as a consumer have essentially grown to the point where you have come to expect loyalty features in every corner of your consumer experience. The challenge is that the experience itself has become pretty standardized. You offer the consumer free flights, free nights or gift cards, right?

Anywhere you go you get the same thing.

So, we looked at this huge industry,

with $100bn worth of loyalty points outstanding in the United States alone and asked how we differentiate; because the industry is in need of innovation.

On the other side, you look at the gaming sector, which for so long in the US has been prohibited and restricted but is now opening up. We said there is this huge audience, which is currently sitting on a huge amount of assets separate from their cash (their loyalty/rewards points) that they could be doing something with. And then there is this gaming experience: fast forward to 2022 online sports betting has completely transformed. It's mainstream, going from legalization to state adoption, to major media companies diving in and

GAMBIT REWARDS | GAMING AMERICA sports teams fully embracing it today, with the stigma being completely gone.

Sports betting is now part of consumer experience and we think that’s great.

Online sports betting companies are all going after a part of the consumer experience and trying to get a piece of that cash wallet. Meanwhile, we are going after something completely different; we are going after a share of their loyalty wallet, which is untapped, so we sit between these two industries, allowing us to package the thrills and the winnings of online sports betting without too many hurdles. By this, I mean there are the social gaming platforms, where you can play games but you don’t win real cash prizes; then there is the free-to-play model that has been adopted in the US, which does not provide the true core experience of single-event betting.

What we landed on was a proprietary model, powered by the loyalty points, where a consumer can say ‘if you guys can give me a free Starbucks gift card, why can’t I have a free play?’ And that is were we step in, connecting those dots and allowing people to play with their loyalty points and win cash and other benefits. That is the essence of the model; you can win, and if you lose, all you have lost is your points.

you could double them. In essence, you are preserving the experience of betting but eliminating the negative and the cash risk. That’s what we mean by making them fun again. One of the ways we see people use them is: when we launched our pilot program, we put our product next to some of the industry’s biggest names. We then saw users were happy to use our service in an attempt to up their balance.

You have mentioned players can play for crypto... what technologies do you think we will see lead to innovation in the loyalty sector?

If you think about our model, and you take a partner like Snipp Interactive, who have partnerships and access in all corners of the loyalty industry, they are already dealing with all different types of prizes, crypto, cash etc. Through this acquisition, we become an engine that plugs right into that; and so we can go from a simple platform that offers a limited number of prize options to an unlimited number. Now in terms of crypto, from my perspective, I view it as another good option for our players to redeem their winnings.

How will the takeover affect Gambit?

"IT’S GIVING US HIGH-OCTANE FUEL INTO OUR ENGINE." You have said in the past that the goal of the company is to make loyalty points fun again; what do you mean by that?

If the experience for loyalty points has been homogenized, we are injecting the gamification of loyalty points: stake them on tonight’s game and if you win

It’s taking a business that has grown organically over several years, locking down legal questions and regulatory concerns, and making sure we have a service that can operate nationwide.

We have had success in this, running our pilot program next to household names like Mastercard, and within five months we shot to the top. Then you bring in Snipp. If we work on our own we have to make partnerships with all these companies on our own; with Snipp, they are already working with these Fortune 500 companies. Number one, it elevates our adoption curve. It massively enhances our technology as well; they know how to optimize user engagement and connectivity, that is another big piece. The third is the overlap; they have not really done much on the gaming

RICHARD PISTILLI Gambit Rewards Founder and CEO

side, so while we are bringing them an interesting product, it’s a good opportunity to bring what they do to the gaming sector. It’s a huge industry.

So is that what’s next? Making Gambit a household name?

Yes exactly and there are a couple ways we can do that. Firstly, what we are doing is unique. If you think about the gaming sector and what a lot of these big brands are doing, we are doing something similar but in no way competitive, because we aren’t competing for the cash dollar; we are doing something else. And so, in this aspect we can work with a lot of large operators, as we really are not competing with them. So in that sense we see an opportunity for us to partner with some of the biggest gaming companies, and that’s a way we can elevate our brand as well.

Overall, in regards to the gaming aspect, we love that experience. We are providing it, but it’s almost as if we are taking a really soft approach to it. You can play, you can win; but it’s not really costing you anything, it is the points and we think that’s a really interesting value proposition. We think it will go a long way to connecting with casual players.

