Seeing the light How more states are realizing the value of legal sports betting
• BACK ON TRACK: INDIAN GAMING TRADESHOW RETURNS
• ROUNDTABLE: NECESSITY DICTATES A LAND-BASED MOVE TO IGAMING
• COMMENT: COUNTDOWN TO 100% LAS VEGAS 1 GAMINGAMERICA
• FUTUREPROOF: RAMPING UP KYC AND BRAND LOYALTY TO SECURE SUCCESS
COO, EDITOR IN CHIEF Julian Perry
EDITOR Carl Friedmann Carl.Friedmann@gamblinginsider.com Tel: +44 (0) 207 739 9908 SENIOR STAFF WRITER Tim Poole Tim.Poole@gamblinginsider.com STAFF WRITERS Ezra Amacher Ezra.Amacher@gamingamerica.com Peter Lynch Peter.Lynch@gamblinginsider.com LEAD DESIGNER Brendan Morrell DESIGNER Olesya Adamska, Laura Fogar DESIGN ASSISTANTS Radostina Mihaylova, Aleksandra Cakikj, Inna Shtereva, Simona Nikolova MARKETING & EVENTS MANAGER Mariya Savova FINANCE & ADMINISTRATION ASSISTANT Dalia Ambrazaite 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 US ACCOUNT MANAGER Erica Clark Erica.Clark@playerspublishing.com Tel: +1 702 430 1912 BUSINESS DEVELOPMENT MANAGER Warren Wilkinson email@example.com +44 (0) 207 613 5863 ACCOUNT MANAGERS Michael Juqula Michael.Juqula@gamblinginsider.com Tel: +44 (0)20 3487 0498 William Aderele William.Aderele@gamblinginsider.com Tel: +44 (0)20 7739 2062 Clive Waite Clive.Waite@gamblinginsider.com Tel: +44 (0)20 7729 0643 Martin Dilleigh Martin.Dilleigh@gamblinginsider.com Tel: +44 (0) 203 435 5628 SENIOR ACCOUNT EXECUTIVE Sam Ford Samuel.Ford@GamblingInsider.com Tel: +44 (0) 207 739 9918 CREDIT MANAGER Rachel Voit WITH THANKS TO: Andrea Rossi, Sarah Robertson, Richard McGuire, Ed Peace, Jeffrey Silver, Oliver Lovat, Joseph Addabbo Jr., Bill Pascrell, III, Matt Reback, Todd Cravens, Adam Rosenberg, Chris Boni, Thomas Zitt, Elena Kvakova, Chris Kape, Scott Burton, Stephen Crystal, Linda Ellis
JULIAN PERRY, COO, Editor in Chief
CARL FRIEDMANN, Editor
Our capacity for survival, both in the business sense and for life in general, has been tested beyond our most perverse imaginations over the last year. But we’re finally seeing some semblance of ordinary life returning. Whether it’s meeting up with colleagues or a friend, knocking over a few pins at the local bowling alley or rolling the dice at a casino, we’re all starting to crawl from out of the wilderness. It’s too early to process the enormity of everything that’s happened over the last year or so, and there’s not enough radius to get any hindsight clarity, but with Nevada about to go 100% capacity again, there’s reason to celebrate and keep the momentum going forward. Ezra Amacher, our man on the ground in Las Vegas, examines Governor Steve Sisolak’s decision and calls it a “no-brainer” since a steady drumbeat of pressure has been amplifying for a couple of months. In mid-March, Las Vegas saw thousands of out-of-state visitors descend on casinos for the NCAA Tournament and St. Patrick’s Day. “Each successive spring weekend has generated sprawling crowds on the Strip and Downtown, and operators are surely thrilled to raise hotel room rates to match demand,” says Amacher. And that kind of enthusiasm is something they’d certainly want to maintain. Another reason to celebrate is that conventions and trade shows are starting to return, like the Indian Gaming Tradeshow and Convention being held at the Caesars Forum from July 19-22. The show, a reunion of sorts, will run concurrently with NCAIED’s Reservation Economic Summit (RES). “We are excited to announce this partnership, as well as our new dates and location,” commented Ernie Stevens, Jr., chairman of NIGA. “It’s more important than ever for Indian Country to unite at the Indian Gaming Tradeshow & Convention and RES as we continue the rebuilding of tribal businesses following the Covid-19 pandemic.” Usually people like to avoid the peak of the summer in Las Vegas, but the occasion to meet people en masse again, both indoors and out, won’t be lost on anyone. Hope to see you there!
CONTRIBUTING 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.
JOSEPH ADDABBO, Jr.
New York State Senator
Communications director, Pennsylvania Gaming Control Board
CHECK GAMINGAMERICA.COM FOR THE BEST IN BREAKING NEWS
FROM THE TOP
Looking at the change in gaming mergers as companies like DraftKings and Bally’s aim to offer an ever-broadening scope of products.
With the country in a period of self reflection and change, Jeffrey Silver at Dickinson Wright, explores a more socialist gaming industry.
With comment from NIGA and the NCAID, we look into the return of the Indian Gaming Tradeshow and Convention along with RES.
THE NAME OF THE GAME
TRUE TO FORM
ALL THE INGREDIENTS
26 30 34 38
It's three years since PASPA was overturned. Ezra Amacher speaks with state officials about what they’ve learned and why American sports betting has only scratched the surface.
GAINING THE EDGE
PICKING UP THE PACE
GAMING IN THE POST-COVID ERA
SPORTS DATA 101
STATE OF MIND
BY THE NUMBERS
LIVE AND DIRECT
A FOOTNOTE NO LONGER
A DASH TO THE FINISH
Kambi's Sarah Robertson explains the essentials in order to grow and stay relevant.
Betsson Group’s Andrea Rossi discusses Latin America’s rapid growth, outlining key factors across the region’s many markets.
The recent decision to move casinos to 100% capacity by June 1 makes Las Vegas poised for a stellar summer season.
ROUNDTABLE With expert opinion from across the gaming spectrum, we discuss the necessary migration to igaming amid land-based closures.
THE RIGHT CONNECTION Sportech CEO Richard McGuire on 2020, and the critical role the company must play to shape the Connecticut online gaming market.
FOOD FOR THOUGHT Oliver Lovat of the Denstone Group consultancy mixes unmet expectations and misplaced trust to cook up a cautionary tale for Las Vegas.
SKY'S THE LIMIT Bill Pascrell, III, catches up with Gaming America on the current regulatory landscape in the US and why M&A will be key moving forward.
Ed Peace, MD of Sporting Solutions, a supplier of sportsbook solutions, gives his take on what a stand-out tech offering truly looks like.
CGA CEO Paul Burns provides an update on the legalization of single-event sports wagering in Canada, including witness testimony from key industry figures.
Thomas Zitt, EVP, The Innovation Group, examines if the Roaring 20s are really around the corner.
Stephen Crystal, founder of SCCG Management, on driving data and opportunity in the US sports betting sector.
New York Senator Joseph Addabbo, Jr. on his state’s integral role to help carry the torch for online sports betting.
Tim Poole reviews Elys Game Technology’s financial performance for 2020, as the sports betting organization targets North America.
Chris Kape, JAMCO Capital founder and CEO, discusses the hot topics of in-play sports betting and micro-markets in the US.
Elena Kvakova, head of US market at hosting service Internet Vikings, speaks about the need to adopt a strategy that aligns with a state-by-state approach.
FansUnite Entertainment CEO Scott Burton on why promises of a big esports betting future are not just unjustified hype.
Examining Linda Ellis' fast-paced non-fiction work Joe’s Dash, a story of Joe Dorsey, a detective turned casino security director.
PRODUCT REVIEWS A look at the most recent and captivating products on the market.
FROM THE TOP
FROM THE TOP:
DIVERSIFYING M&A Tim Poole looks at how gaming mergers are changing in the US, as companies like DraftKings and Bally’s aim to offer an ever-broadening scope of products. There was a time when operators would buy their fellow operators, suppliers would acquire their fellow suppliers, and that would be that. Today, companies still do that en masse; why wouldn’t they when the market is ripe for M&A? But it’s fair to assess that gaming mergers are changing. Including DraftKings and Bally’s Corporation, recent examples have seen gaming operators branch out by buying suppliers, 8 GAMINGAMERICA
affiliates and marketing firms. Companies now are looking to offer the whole package – and we’re seeing a diversification of our industry’s M&A.