GAMINGAMERICA | 59

GAMING AMERICA | ASPIRE GLOBAL

TRIBAL ASPIRATIONS Gaming America sat down with Quincy Raven, Managing Director US at Aspire Global, to discuss tribal gaming.

Firstly, would you be able to go into some detail regarding Aspire Global’s approach to the ever-expanding gaming market in the United States?

The US market is enormous in scale. This can be seen by the level of advertising spend and huge bonus offers being put in front of customers by tier-one operators such as DraftKings and FanDuel. Our focus is on the segment of the market not controlled by the major market access players, which represents approximately 30% of gross gaming revenue in the US. One distinct advantage we have over the competition when vying for this share is our legacy as a B2C operator and our experience in providing operational managed services to many of our platform partners.

With our CRM suite, AspireEngage, we’re able to offer player engagement and retention services above anything else available in the US market. While many of the established land-based partners we are talking to cannot – and would not want to – match the marketing spend of the major operators when establishing a digital presence, it is crucial they focus on player retention in order to utilize the hard-won players they have built up over decades.

Tribal gaming is, of course, a massive part of the US; how are you planning on approaching the tribal segment?

Does it take a different approach when compared to European and non-tribal US brands?

Without a doubt, opportunities within the vast tribal segment are plentiful and this is a key focus for Aspire Global. We have seen within financial reports issued by tier-one operators that they are burning hundreds of millions of dollars on virtually unlimited marketing budgets to acquire 62 | GAMINGAMERICA

QUINCY RAVEN Aspire Global Managing Director US

players. This approach is not sustainable for tribal operators and their focus, given their already-large player databases, must be trained on CRM execution with an eye on efficiency. One way of achieving this is by making sure they have all the necessary CRM components integrated within a single platform, instead of buying a particular iGaming or aggregation platform with a bolt-on CRM component; which could entail employing additional technology and marketing vendors.

How can tribal operators compete with the commercial giants that are growing in the US, or should they be looking to work in tandem with them?

There is enough space in the US market for every level of operator to find their niche successfully. For tribal operators, it is a case of taking a suitable approach, given their existing experience gained over decades, in creating and growing a loyal player base with

the entertainment options they seek.

A perfect example of a state in which tribal operators are occupying the same space as big guns, with deep pockets and substantial media-buying power, is Michigan.

Tribal operators might look at the swathes of TV ads and ask: how am I going to afford to keep up with that? But I believe the first questions asked should be, what am I doing for my existing players? A big marketing spend is great, but there is huge value in instead considering whether the VIPs an operator has spent so long looking after are still playing in expected ways; and if not, producing marketing and incentives around that. It sometimes pays to steer clear of the noise.

With that in mind, do you have some insight on how the tribal operators you work with feel about the growth of non-tribal gaming brands in the US? If you take a broader view of sports betting and online casino in the United States, its growth can be beneficial for every operator. Evaluating the cost per acquisition, which is as high as $1,000 in some cases, gives an idea of the overall market’s potential in the long term.

The rollout of sports betting is educating bettors about new and exciting products, which operators can use to add new forms of online entertainment and engagement. Tribal operators can tap into the evolving ecosystem to provide players, new and old, with an innovative gaming option. We are involved in talks with several tribal operators about how we can help them maximize their potential in the online gaming and sports betting space in North America; at a very exciting juncture in the growth journey of the industry as a whole.

THE SCORE | GAMING AMERICA

KICK-OFF IN CANADA We spoke with Aubrey Levy, Senior VP of Content & Marketing at theScore, to discuss the upcoming launch of sports betting in Ontario.

With the launch of iGaming coming to Ontario in April, can you explain theScore’s approach to the launch?

Do you think Canada will see a similar explosion in iGaming and sports betting as what we have seen in the US?

Ontario is our backyard and this launch is special for us. We have a brand recognition and a user base here that is huge when compared to our operations south of the border. So as we think about Ontario, it is obviously hugely exciting.

Our strategy is going to be to take all the things we have learnt during three years of operations in the US, both from a product and integration perspective and from a performance marketing perspective, and then layer in some additional marketing tactics that we don’t really implement in the US. We will be making a much more concerted and aggressive push in Ontario. TheScore will use brand work and partnerships such as the ones we have with Golf Canada and Canlan. Overall, it is going to combine all of our learning from south of the border, supported by a robust multichannel marketing and partnership program.

Ontario is an interesting market; from a size perspective it’s the equivalent of the fifth-largest state in the US. And in a lot of ways it is going to be the most commercially friendly. With that being said, Ontario is also taking the perspective to put more responsible gaming parameters on the type of marketing you can do there. This is a direct attempt to try and prevent some of the marketing that has been happening in the US, where you just get huge sign-up offers all the time. What you will see is that the province will be very competitive but will lend itself to operators who have differentiated offerings. It will be very different to the US market for sure.

You are going to be one of the first operators to launch in the region; can you give our readers an overview of what the process to gaining regulatory approval was like?

We have followed this process throughout and have been long-time proponents of the legalization of sports betting and iGaming. Once the market was green-lit, we worked closely with the Alcohol and Gaming Commission of Ontario (AGCO) to prepare. The whole process has been a very collaborative one, especially with the AGCO, who have been great to work with.

Now, we are in the home stretch and are looking forward to finally opening the doors on day one.

One of the interesting things about theScore is your transition from media into the sports betting space; how did that process occur?

This ties into the idea of a differentiated approach. TheScore is a sports media company first and foremost. For us, betting does not happen in isolation; it is a component of the sports media experience. It is no different from going to the bar or going to games. So when this opportunity came about, we chose to offer the wagering product ourselves by becoming the operator. This thesis drove us down a path that meant we had to operate and led us to build our own technology stack. Hopefully, this will allow us to enter Ontario with a different experience, one that the users on our media app enjoy, and allows for a seamless and easy betting experience.

AUBREY LEVY theScore Senior VP Marketing and Content

Finally, what is your take on the many betting brands trying to move into the media space?

I think it is no small task to build a loyal media footprint. On the surface of it you think you can write some articles and offer media feeds; but if you look at the leaders in the sports media space, it is not just something you can buy your way into. Large spending on marketing does not guarantee success. Everybody in the sports betting business wants to move closer to the sports media industry because they understand the value of media. Media is so closely tied to how people want to bet. You can’t treat media as an add on; it is a beast.

Of course, it’s not impossible for operators to do it well but if you build it just to supplement a sportsbook, you might acquire some users but you may never get to the place where you’re scratching that media itch.

GAMINGAMERICA | 63

GAMING AMERICA | PRODUCT REVIEWS

WHAT'S NEW Gaming America takes a look at some of the market's newest and most exciting gaming products, available for both online and land-based players across the country.

VIP PREFERRED & VIP MOBILITY VIP Preferred is Global Payments’ e-check and ACH network, and serves as the engine that brings the company’s product suite to life. VIP Preferred provides several benefits to patrons including hassle-free cash access, higher limits and lower fees. After a one-time enrollment, VIP Preferred members have access to more 64 | GAMINGAMERICA

than 400 North American, land-based, mobile and online gaming locations.

Patrons can transfer balances from one operator to the next using a single account. VIP Preferred is made up of multiple platforms that add to the gaming experience.

Global Payments’ VIP Mobility is a mobile solution enabling true cashless

gaming. By harnessing the flexibility and ease of Global Payments’ groundbreaking VIP Preferred account network, plus functions like eCheck and Choice 4 deferred settlement, patrons can directly transfer funds from their VIP Preferred balance to their favorite online game or casino game with the touch of a screen. VIP Mobility’s intuitive user interface takes the legwork out of the funding process, ensuring that playing is never interrupted.

VIP Mobility is a solution providing convenient self-service TITO tickets, bill-breaking, e-check, ATM and cash advance capabilities to casino guests who prefer to use cash. The solution equips casino operators with robust service capability, high dependability, easy serviceability and enhanced security. This enables casinos to achieve maximum value for the floor space occupied by their kiosk solution.

Delivering a single source for self-service ticket redemption, cash access and cashless gaming capabilities, Global Payments’ solutions provide patrons with safe, secure and trusted cash access at the cage, on the casino floor and online.

PRODUCT REVIEWS | GAMING AMERICA FOUNDATION Acres knows how important it is for casinos to access their data and makes it its goal to make gaming technology work for them, and their customers. That’s why the company developed Foundation, allowing casinos to access real-time data from every slot machine to a transaction engine that can interface with any other data source; allowing a new dynamic between real-world and in-game events. Casinos can optimize the gaming experience by changing the credit meter balance on any game, for any reason, at any time.

Foundation offers more than 1,000 times more data reporting power than any management system and installs in just two minutes per game, without disrupting existing technology. Casinos can leverage

the power of data to target bonuses to specific players or floor-wide, send rewards in the midst of a losing streak to ensure long-term brand loyalty, and send in-game promotions or add-ons to any display, mobile device or sound system.