DRAFTKINGS’ DIFFERENTIATION A pioneering gaming firm in this sense, DraftKings has led the way of late in this sector – and that’s nothing to do with
FROM THE TOP
leading revenue positions across legal sports betting markets. Even when it went public in April 2020, DraftKings was one of the first high-profile gaming firms to merge with a SPAC (Special Purpose Acquisition Corporation), making this type of deal far more mainstream within our industry, even if SPACs have been around for years beforehand. It also purchased supplier SBTech at the same time, to ensure it was able to own and deliver its own technology stack, rather than rely on a third-party supplier as it previously did with Kambi. More recently, DraftKings has added two new companies to its armoury, both very different from an operator swallowing up a direct competitor. First, DraftKings acquired VSiN (Vegas Sports Information Network), a multi-platform B2C broadcast and content firm, which delivers sports betting news, analysis and data to sports bettors. “VSiN creates authentic and credible content that resonates with sports bettors at every level, whether they’re experienced or new to sports wagering,” Jason Robins, DraftKings’ CEO and chairman, explained in the official press release. “In addition to its brand equity among sports bettors and engaging talent roster, VSiN also has an established infrastructure that DraftKings can immediately help expand, in the hopes of adding value to consumers who are looking to become more knowledgeable about sports betting.” The benefits of adding a content brand like VSiN make complete sense with hindsight. And yet it needed an innovative approach in the first place: how best could DraftKings expand on its position? A feature of the organization’s deals to date has been purchasing new divisions that broaden the overall company’s scope in a horizontal sense. Buying up another operator to simply add a little market share here and there might cost more up front and not actually generate that much in return. So DraftKings followed up the VSiN acquisition with its purchase of Blue Ribbon Software, an Israel-based jackpot and gamification company. “Integrating BlueRibbon’s proprietary, proven technology will enable DraftKings to create dynamic incentives for our users as they engage with our products,” said Paul Liberman, DraftKings president, global technology and product. "The team at BlueRibbon brings technical and gamification expertise and broad industry experience to DraftKings; we are excited to leverage this technology to further differentiate our product offerings and engage customers in new ways.” Clearly, finding ways to differentiate is a key strategy for DraftKings. But this is more of an industry-wide trend: diversify or risk getting left behind.
BALLY’S BUYOUTS In a similar position is the Bally’s brand, which has undergone a series of changes since completing its rebrand from Twin River Worldwide Holdings in November. The operator’s biggest deal of note is perhaps something you would describe as more traditional – a proposed merger with sizeable European brand Gamesys. Here, an amalgamation of regulation-ready
European software and US branding power is exactly the kind of M&A Caesars Entertainment has already got in the works with William Hill. But it’s Bally’s lesser-discussed M&A deals of late that may help it gain a greater defining edge in the market. In January, Bally’s acquired the beautifully named Monkey Knife Fight, North America’s third-largest daily fantasy sports (DFS) operator. "With this acquisition, we are pleased to enter into the high-growth DFS market. Monkey Knife Fight is a unique asset we look forward to incorporating into Bally's constantly growing omni-channel portfolio of land-based casinos and igaming platforms," George Papanier, Bally’s president and CEO, remarked when the deal was announced. In addition to Monkey Knife Fight, Bally’s further acquired SportCaller, a B2B free-to-play (F2P) provider, and has an acquisition pending of igaming supplier Bet.Works. This also includes a failed attempt to purchase Allied Esports Entertainment, an esports firm that eventually went with Element Partners as an alternative buyer. So to recap, Bally’s is no longer just casino or sports betting. To compete in today’s market, it deems it necessary to additionally possess a software supplier, DFS operator, F2P brand and esports firm within its toolkit.
THEY ARE NOT ALONE The key point here, though, is that neither Bally’s nor DraftKings will be alone in following this direction. Broadening horizons is already a key feature of gaming M&A and will continue long into the future. This is especially true in the US where there is such a heavy intersection between media, marketing and sports betting. When assessing operations geographically or by vertical, it’s equally likely most niches have already seen early market leaders develop strongholds in their respective markets. Instead of competing from scratch, it’s therefore logical for leading US and European firms to merge – á la Bally’s and Gamesys, Caesars and William Hill – or for a major player in sports betting to acquire a leading igaming, DFS, F2P or esports brand. The future of US gaming firms is definitely a more rounded one, so it’s natural to expect a more varied selection of M&A. Yes, we may still see land-based behemoths merge with one another, where the market share involved will still be high enough to send reverberations across the sector. But even land-based casino firms will recognize that any shrewd M&A deals they conduct with smaller digital firms may have far more relevance in the longer-term future. Both DraftKings and Bally’s are following similar models but this will not be indicative of them alone; it’s what should follow for the rest of the gaming industry. The online gaming ecosystem of today sees both companies and verticals at opposite ends of the scale intertwine. The gaming M&A deals of tomorrow are beginning to reflect that. GAMINGAMERICA 9
AT ODDS With the country in a period of serious and consequential self reflection and change, Jeffrey Silver, Of Counsel at Dickinson Wright, PLLC, explores the possibility of the gaming industry moving toward a more socialist framework. The United States appears to be at a crossroads in deciding whether its people will or should embrace the concept of socialism. The last election exposed the great economic and power imbalance in this country, which initially focused on the privileges and advantages enjoyed by the rich versus the middle class. But has since pivoted to perceptions of prejudices and disparate treatment between citizens and non-citizens, as well as people of European descent and people of color, sexuality, gun owners and gun abolitionists, and every other manner that people who were once united could be divided. All of these polarizing issues have created dissention, anger and in some cases, violence. Many of us are in a state of shock to see how rapidly the fabric of our society is being deconstructed, while certain media outlets have eagerly fanned the flames of controversy in order to keep this powerful narrative of divisiveness and tension in the forefront of everyone’s mind. 10 GAMINGAMERICA
Meanwhile, after a year of closure, the gaming industry has been dealing with its own economic and human resources turmoil and is content to be distracted from what could be transformative events. Despite catch-word claims of “virtue signaling,” the vast majority of Americans actually agree with the democratic principles of equal justice, equal opportunity, fairness and non-discrimination for all. The stumbling point would be the suggestion that there should be an equal outcome for all, which is contrary to a meritocracy. There will be no All Star Game in Georgia this year and if some have their way, perhaps every WNBA player will be paid the same salary as Steph Curry or LeBron James. After all, under true socialism, everyone must be equal, and individual talents or star power would become meaningless attributes. Where does all of this change leave the gaming industry? Las Vegas has certainly experienced a recent pent-up demand by customers anxious to escape from their year-long
lockdowns. Spring break and the NCAA basketball tournaments brought throngs of visitors back to Nevada casinos, in some cases, much to the chagrin of political leaders fearful of another Covid surge. Recent reports now show that pedestrian traffic on the Las Vegas Strip is at 60% of prepandemic numbers. The Gaming Control Board and Nevada Gaming Commission released a statement that full occupancy and capacity would be available to gaming facilities who managed to have most or all of their employees vaccinated. New megaresorts and attractions have opened or will open soon with the Virgin Hotel remake of the Hard Rock, the MSG Globe arena and the multi-billion dollar Resorts World complex. Major conventions are starting to rebook with the giant World of Concrete conclave scheduled this June and more to follow by the end of 2021. These shows will occupy the magnificent $1 billion Las Vegas Convention Center expansion, and other significant events such as the NFR Rodeo and sporting events at the new stadium will all be allowed to resume at full audience capacity. We are intently absorbed with new gaming opportunities in the US and abroad, and are giddy with the excitement and financial prospects of sports wagering. The question is whether this burst of enthusiasm will continue long term, or, more importantly, if it will be allowed to continue in a country heading in a different direction. With increasing scrutiny on the federal government, will there be the same discretion and self-determination previously left to the states and private industry? Many years ago, I was involved with a licensing decision as a member of the Nevada Gaming Control Board. The denied applicant appealed to the Ninth Circuit Court of Appeals, which upheld the Commission’s decision by proclaiming that gaming was a matter reserved to the states under the Tenth Amendment to the US Constitution. However, last year, the idea of a bi-partisan sports wagering bill was floated in the US Senate. Although the leagues were intrigued by the proposal because of their inability to gain traction for their own revenue participation on a state-by-state basis, the bill was withdrawn. However, this could be the nose of the camel into gaming’s tent. With the increasing centralization of authority in Washington, DC, and the impotence of traditional “checks and balances,” I am not convinced that gaming regulation would remain solely in the hands of local governments if this issue were tested today. On a local level, there’s still evidence of some disagreement in the clash of these new ideologies. During the last presidential primary, the powerful Culinary Union, an affiliate of Unite Here!, supported the moderate Joe Biden over Bernie Sanders. The Culinary leadership preferred the health insurance and wage packages they had negotiated with the resort industry and were in no mood for universal healthcare proposals that could disturb or dilute the first-class benefits already accorded to their members. A recent announcement was made by
John Lee, the democratic mayor of the City of North Las Vegas (Nevada’s 4th largest city), that he was changing his party affiliation to republican because he claimed the democrat socialist contingent has taken over the state democrat party organization. Lest anyone harbor any illusions as to what the socialist hard liners might think about gaming, seven years ago, Robert Galvin, who described himself as a philosopher, sociologist, and religious studies scholar, responded to the question, “Is gambling against the ideals of socialism?” by stating the following: “It seems like it would be obvious why it would not be looked upon favorably if it was a privately run enterprise, so I will not go there. However, how about if it was an enterprise run by the state or the majority? It still seems like it would be viewed in a non-favorable manner as the idea of gambling is for one to have the house win the majority of the time and for the people who are betting to lose. Ideally, in a socialist society there would be no need for gambling as there would be no rich nor poor people, so there would be no need for one to wager their wealth in order to get rich.” This view was recently repeated through postings on the World Socialist website.
Others would quickly point out that people don’t gamble solely with the expectation of winning money. It is the total resort-casino experience, which may include the reward of periodic wins on games of chance, but also embodies the camaraderie with fellow patrons, the exciting atmosphere of entertainment, sporting events and the best of dining, shopping and relaxation. Of course, such attributes may be anathema to anyone willing to ignore the niceties of any argument for the value of casinos. GAMINGAMERICA 11
While it’s true that gaming was tolerated during many periods in the old Soviet Union, in Russia today, like it was in Cuba immediately after their revolution, casinos have now been banished. There are exceptions, such as Viet Nam and Laos, both of which have encouraged casino resorts as a part of their tourism component. However, their intent is to serve as a playground for visitors and their wallets, rather than provide an entertainment diversion for local residents. Despite a large and growing wealthy class in the Peoples Republic of China (PRC), casinos cannot be found inside its traditional geographic borders, and gaming is only permitted in Macau, where entry by its elite gamblers is tightly controlled, and information about the gambling habits of its guests is likely shared with the government. Given the current adversarial stance between the US and the PRC, as well as worldwide travel restrictions upon other nations, it’s unlikely we’ll see either high-rolling Chinese customers or other international visitors in this country in the foreseeable future. How would greater government involvement affect our gaming industry? Would runaway inflation caused by the relentless printing of currency significantly reduce discretionary spending? In the short term, there is probably nothing to fear because if anything, stimulus funds and the prospect of a minimum guaranteed income would be the kind of free money that could easily fuel casino profits. Jobs are returning and there is euphoria about surviving the year-long winter. However, there’s also the expectation of higher minimum wages and increased prices of goods combined with significantly higher taxes on corporate, personal, gaming and gasoline that, when combined with the prospect of enhanced regulation, could mean that future profits can no longer be assured. The question is whether the gaming industry will be able to fade these higher operating costs. For example, a blackjack game with a $10 minimum bet would not be profitable. Using 60 hands per hour as a standard measure for a live game, with a $10 average bet multiplied by the true odds of the game (2-3%), the calculated win per hour per player, before taxes, wages and benefits, would only be $12 to $18. Even if the minimum bet were $25, the win would still only be $30 to $45. With fewer people allowed at the table because of health concerns, and adding all of the salary, benefits, supervision, player premiums and overhead, very little profit would remain. This is why the mobile gaming participants will have a leg up on the brick-and-mortar operator, at least in terms of gaming revenue. The gaming industry is a fragile ecosystem. Whenever a public offering for a casino company is released or a loan is made from an institutional lender, there’s always that one disclosure caveat in their documents about “in the event the laws are changed such that the ability to conduct gaming is affected, that would be a material adverse event.” Again, we are not in that realm today, but we have also witnessed how quickly the tides can change. Despite the best efforts of the 12 GAMINGAMERICA
industry, a new narrative could quickly morph into a new and very destructive direction. Of course, claims that the sky is falling occur at the start of every new presidential cycle. But in discussions with my colleagues, this challenge appears to be different. On that basis, I say we look past the euphoria of that quick financial recovery and sail these uncharted waters as if we were ancient mariners fearing to fall off a flat earth. We must continually remind our political representatives to stay focused on the many benefits provided by the gaming industry, the importance of maintaining local control, and to be wary of a socialist utopia. I am reminded about the heart-wrenching video of a seal that was rescued from the sea after the Exxon Valdez Alaskan oil spill in 1989. Covered in tar, the seal was not expected to survive, but with the assistance of an environmental group, it was nursed back to health, to be released back into its natural habitat. While the cameras were rolling, and with great fanfare, they freed the young seal in the harbor to enjoy the rest of his life. Almost immediately, much to the horror of his caregivers and assembled onlookers, the poor seal was swallowed in one bite by a killer whale that was lurking nearby. We are grateful to have survived this pandemic disaster and finally have nursed ourselves back to health. Now is not the time to lose perspective and vigilance as we navigate the murky waters that still lie ahead. The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the publisher.
“WE ARE INTENTLY ABSORBED WITH NEW GAMING OPPORTUNITIES IN THE US AND ABROAD, AND ARE GIDDY WITH THE EXCITEMENT AND FINANCIAL PROSPECTS OF SPORTS WAGERING. THE QUESTION IS WHETHER THIS BURST OF ENTHUSIASM WILL CONTINUE LONG TERM, OR, MORE IMPORTANTLY, IF IT WILL BE ALLOWED TO CONTINUE IN A COUNTRY HEADING IN A DIFFERENT DIRECTION.”
EVENTFUL With comment from the National Indian Gaming Association and the National Center for American Indian Enterprise Development, Gaming America looks into the return of the Indian Gaming Tradeshow and Convention, running concurrently with the Reservation Economic Summit, and a partnering to illustrate economic diversification in Indian Country. As live events begin to make headway out of the imposed hibernation brought on by the pandemic, the Indian Gaming Tradeshow & Convention, hosted by the National Indian Gaming Association (NIGA), is set to go live again in Las Vegas on July 19 to 22 at the Caesars Forum. It will be co-located with The National Center for American Indian Enterprise Development’s (NCAIED) Reservation Economic Summit (RES), which is taking place July 19 to 21 at the adjacent Bally’s and Paris Hotel & Casino. Originally scheduled to take place in April in San Diego, the decision to postpone and move the Indian Gaming Tradeshow & Convention to Las Vegas was a solution based on local regulations and the ability to provide an in-person event for Indian Country and the gaming industry. One of the marquee events in the gaming calendar, the Tradeshow & Convention has established itself as the premier event for the Indian Gaming industry, and a barometer for Native American economic progress. With meetings and conferences taking a huge hit during 2020, the Indian Gaming Association is joining the RES Indian Conference as one of the first Indian tradeshows in 2021. Organizers are working diligently to structure an event that is fully equipped with attendee and visitor health and safety protocols in place as established by Nevada Governor Steve Sisolak and Clark County in order to provide a safe and effective meeting environment. While those health and safety standards are new, organizers also emphasize that they won’t impact the content, networking events and the overall experience of the event as the all important aspects of the tradeshow that attendees have come to expect will still be presented, including the annual membership meeting, workshops, the gaming commissioner certification series and the Chairman’s honoring luncheon. There will also be a special emphasis on sports betting and the economic fallout from Covid-19. Each topic will be carefully chosen to offer the best perspectives, strategies and tactics from experts and thought leaders within the industry by conference chair, Victor Rocha, and Associate Members Education Track Advisory Committee. 14 GAMINGAMERICA
But the primary focus will be on the important topics that will help operators and vendors succeed in today's ever-changing gaming landscape as tribes reconfigure and adjust to new business models. With new approaches in mind, organizers hope to put on the first large gathering of tribal leaders and casino executives in the country. “We are excited to announce this partnership with the National Center for American Indian Enterprise Development, which hosts RES, as well as our new dates and location,” said Ernie Stevens, Jr., chairman of the National Indian Gaming Association. “It’s more important than ever for Indian Country to unite at the Indian Gaming Tradeshow & Convention and RES as we continue the rebuilding of tribal businesses following the Covid-19 pandemic. Our two great organizations have a long history of coming together to support one another and in this unique year, the joint venture helps coordinate our two shows in one city, and allows for the maximum amount of time for our attendees to secure vaccinations and safely travel.” Conducting business this year is uniquely important as the pandemic's devastation can still be felt throughout tribes across the country. But as we move through the summer, vaccination numbers are growing, and cities across the country are seeing casinos re-open and tribal economies rebuilding business with innovative approaches. The Indian Gaming Tradeshow & Convention will build on its strong foundation of networking, where the Indian community gathers to learn and exchange industry-specific ideas, and its reputation as a cultural celebration of success, unity and self-reliance. "We're excited to announce our partnership with the National Indian Gaming Association at this year's Reservation Economic Summit" said CEO and president of NCAIED Chris James, "With this new format, attendees can register for three significant events focused on economic development in Indian Country. Through resiliency and reinvention with our current partnership with American Indian Business Leaders (AIBL), we'll bring together leaders from across Indian Country for a unique opportunity to uplift Native-owned businesses."