Foundation eliminates the middle man and allows operators to decide Foundation which apps use their data, what they do with that data, how to increase or decrease their credit meter and more. It enables casinos to evolve with the times and keep up with current innovations. By embracing the tools that Foundation provides, casinos can dramatically increase their revenues and create a whole new

generation of people excited to play their games. With Foundation, and the innovation it enables, casinos are able to adopt newer technologies and increase revenues by bringing in a new, and younger, generation of dedicated players.

CURLX Gaming hardware and software manufacturer Velvix has announced the launch of its cabinet product, “CurlX”, into the North American market. The cabinet is part of a series of three individual cabinet products, offering some of the latest in design aesthetics and usability.

Launching in Q3 2022, Velvix’s “CurlX” product will offer a top-line experience for players. The cabinet includes a 43-inch C-curve screen that will project in 4K resolution, including touchscreen functionality on the main screen.

The button deck is almost completely virtual, apart from a single press button.

All digital buttons offer fully configurable bet configurations. Adjacent to the virtual button deck is a wireless charging unit for players to rest their devices on for an automatic charge. The cabinet’s topper screen is a 27-inch full HD display offering eye-catching visuals. The “CurlX” cabinet product will be available to North American casino operators from June 2022. It will be marketed alongside Velvix’s “Climax” and “Twimax” products, each offering portrait and landscape gaming experiences, respectively. A number of games will be available on this stylish cabinet, including BaoBao King and Gazillion Zone.

CurlX

GAMINGAMERICA | 65

GAMING AMERICA | PRODUCT REVIEWS PINWHEEL PRIZES

Pinwheel Prizes

REPULS With over 25 years in the gaming industry, Table Trac Inc continues to lead the way in bringing innovative solutions to casinos worldwide. Its security solutions Repuls, SentriLaunch and SentriZone offer casino security and surveillance officers the ability to take a hands-off approach; minimizing risk without compromising the safety of the casino. With the combination of Repuls, SentriLaunch and SentriZone, casino security and surveillance officers can effortlessly fill the gap of time from when an active threat takes control of your building, to when law enforcement arrives while reducing the risk for the casino and staff. Repuls is a water-based handheld spray that allows security officers to approach and detain individuals 66 | GAMINGAMERICA

Incredible Technologies introduces two new slot products for its latest Prism VXP cabinet, the Pinwheel Prizes Majestic Oasis and the Pinwheel Prizes Cat & Tiger.

Pinwheel Cat and Tiger utilizes a three game-integrated display for a combination of great visuals and exciting gameplay the 55” display of the Prism VXP. With five Pinwheels spinning overhead, players can win free spins and increased credits.

The awarded 8 Spins take place on 40 additional Lines – made possible by expanding the main reels via the rising

without significant impact or irritation to themselves. Repuls will virtually immobilize the active threat until in-house responders intervene or law enforcement arrives.

Security officers can deploy spray without contaminating clothes, indoor spaces, or game machines. Repuls has none of the adverse effects of pepper sprays. No residual effects. No smell. Almost immediate recovery with eight ounces of water; tested and purchased by law enforcement departments throughout the world. Repuls has been bought by Mystic Lake Casino and The Sands Las Vegas. This product works to complement Table Trac's casino management system that is live across a number of properties in the US. Recently, the company launched its CMS in the StageCoach Hotel and Casino in Nevada.

VXP screen. Pinwheel spins can also be awarded throughout Free Spins, awarding extra credits and the possibility to retrigger additional spins, creating a thrilling, multi-feature event. Meanwhile, Majestic Oasis offers similar features but has the aesthetics of an opulent Egyptian desert bringing windswept reels of 40 lines to the 27” 4K main display.

In this product, free spins are triggered by three Pyramid scatters or by landing on a Gold wedge during a Pinwheel spin.

The VXP display jumps into action to make room for an additional reelset on top of the 40 line reels. Overall, these two offerings provide a unique and exciting slot experience for players everywhere. First founded in 1985, Incredible Technologies is based in the United States. The company is led by industry veterans such Elaine Hodgson, CEO, and Dan Schrementi, President of Gaming. Over the past two years, the company has made a number of important developments, including the launch of its Electronic Table Games offering and the appointment of Jim Esposito as Senior Director of Sales, North America.

Repuls