COVER STORY: US SPORTS BETTING
THE NAME OF THE GAME This June marks three years since the United States Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), paving the way for regulated sports betting across the country. In the time since, more than half of all states, plus the District of Columbia, have legalized sports wagering. Several more state legislatures are debating bills to regulate the activity as early as this year. In states where sports betting is already legal, the question is no longer whether operators can attract customers, but rather how fast and large sports betting can grow. Gaming America recently spoke to state officials from a half dozen regulated markets to gather what they’ve learned from the past year, their expectations for the rest of 2021 and why American sports betting has only scratched the surface. When looking for explanations to sports betting’s success in the United States, there’s perhaps no place better to start than Pennsylvania, which has emerged as a top-four market for handle since launching in spring 2019. With two large population centers, seven professional sports teams and several more NCAA Division I football and basketball programs, it’s little surprise that the Keystone State would attract a wide swath of bettors. “Population is, by far, the main factor,” says Doug Harbach, the communications director at the Pennsylvania Gaming Control Board. “As with all other jurisdictions that offer sports wagering online, wagers must be placed within the jurisdiction. Thus, the larger the population, the larger the potential customer pool.” Harbach says location has worked to Pennsylvania’s advantage as well, at least for now. 16 GAMINGAMERICA
“From a retail standpoint, there was certainly an advantage for the casinos, which opened a physical sportsbook to attract out-of-state customers to increase overall volume just as they have done for years to attract out-of-state patrons into their facility for other offerings,” Harbach adds. “There is no doubt that some bettors, favoring a short drive then accessing a land-based casino, entered Pennsylvania in order to establish an account and place online wagers since their state did not offer this option. Of course, with surrounding states like Maryland, New York and Ohio making moves to launch online sports wagering soon, those treks from non-Pennsylvania residents will likely decrease to some extent.” Pennsylvania retail sportsbooks have only partially been able to capitalize on attracting customers, whether in or out of state. Pennsylvania casinos were hit twice by Covid-19 related shutdowns, once last spring and again from December 10 to
COVER STORY: US SPORTS BETTING
January 4. The second shutdown arrived during the final weeks of the NFL season, an especially hard blow in a state that lives off the Philadelphia Eagles and Pittsburgh Steelers. Casinos reopened in January at 50% capacity. The drop in retail sportsbook traffic has expectedly led Pennsylvanians to heavily gravitate toward online sportsbooks. In March, mobile sports wagers made up $514m, or about 90%, of the state’s handle’s monthly handle. “The pandemic was a unique circumstance, one that all of us hope does not occur in our lifetimes. So it’s a good question but probably unanswerable today,” he says. “Certainly, the use of the internet to place wagers will remain strong and likely be the favorable choice for wagering. At the same time, the release from the stringent and necessary safety precautions due to Covid may nudge many gamblers to get out of the house and seek in-person gambling options. We will just have to wait and
see how this highly unusual event plays out.” Far across the continent, a similar dynamic is playing out in Colorado, where legalized sports wagering is nearing its one-year mark. Geography was always sure to play a heavy factor for Colorado’s retail sportsbooks, which are located in the mountain gaming towns of Black Hawk and Central City 40 minutes to the west of Denver, and Cripple Creek two hours to Denver’s south. “People couldn’t go the mountains because in the first initial stages they were closed and they’ve been under different restrictions ever since,” says Dan Hartman, director of the Colorado Division of Gaming. “My feeling in Colorado was always going to be about 93% online and 7% retail. We’re a little bit higher online than that right now. It’s about two or two-and-a-half percent. We’re seeing it gradually pick up market share on the retail side as people get more comfortable. As vaccinations roll out, we’re seeing a lot more people go up to those mountains.” Though still one of the nation’s younger markets, the Centennial State is beginning to flex its sports wagering muscle, as shown by January’s record handle of $327m, followed by February wagers of $267m. Coloradans wager heavily on football and basketball, but what’s unusual about the state’s sports betting breakdown is the surprising popularity of table tennis. Bettors regularly place more money on table tennis than ice hockey, soccer, tennis or golf, which goes against American sports logic. The best explanation is that tennis table gained traction last May, when it was one of the only sports available to bet on during the state’s launch. Remarkably, the sport has maintained a strong and loyal legion of bettors a year later. GAMINGAMERICA 17
COVER STORY: US SPORTS BETTING
“What it did in the beginning was people didn’t come on and just focus on football, basketball or baseball; they focused on what was available,” says Hartman. “I think by doing that, you’re seeing that the other obscure sports that were around, it gave them that opportunity to enjoy or search out and become familiar with what Colorado did offer. You know they’re going to come back to the big four sports, but the little ones never really left their mind.” Colorado joined Michigan as the two to launch sports betting during the first months of the pandemic. In Michigan, retail sportsbooks were open for only four or five days before closing in mid-March. Retail sports wagering was always set to launch well ahead of online because state regulators had to write separate rules for mobile sports wagering and online casinos. Those rules were finalized in early December, about one year after Governor Gretchen Whitmer legalized expanding gaming in the Wolverine State. Online sportsbooks went live on January 22, which Richard Kalm, the executive director of Michigan’s Gaming Control Board, calls record time. “We launched 10 operators for sports betting and online gaming at the same time,” Kalm says. “That year even while we were writing rules, we were communicating directly the other platforms to make sure they’d be ready to go when we pulled the okay. And they were.” Demand was immediate. In February, Michigan’s first month of mobile sports wagering, online sportsbooks reported $302m handle, adding on to the $115m wagered during the last 10 18 GAMINGAMERICA
days of January. Online handle grew to $359m in March, while Detroit’s three retail sportsbooks reported another $24m. Michigan’s market is made hyper competitive by the fact that the state’s gaming tribes can offer sports betting. Bay Mills Indian Community, located on the very northern tip of the state, beat out several tribes for a partnership with DraftKings. The deal is sure to be life-changing for the tribe’s approximately 2,000 members. In March, DraftKings took in $73m of sports betting handle, third in the state behind MotorCity/FanDuel’s $98m and MGM Grand/BetMGM’s $82m. Kalm believes online and retail will coincide nicely as business picks up this summer. “I think what you’re seeing in the market is the online sports betting and online casino games are attracting people who didn’t necessarily travel to a casino anyways,” Kalm says. “When those casinos open at full capacity, you’re going to see that cross pollination in order to keep the numbers robust in the casinos regional environment.” It helps that Detroit’s three commercial casinos are all located within a mile of each other and within walking distance of the city’s professional sports stadiums. “When the Lions are in town, people tend to go to those casinos and bet football,” Kalm says. “When the Tigers are playing, those casinos are right there. They can stay overnight and they can bet on baseball. It helps that we have that relationship of people being there and being allowed to bet.” Detroit is one of the first US cities to offer retail sportsbooks in proximity to professional stadiums and urban nightlife, but it certainly won’t be the last. 300 miles west, the Chicago Cubs have announced plans with DraftKings to open a retail sportsbook at or near Wrigley Field. The city of Chicago is also in the process of gathering proposals for a downtown casino expected to open in 2025. Illinois’ retail sports betting ambitions will hinge greatly on where that casino is built. Though there are a few brick-and-mortar sportsbooks spread out through the Chicago suburbs, they’re not likely to attract the same clientele as a downtown location, says Eric Noggle, senior analyst at the Illinois Commission on Government Forecasting and Accountability. “If you were a tourist and you were looking for a place to do that and you don't know the city very well, not having one in downtown Chicago, you lose out on a potential revenue stream there,” Noggle says. “So I think it is the tourism industry that would really benefit from having a Chicago casino and having a place to go for those people downtown.” Retail sportsbooks take on special significance for Illinois sports bettors, as customers must go inside a physical sportsbook to open a sports betting account. Illinois’ original sports wagering law in 2019 required in-person registration, and last December, Governor J.B. Pritzker signed a pandemic-related executive order allowing for mobile sign-ups in order to slow down foot traffic at casinos as Covid-19 cases soared. That order, however,
COVER STORY: US SPORTS BETTING
expired in early April, which leaves customers no choice but to once again go inside a retail sportsbook to register an account. DraftKings, whose Illinois partner is Casino Queen in East St. Louis, stands the most to lose from in-person registration. A Chicagoland resident would have to drive four hours across the state to create a DraftKings account, or they could choose a competing operator at one of the five sportsbook locations around Chicago. Mobile registration was undoubtedly responsible for Illinois sports betting handle reaching new heights this year. The state saw January sports wagers balloon to a record $582m. Then in February, the Lincoln State surpassed Pennsylvania as the nation’s third top sports betting market, behind New Jersey and Nevada, with handle of $510m. Online betting accounted for an eye-popping 96% of February’s handle. “I’m sure that the sports wagering industry was very pleased to have the ability to do things online,” Noggle says. “Now that that’s being taken away and people have to actually go to the facilities, I think that’s going to hurt online operators a little bit, but it will also be able to help the casinos. You’ll be able to go in person and maybe people will be wagering at the slots and table games as well as doing some sports wagering.” There is precedent for a state overturning mandatory in-person registration, only to see their market skyrocket. Iowa transitioned to mobile registration at the start of 2021, a year-and-a-half into regulated sports betting. The results have been just what state regulators and operators hoped for. January generated handle of $150m, a 30% increase from December and a 62% improvement year-on-year. Between November and January, online handle grew 95% from $62m to $121m, and it held steady at $140m in February despite three fewer days and the drying up of NFL playoffs wagering. Sportsbooks will likely set records too for March when the state saw two of its colleges compete in the NCAA Tournament.
“ONLINE SPORTS BETTING AND ONLINE CASINO GAMES ATTRACT PEOPLE WHO DIDN’T TRAVEL TO A CASINO ANYWAYS. WHEN THOSE CASINOS OPEN AT FULL CAPACITY, YOU’LL SEE THAT CROSS POLLINATION TO KEEP THE NUMBERS ROBUST IN THE REGIONAL ENVIRONMENT.” -RICHARD KALM
The sudden rise in sports wagering activity is something the state hasn’t seen since first launching it in August 2019, according to Brian Ohorilko, director of gaming at the Iowa Racing and Gaming Commission. “We’ve had two periods of spectacular growth – the first months after we launched sports betting in 2019 and these past couple months,” he says. “We’ve had 10 to 12 online operators express interest of doing business in our state, and we saw PointsBet launch mobile sports wagering back in January.” With a population a little over three million, Iowa is a mid-sized market lacking a professional sports team, but home to fiercely loyal college and pro fans. Because the state is located in the heartland, residents tend to support franchises from all over the Midwest. The Kansas City Chiefs of neighboring Missouri were Iowa’s de facto team this winter, leading to a burst of Super Bowl wagering activity. Iowa’s market also may have most in common with Indiana, another midwestern state whose residents live and breathe college athletics. Indiana is home to Big Ten programs in Indiana and Purdue as well Notre Dame, one of the nation’s name-brand college football schools. Several more Division I programs compete in men’s basketball. When crafting Indiana’s sports wagering laws, state regulators made it a point to allow bettors to wager on in-state programs. “There’s no doubt Hoosiers love college basketball, and basketball in general, says Dennis Mullen, director sports wagering and paid fantasy division at the Indiana Gaming Commission. “Our legislation did not prohibit wagering on in-state teams and collegiate events and matches occurring within Indiana. Not having such a prohibition in our Legislation does create more wagering opportunities for patrons and operators.” Mullen credits the state’s regulatory framework as to why Indiana has outperformed for a market its size. “We are strong regulators but we also create an environment where innovation is not stifled and we do not impose unnecessary rules and requirements,” Mullen says. “We also took a collaborative approach with stakeholders and identified best practices. And we were certainly the beneficiaries of much assistance from other regulatory jurisdictions that came before us.” Operators who’ve committed to Indiana are being rewarded in big numbers. Beginning last fall, Indiana pulled off five consecutive months of record handle, culminating in January wagers of $348m. Handle dropped to $273m in February but was back up to $317m in March, driven in part by a men’s NCAA Tournament played exclusively in Indiana; $168m of March wagers were placed on basketball, not counting parlays. Sports wagering proponents hope this year’s March Madness serves as the jumpstart to a prolific late spring and summer season. As bettors continue to wager online at historic levels and more Americans gain confidence to return to retail sportsbooks, there’s every reason to think sports betting’s momentum will carry well into 2021 and beyond. GAMINGAMERICA 19
TRUE TO FORM Kambi’s senior business development director Sarah Robertson explains the unshakable determination and dedication to enterprise a company must adopt in order to grow and stay relevant. Following the repeal of PASPA in 2018, can you describe Kambi’s rate of expansion in the United States and what it looks like today compared to two years ago? In the three years since PASPA’s repeal, we have developed a track record for regulatory expertise and strength of product in the US market, becoming the go-to sports betting option for operators with ambition to achieve market leadership. Crucial to our progress has been our proven history of delivery in matters of compliance. We are live in 14 states, having delivered market firsts in 10. For example, in 2019 we took the first legal wager in New York with our partner Rush Street Interactive at the Rivers Casino & Resort in Schenectady. And in January 2021 we took the first legal online wager in Michigan, launching with four of our partners on day one of online regulation. It’s this ability to pivot our technology to meet any local requirements, while providing a premium sports betting offer capable of driving consistent engagement, that has underpinned our growth to become the sports betting partner to major multi-state operators like Penn National Gaming, Rush Street Interactive and Churchill Downs, as well as local brands including Seneca Gaming Corporation and Jack Entertainment.
As a listed company, did you feel you had a certain obligation to be a frontrunner or the example for others to follow to overturn PASPA? When Kambi was founded more than a decade ago, it was done so with the highest standards of commercial probity and sporting integrity in mind. The company has always had a laser-like focus on regulated markets, and we do not enter markets where sports betting is prohibited. We knew holding ourselves to these high standards would be an important factor when the US opened up. Our unblemished compliance record has been important in our ability to deliver speed to market, accelerating licensing processes.
What are your main priorities now or how have your priorities evolved in terms of other markets opening? Focusing on the US specifically, in 2020 Kambi completed a new online or on-property sportsbook launch roughly once every nine days. Our core focus will be to continue helping our partners to rapidly launch engaging, tailored sportsbooks in existing and regulating markets, as well as expanding our 20 GAMINGAMERICA
commercial reach with tribal operators such as Four Winds and Seneca, alongside other leading multi-state and regional brands, adding to a range of partners.
Are you through the worst of what the pandemic wrought on sports and sports betting? There’s no question the pandemic presented all manner of industries with the most testing conditions they have faced in a generation, and sports betting was no exception, with a number of major sports suspending their calendars. However, 2020 was another year in which we demonstrated its calibre, not just in terms of our depth of offering across more niche sports which came to the forefront during the pandemic, but also our ability to respond to the return of major sports in the second half of the year, delivering year-on-year revenue growth for 2020 of 28%. 2020 was a challenging year, but our goal was the same as it has always been: to deliver growth for our partners. Our recent commercial progress is a reflection of our success in doing so. While obvious caveats apply, the coming months promise a rich array of global sporting events, with a number of competitions, such as soccer’s European Championships, having been postponed to 2021. Furthermore, the forthcoming NFL season promises huge excitement. The Super Bowl between the Kansas City Chiefs and Tampa Bay Buccaneers saw Kambi process the highest bet volumes in our history – three times that of the 2020 incarnation – and we are excited at the possibilities that the new season affords.
ALL THE INGREDIENTS Andrea Rossi, Betsson Group’s commercial director for Southern Europe and LatAm, discusses Latin America’s rapid growth, outlining key considerations across the region’s many markets. Why do you believe LatAm has such great potential? LatAm is a fragmented region where countries differ in many ways and each one has its own peculiarities and quirks. Land-based casinos are very popular across the region and there’s a strong gaming culture among the population. Over the last few years, we’ve seen internet access become far more widespread, as well as an increase in mobile usage and the development and improved availability of local online payment solutions. All of this suggests the region is maturing and becoming very appealing for online gambling operators. For example, Mexico has had a framework in place for many years now while Colombia became the first LatAm country to regulate online gambling back in 2016, and has since recorded 70% market growth year-on-year. We’re also seeing the biggest countries in terms of population and economies, Argentina and Brazil, now regulating online gambling. I believe LatAm has all the ingredients to become one the largest and fastest-growing markets in the world.
How do you identify the most suitable land-based partner, if required? Due to the differences among markets in LatAm, I see it as necessary to team up with local operators to fully embrace culture, earn trust and understand gaming behaviors to be successful. Lately, Betsson has been very active in the region and we have launched into several markets. In Brazil, Colombia and a province of Buenos Aries in Argentina, we have partnered with local organizations that live and breathe the market. Partners usually have different gaming backgrounds, but they all possess a great understanding of their local market. Moreover, they are ambitious, passionate about what they do and know what is required to become and remain successful. From Betsson’s side, we provide these partners with our technology, our online gaming experience in multiple markets, and we also give them all our know-how on what it takes to be an online gaming operator.
How do you decide which markets to target first? We have a clear global expansion strategy, and we understand that for an effective prioritisation of each market it's important to assess each market’s potential. This includes determining benefits vs risks, analyzing the regulatory framework, looking at the level of gaming taxes, checking all the technical requirements and coming up with the best way to successfully penetrate that region. We then base our decision on the result of this internal process, which directly involves the Group’s board, operational management and several areas of the organization, from strategy to finance, legal and compliance, commercial and operations.
What are some of the key considerations for each market? Entering a new market requires us to take into consideration several aspects and deep dive into different indicators such as political conditions, economic situations, internet and mobile technologies, penetration and more. Additionally, it’s very important to assess the market’s banking environment and its access to online payment solutions. This also gives a rather good indication of whether a market is digitally ready or whether it requires the support of a retail-based business model. 22 GAMINGAMERICA
Do regulatory requirements determine market entry? If so, how? Yes, they do. Speed to market is a key factor to consider and what I mean by that is we need to look at the technical requirements needed to adapt to the regulations in place. Some requirements might need extensive technical development to be fully compliant, and we need to see whether we can fit that effort into our timelines or whether it would clash with existing business initiatives. Sometimes to mitigate possible delays, we are flexible enough to use third-party platforms to speed up market entries and, if it makes sense, migrate to our technology at a later stage.
How do you localise your offering in each market? Localization is an important part of our strategy in LatAm. Games of chance, sportsbook and payments localization is all made from Betsson HQ in Malta, where we have access to the data and analytics required to properly localize our proposition. Our local partners and suppliers are also key in the process. They provide knowledge and indications on what works best in each market and their insight influences our offering.
LAS VEGAS REOPENS
ALL IN Nevada Governor Steve Sisolak’s recent decision to move casinos to 100% capacity by June 1 makes Las Vegas poised for a stellar summer season. Las Vegas was already poised for a strong summer 2021 when Nevada Governor Steve Sisolak announced casinos will be able to operate at 100% capacity starting June 1. Sisolak’s ruling is the green flag operators had been eyeing since the Covid-19 pandemic initially shut down the state’s casinos last spring. The decision to return to full operations so soon was in many ways a no-brainer for the Governor. Demand for America’s entertainment capital has taken off since mid-March this year, when the city began to see thousands of out-of-state visitors flock back to casinos for the NCAA Tournament and St. Patrick’s Day. 24 GAMINGAMERICA
Each successive spring weekend has generated sprawling crowds on the Strip and Downtown, and operators are surely thrilled to raise hotel room rates to match demand. There doesn’t seem to be any slowing down the momentum, either. With more than half of adult Americans at least partially vaccinated, appetite for travel is gaining steam. US consumer confidence is reportedly at a pandemic-high, fueled by the latest round of government stimulus checks. Arguably no American city stands to benefit as much as Las Vegas, which will have to heavily rely on domestic tourism this summer. “Southern Nevada's tourism industry took another important step forward with Governor Sisolak's confidence Las Vegas can safely allow full occupancy at all venues starting June 1,” said Steve Hill, president and CEO of the Las Vegas Convention and Visitors Authority. “The wide availability and rapid administration of vaccines will allow our valued events industry to reconvene with confidence and in its entirety. Las Vegas will continue providing the gold standard for health, wellness and safety precautions for the benefit of its workforce, the community and our visitors.” Of all the tell-tale signs that Las Vegas is sensing a comeback, perhaps none is stronger than multiple companies posting hiring ads for at least a dozen areas. That’s according to Alan Feldman, a Distinguished Fellow in Responsible Gaming at the International Gaming Institute and previously a longtime MGM Resorts executive.
LAS VEGAS REOPENS
“Clearly it’s been getting busier,” he told Gaming America. “There’s a lot of positive momentum and a lot of positive energy, while understanding that doesn’t apply to everywhere just yet. Entertainment is still a little bit of a question mark. If the governor, as he said, is able to release 100% capacity on June 1, then I think that starts to spell a much better picture for Las Vegas the rest of the year.” Returning to full capacity by early summer appeared far from inevitable just a few months ago. An underwhelming New Year’s weekend fed into a disappointing January that saw fewer than 1.3m visitors and total hotel occupancy of 32%, according to the LVCVA. Occupancy rose to 42% in February, but that month’s visitation was still down 54% year-on-year to 1.5m people. During those winter months, operators laid down the foundation for spring success by complying with the governor’s social distancing rules, encouraging employees to get regularly tested and later vaccinated, and ramping up hiring in anticipation for the eventual crowds that descended in March and April. “Between the testing programs that some of the hotel companies have put in place, the fact that so many Americans are vaccinated now and will be able to discern their relative safety risk in terms of being vaccinated and traveling, I think we stand in a pretty good position to be welcoming people back,” Feldman added. The big risk in bringing in so many people so early is that they might spread Covid-19 at the local community, particularly among front-line casino workers. Despite casinos aggressively promoting vaccination shots among their workforce, Nevada’s Covid-19 case count undeniably rose between March and April. The state reported approximately 700 new cases on April 19 compared to 173 new cases four weeks prior on March 22. Operators, of course, have made vaccinations a top priority this spring, with Wynn Resorts even hosting a vaccination center at Encore. Wynn CEO Matt Maddox said 60% of the company’s
workforce had been vaccinated as of April 8. The Cosmopolitan of Las Vegas even incentivized employees by committing to $1m of bonuses if the company reaches an 80% vaccination rate by May 1. The month of May will be seen as a bridge between the 50% capacity rate casinos have been working with since mid-March versus full capacity at the start of June. What’s also worth mentioning is the state of Nevada will hand over Covid-19 restriction authorities to individual counties on May 1, which should benefit operators. Clark County Commissioners already voted for Las Vegas-area businesses to being operating at 80% capacity starting May 1. Commissioners also approved changing the required space of social distancing from six to three feet. “Our community has been great so far about getting vaccinated,” said Clark County Commission Chairman Marilyn Kirkpatrick. “If everyone just keeps it up, we’ll get to open up the community 100 percent.” Increased capacity should also go a long way in bringing back conventions, like World of Concrete, which is schedule for June 8-10. The event, geared toward the concrete and masonry construction industries, attracted 60,000 people in 2019. It will be the first mega convention to return to Las Vegas since the start of the pandemic. “The fact that World of Concrete is returning is a very good sign,” Feldman said. “So on the convention side there is a definite feeling of momentum.” The same can’t be said yet about entertainment, however, where “there’s still pockets of anxiety,” according to Feldman. “We need to see a broader and better access in terms of theaters and arenas are back.” Plenty of shows have returned, but the massive entertainment and sporting events Las Vegas is known for are temporarily on hold. The Las Vegas-based UFC hopes to be the first sport to bring full attendance crowds back to the city. UFC president Dana White has already announced a sold-out crowd of 20,800 fans for Connor McGregor and Dustin Poirier, who will fight at T-Mobile Arena on July 10. The event will likely draw in thousands more additional people to Las Vegas that weekend. Summer visitors will be also eager to check out Downtown’s Circa, the newly opened Virgin Hotels, and of course Resorts World Las Vegas, the first ground-up casino-resort to open on the Strip in a decade. Resorts World has officially announced a June 24 opening date, which wisely gives the property more than a week to prepare for the July 4 holiday weekend. “We are filled with gratitude and excitement as we approach our opening this June and hope to play a role in Las Vegas's rebound after what has been an incredibly challenging year for the destination and greater hospitality industry,” said Scott Sibella, president of Resorts World Las Vegas.” With an estimated price tag of $4.3bn, the 3,500-room resort is one of the most ambitious undertakings in modern Las Vegas history. It only feels right that Resorts World should usher in the city’s next era. If all goes accordingly, it will be a grand opening celebration that lasts into the summer and far beyond. GAMINGAMERICA 25
FROM LAND-BASED TO IGAMING Industry experts from Galaxy Gaming, AGS, GameCo and IGT discuss the benefits of expanding from land-based to igaming amid changes due to the ongoing pandemic. CHRIS BONI, IGT PlayDigital vice president
Chris has over 20 years' experience across company and product stages, real-money gaming, sports betting, advanced sports content and analytics. He also held leadership roles at Silicon Valley start-ups.
TODD CRAVENS, Galaxy Gaming, CEO
As a leader in the gaming industry, Todd knows that success demands discipline and a keen sense of business acumen and planning. With nearly 30 years of experience, including executive positions at TCS John Huxley, American Gaming Systems (AGS) and Betson Enterprises, his competitive nature and reputation for building A-class teams is second to none.
ADAM ROSENBERG, GameCo, CEO
Adam joined GameCo in April 2021 after being partner and global head of gaming and leisure at Fortress Investment Group. He also spent 16 years in investment banking at Goldman Sachs, where he built and ran the Global Gaming Group.
MATT REBACK, AGS, executive vice president, operations
Matt leads the company’s slot product operations, including product management, production and service, as well as its interactive division. He focuses on strengthening the company’s product operations to align output with the growing product demand in the marketplace, using his more than 15 years of gaming industry experience. Before joining AGS, Reback was VP of marketing and slot product for Konami Gaming. Before that, he served in many executive positions for Station Casinos and Caesars Entertainment.
AGS has been in igaming for years and we've found there are several benefits being in both land-based and igaming spaces. At AGS, being obsessed with the game is who we are and why we exist. So we focus on creating great games and making them available to as many players and across as many channels as possible so more people can play and enjoy them. So igaming comb ined with our land-based penetration, enables us to offer players the experience 24/7 at the casino, at home, work and on-the-go. Plus, igaming continues to be a growth segment for AGS as we focus on expan ding the amount of content available to play online, partic ipating in new regulated markets, and deepening partn erships with existing third-part y content providers. Finally, iGaming enables us to leverage our investmen t in game development because we can port our retail conte nt to iGaming channels, exposing more players to our games and creating stronger brand recognition and loyalt y.
Let me start by saying that we remain totally committed to our retail product roadmap. We continue to believe that the land-based thesis is proven and compelling. That said, retail penetration can be a very capital-intensive and time-consuming process. IGaming platforms, by contrast, have built-in efficiencies that enable massive scale and rapid proliferation. Of course, it's just as challenging to create compelling games online that appeal to our target audience, but play-testing, experimentation and the path to market can all be iterated much more quickly and with less capital in a digital environment.
WHAT ARE THE BENEFITS OF EXPANDING FROM LAND-BASED TO iGAMING?
Expanding a casino operation into the iGaming segment continues to present meaningful growth opportunities for IGT PlayDigital customers around the world. The notion of iGaming cannibalizing play at brick-and-mortar casinos has been greatly refuted. In fact, if you were to speak with any of our PlayDigital customers with omnichannel operations, you would find a unanimous agreement that iGaming has been additive to their overall businesses and has helped them reach new players, drive incremental revenue and engage their players on a platform that is within players’ reach at most times.
IGaming is just the next step in serving the customer. Customers used to look for cheap rooms and steak and eggs for $1.99. Customers then looked for high-end restaurants and world-class entertainment to go along with their gaming. With iGaming, customers are now looking for entertainment when they are not in a physical casino. The operators and suppliers are responding to how and when the customer wants to consume gaming content.
WHAT WILL YOUR COMPANY DO TO STAND OUT FROM OTHERS IN iGAMING?
Among the greatest differentiators for IGT in the igaming sector are our breadth and depth of our content portfolio, our market access and our long-standing relationships with operators and regulators worldwide. From a content perspective, IGT PlayRGS hosts a vast library of player-tested content. We also leverage our decades of experience as a supplier to its customers’ benefit. With deep relationships with operators and regulators, IGT is uniquely positioned to help its PlayDigital customers quickly gain market access and leverage decades of market intelligence to drive ROI.
From a player experience, we take our obsession with the game seriously, and I mean every little detail - from the math to the theme to the graphics to the bonus features, to the sounds, animations and win celebrations. We are known for our high volatility games that offer the potential for big wins in a short period of time. We feel that our game content, and that consistently exhilarating high volatility experience, differentiates AGS from others in iGaming. From an operator experience, we always strive to be easy to work with and be a good, flexible and responsive partner. We feel that helps us stand out.
Content, content, content. We are very lucky, as we have some of the best-known table games brands in the world. We log over 125 million bets per month online. That is a good start, but we are unwilling to stagnate. While operators are continuing to chase customers and spend on marketing rapidly, we see a world where content will become more important and exclusive to operators and their players. There will be brand extensions of existing games, math models taken from our extensive progressive experience and games that appeal to specific markets. We know what we do well: make great games. We will make more.
GameCo will do what we have always done: we love games, and innovation is at our core. We architect all our games to be fun and interactive, while providing an experience that is different, not just better. We will continue to make games for regulated gambling markets – on land and online – designed to engage existing customers and attract the next generation of players. And we are just getting started.
Over the years, we have been able to perfect and accelerate the process of porting our land-based games to online formats so that now, we are almost able to release games simultaneously in retail and online casinos for an omnichannel launch. We recently released Red Silk online, and we’re getting ready to launch Aztec Chief and Peacock Beauty. All three of these games were recently released and have achieved strong performance on our Orion Portrait platform in land-based casinos, so they are still a fresh new experience in both the retail and online channel.
Absolutely. We are focused, to the greatest extent possible, on developing omnichannel games that are specifically designed to have resonance in both the land-based and iGaming markets. While not all games lend themselves perfectly to this model, we believe that tremendous synergies exist across platforms: both markets would benefit from an infusion of new games and differentiated experiences in order to invigorate product offerings, drive incremental play and deliver the next generation of customers. Having a presence across land-based and iGaming also gives rise to efficiencies in the reutilization of art assets, as well as cross-selling and cross-promotion opportunities; we intend to take full advantage of those attributes in building our brand awareness.
IS THERE A WAY TO EFFECTIVELY SYNERGISE THE TWO OR ARE THEY ULTIMATELY MUTUALLY EXCLUSIVE?
The degree to which our customers choose to merge their land-based operations with their iGaming operations varies greatly based on their individual business models and objectives. The two verticals are inherently complementary and our land-based customers who extract the most value from their IGT PlayDigital investments tend to cross-promote the two channels. A great example of this is the success of IGT’s Powerbucks in Canada, our omnichannel WAP product that customers in Canada leverage to drive play and increase player loyalty. Over the last year, while most casinos in Canada have been closed, games like Powerbucks have enabled casino operators to stay engaged with their players and have given their players the chance of winning life-changing jackpots in the online space. One way our customers go about merging the two channels is onproperty signage and messaging. When entering some casinos, one may find signage that encourages players to download the operator’s iGaming app, or incentivizes them to try an online version of a landbased game. Another method for cross-promotion is through offers delivered directly to a player’s online device that invite players to a casino to enjoy a range of experiences, often based on their online game play. IGT’s PlayCommand platform can be used to support these initiatives, including mining player data to formulate the most compelling and personalized offers possible. Although cross-promotion can be profitable, customers do need to consider unique factors when pursuing this. For example, we sometimes hear that the iGaming to land-based player conversion only happens when a player resides within a defined radius of a casino. If the player resides outside this radius, the approach may need to be different.
I would argue that the two must be linked. Physical casinos used to spend their marketing dollars to drive players into their casino to game. With iGaming and sports betting, instead of spending marketing dollars, casinos have the ability to engage with their customers regardless of their physical presence. Gaming is entertainment, and when a patron is in a physical casino, there is little competition; but the moment the player walks out the door, every other form of entertainment is competing for their attention. The iGaming competitor is not necessarily another operator but anything else that vies for the time of the player, whether it's Netflix, Fortnite or doom scrolling on Twitter.
It’s the ideal time for several reasons. First, given the pandemic, consumers are turning to smartphone technology for personal entertainment and everyday convenience at an unprecedented rate. The pandemic has only accelerated the relevance of and demand for digital options. Governments and regulators have also been moving more quickly to take advantage of this opportunity as it relates to iGaming. Second, iGaming has been trending in a positive direction, across gaming and lottery, for many quarters. Last year alone, IGT’s digital gaming business in the US achieved triple-digit growth. There's no better or more relevant example of this than the record-setting iGaming performance that we’re seeing from Michigan’s online casinos. Third, I believe the continued expansion and success of mobile sports betting will positively influence more states to embrace and support iGaming.
We've had our eyes on iGaming for some time now. While Covid interrupted certain trends and accelerated others, the increasing appeal of all things remote – especially in-game play and regulated gambling markets – has been extraordinary. GameCo is in the ideal category right at the intersection of video games, esports, digital delivery and betting, all of which continue to experience robust demand drivers. We are very fortunate to have received our recent strategic investment from Playtech and SpringOwl and we believe we have the right capital partners and the right strategy for right now.
WHY IS NOW THE TIME TO MAKE THE MOVE TO iGAMING? MATT REBACK:
As new markets open in North and South America, I believe most people recognize being a first mover makes a huge difference. If you believe the thesis that there will be more online gaming in the future, why wait? Again, if an operator can increase the attention time of their players when they are not in the casino, they must do so.
AGS has been in iGaming for years through our acquisition of Gamiom. But we’ve never been as excited to be in iGaming as we are now. AGS continues to accelerate the process of porting our retail content to online, and we’re excited about doing more omnichannel game launches. As we continue to grow our library, we also focus on engaging with game developers and building our portfolio of third-party content. Key are our partnerships with the world’s largest online operators.
Traditionally, the demographics of the land-based player and the iGaming player have been very similar. Because iGaming can reach and accommodate more players than brick-and-mortar casinos, there are opportunities to expand player reach and gradually shift demographics over time. The velocity and variety of PlayCasino content that our customers can offer their players in the online space can be a key driver for shifts of this kind. Additionally, many sports betting mobile apps in states such as New Jersey, Pennsylvania and Michigan feature iGaming content. This creates a situation where it’s likely we’ll see more players cross over into iGaming from sports betting – a segment that typically skews more male and a bit younger than traditional slots players.
In some situations, it may. However, with every passing day, demographics change. Legal players are coming of age now, and have always had a smartphone. It is native to them. This means adoption will continue to be rapid and will be expected on such devices. Players will come to expect their online play to be recognized when they come into physical casinos. Players will also be looking for the same games to be available to them regardless of how they wish to consume the content.
DOES LAND-BASED AND iGAMING APPEAL TO DIFFERENT DEMOGRAPHICS? MATT REBACK: ADAM ROSENBERG:
Yes and no. While the typical customer in land-based casinos tends to be older and more female than her iGaming counterpart, the need for new and different experiences is a powerful force in both environments. Thus, while the demographics are a bit different, the demographic trends are not: hundreds of digital game titles are released each month, and yet we see massive cannibalization among those games (just as we see in the retail market). We believe that GameCo will add value by producing additional revenue sources from new players. The need to attract incremental, younger customers with new and different games is clearly relevant in both markets. That’s what we are focused on doing.
We have found that people who like to play slots want that experience, and they’ll seek it out in land-based casinos, online casinos or a combination of both. An analogy I often use is the experience of watching a movie. Some people like to go to the movie theater, others want to watch at home on their TV, and some people watch movies on their tablets or phones, while others watch on multiple platforms depending on what is most convenient. If it’s a good movie, it's going to be good no matter where you watch it. Similarly, we focus on creating an amazing gaming experience that can be enjoyed online or in a retail casino, and we find that there’s a strong overlap in player appeal. GAMINGAMERICA 29
THE RIGHT CONNECTION Sportech CEO Richard McGuire walks Gaming America through its transformational 2020, and the critical role the company must play in shaping the Connecticut online gaming market. for the whole group was rejected last year, however, but it is clear there will be serious levels of cash coming back to shareholders in the near future, and a de-risking in the current environment. We plan to be a much smaller and leaner company. We have also been working to streamline the company structure, digitise product, and make operations more nimble. This work has meant that going forward we have no debt, are cash-rich, have supportive shareholders, and can look at new opportunities. For us the focus is completing these existing deals, deciding what will be done with the payments, and then deciding what our strategy is in light of the huge potential opportunity in Connecticut now that the state is looking to expand online lottery, casino gaming and sports betting.
Sportech is in a transformational stage. First, we’ve announced the sale of the Global Tote, which covers services to the UK and to clients in many countries across the globe. This is with BetMakers Technology Group, an Australian company that's on an expansion drive, and a great group of people. That deal is progressing well and should complete in H1. We also announced the sale of our Bump 50:50 business, which is more focused on the North American and Canadian market. It’s predominately in-stadium raffles at sporting events, and it’s got a big client list including almost every major sports team, and works closely with a lot of charitable foundations. We streamlined that operation in 2019, installed new management, and last year they signed more new clients than ever before. It was a big success which led to interest and, ultimately, us announcing the sale of that business. So our business, once these deals go through, is pretty much going to be a retail one. It will be predominantly based in Connecticut, with the small lottery business that we currently have supplementing that. The sales will also generate a strong amount of cash (projected £36.1m from the sales alone) and we’re currently in discussion with shareholders over what we will do once we receive the amounts. An approach 30 GAMINGAMERICA
THE FUTURE IN CONNECTICUT At the moment, Governor Ned Lamont’s announcements look to have not been to our explicit benefit, and we feel as though we are not as involved in decision making as we should be. However, we are at present in discussions with the Governor’s office and have provided serious external legal opinion on our rights, how we feel the announcements so far are breaching certain Federal and state laws, and how we can progress to deliver an elegant solution to this collectively. The two key announcements that have been made so far came somewhat as surprises. The first was made during a public hearing on expanding gaming in the state, and towards the end of that session, it was announced that the Governor’s office had finalised an online gaming expansion deal with the Mohegan Tribe. It was a surprise announcement to a lot of people, which was disappointing, but it really mobilised us in terms of us defending our position in a more robust manner, which has helped. The second then included both tribes, but again included Sportech in a way that clearly made sense to the state Governor’s office, but not from our end. One must recognize, however, that Connecticut state offices are currently dealing with the social health and financial challenges of Covid-19 at present, so whereas as we are solely focused on the gaming matters at hand, you can understand why state governance may not be matching our level of focus in that respect.
As we have had more discussions with the Governors’ negotiators, it has become clear that our lack of inclusion was not meant as a sidelining in the way that it may have first appeared, which has been a very positive outcome. The discussions are ongoing between all parties to see if we can find a way that we can continue this expanded gaming initiative without any issues of litigation. We feel that we have a very strong legal standing, and ultimately all parties want to reach a solution and progress the issue.
PLAYING THE LONG GAME We have been strong supporters of gaming expansion here in Connecticut for a number of years, and can certainly say that I feel like our voice is being heard a lot clearer now than at the start of proceedings. We have had some great discussions, especially with Governor Lamont’s chief of staff Paul Mounds, and I feel that since we entered into discussions, progress has certainly been made, and we hope that we can keep this progressing smoothly. I am certainly optimistic that we can get a deal done here that makes sense for everyone involved. Gaming expansion in Connecticut is certainly a significant binary event for us, and it has been years in the making. It is a major focus for Sportech. We have 400 employees in Connecticut, and we’re the only operator currently allowed to make any online bets, so to exclude us and award operational rights to other parties without any RFP process, we feel would not only be wrong, but also against federal precedent. We know about sports betting, and what has become clear in our detailed discussions with the Governor’s office is that for some in the state, this is alien. But not only betting, gaming and gambling, but also fixed-odds betting, which is a completely new concept to a lot of people in the US. This is something I have really noticed in the last few years. We certainly hope that our experience in the matter, and that we’ve been able to provide the state to help people understand it, enables legislature to clearly understand the nuances of multi-operator betting markets and the implications in practice. There certainly are issues with the inclusion of the state lottery in operations. State lotteries run non-competitive businesses that have around 50% no-risk margins, so why legislature would want to enter into highly-competitive markets that have closer to 6-7% GGR margins is unknown. It seems like putting money at risk, especially when it can’t be hedged out of state. We are definitely trying to be involved in assisting this process and helping stakeholders realise the detail and implications of gaming market expansion.
THE EUROPEAN EXPERIENCE We have drawn attention to our prior gaming experience in European markets as part of our stance in Connecticut, as that 32 GAMINGAMERICA
“WE HAVE 400 EMPLOYEES IN CONNECTICUT, AND WE’RE THE ONLY OPERATOR ALLOWED TO MAKE ONLINE BETS, SO TO EXCLUDE US AND AWARD OPERATIONAL RIGHTS TO OTHER PARTIES WITHOUT ANY RFP PROCESS WOULD BE AGAINST FEDERAL PRECEDENT.“ prior experience is invaluable. We engaged Paul Leyland from Regulus Partners to help educate the Connecticut legislature in the trends particularly seen in Europe and Australia. Because if you’re going to write a rule book and start from scratch, it pays dividends to look at what has already happened in other areas. There are lessons to be learned from Europe and the way that fixed-odds horse racing markets have worked in the past, how sports betting works now, how social responsibility measures have progressed, and how advertising standards have been enhanced. All of these experiences can be invaluable as people look to move forward, especially somewhere like Connecticut, which is going to be building a market from the ground up. There appears to be a reticence from some in the United States to make best use of these clear lessons. Naturally many stakeholders are very open to learning about the history of gaming markets in Europe and Australia, but in some quarters there certainly seems to be a feeling that the US is a totally different market and should be approached in total isolation. I believe it’s crucial for legislative bodies to take on as much of these experiences as possible because once laws are set they become very hard to change.
GOING FORWARD One thing that I have found from living and working in the US is that it’s not a singular entity, rather than this idea of one United States. Each state is very different. They may have the same currency and federal laws, but beyond that, they are staggeringly different in every aspect of business operation. Not only do you have different state governance structures, with different priorities and ways of going about business, you also have tribal governments having a big input in a lot of decision making as well. We’ve seen this first hand in Connecticut in our gambling expansion plans. Hopefully we’ll all be able to work together for a mutually-beneficial resolution, as opening up a sports betting market here in Connecticut has implications for the entire state. We all have a great opportunity here and we hope that we can get it over the line. It’s been an interesting challenge so far.
FOOD FOR THOUGHT Oliver Lovat, CEO and MD of the Denstone Group, a consultancy that focuses on customer-facing, asset-backed investments, including casinos, mixes unmet expectations and misplaced trust to cook up a cautionary tale for Las Vegas. A conversation that allegedly took place a couple of decades ago increasingly comes to mind when thinking about Las Vegas. It is said that when media mogul Ted Turner acquired World Championship Wrestling, he called up World Wrestling Federation CEO Vince McMahon and said, “Vince, I’m in the wrestling business.” “Good for you,” supposedly replied Vince, “I’m in the sports entertainment business.” Last September, at the height of the pandemic, I was part of a group of academics and professionals that set out to understand customer attitudes and behaviors related to a post-Covid Las Vegas. The group surveyed over 1,000 people and identified two clear attributes within the customer sample. A large majority of customers were eager to return within the next 12 months. However, for many, there was a concern that Las Vegas no longer represented good value, and they expressed the hope that Covid would force the city to return to that kind of appeal. Together, these two apparent non-sequiturs have given me pause for thought in recent weeks.
WHAT BUSINESS ARE YOU IN? This used to be a standard question that my MBA student groups asked when meeting gaming executives, and frequently the answer they gave would tell a lot about the company that they worked for. Responses ranged from big data marketing companies, to financial services businesses, to branded development operators and many more. The truth is that gaming companies are complex operational entities, but fundamentally they are all in the hospitality sector. Hospitality is about service, range and delivery of offering, high levels of customer engagement, developing environments that elicit an emotional response, and developing experiences that are memorable and engaging. As a further consideration, hospitality within Las Vegas is a highly competitive environment, so while tactical responses can deliver short term success, they are highly replicable and do not deliver sustainable competitive advantage. 34 GAMINGAMERICA
The clear goal of hospitality businesses is customer loyalty, as loyalty and location are the only drivers of strategic competitive advantage. Within a multifaceted business environment like Las Vegas, it’s clear that there are many different customers and many different types of loyalty.
A QUESTION OF LOYALTY John Bowen and Stowe Shoemaker, in their 1998 article in Cornell paper, Loyalty: A Strategic Commitment, note that customers are loyal for two primary reasons: benefits and trust. The accumulation of points in order to receive benefits, which I define as transactional loyalty, seeks to reward those customers who are the most valuable. It’s an incentive for the customer to spend, but there’s an element of pain to defect. A highly acclaimed industry figure once referred this to me as a bribery strategy and not a hospitality strategy. Nonetheless, it has been highly effective as a two-way platform to repeat business and capture customer
data in order to garner customer insights for management decision making. In my own research, as I have indicated in other columns, further loyalty drivers include implementing tribal and emotional aspects, including brands, to give customers a sense of belonging and identity alignment, functional strategies, which are design, delivery and amenity driven, and developing an aspirational model rooted in personalized engagement and aesthetic. However, each of these aspects is a derivative, with the hospitality experience as the means, and loyalty as the end. The second aspect cited by Bowen and Shoemaker is that of trust. The authors quote Robert Shaw, who defines trust as “the belief that those on whom we depend will meet our expectations.” The authors further note that in order to build that trust, hotel operators must act with integrity, their employees must be empowered, that the operators must not exercise opportunistic behavior to gouge customers and must not put inconveniences in the way of customers enjoyment, like “petty hotel policies and procedures,” which are cited as impediments to trust. The relevance of citing this work from over two decades ago is that Dr. Shoemaker is now Dean of The William F. Harrah College of Hospitality at The UNLV, provider of the majority of college educated employees working in the Las Vegas gaming industry, and his research and teaching is particularly relevant today.
TRUST ME, I’M A PROFESSOR The dichotomy of hospitality operators is how to maximize bottom-line revenues while delivering an optimum and most efficient hospitality experience. Former Wynn Resorts CEO Steve Wynn pronounced that if you deliver the best, the profits will come, but that belies the highly sophisticated study into operational detail and preservation of margins that his company performed for decades. Likewise, the rigorous scientific research into customer behavior, led by former Harvard professor Gary Loveman as CEO of Harrah’s, enabled their expansion in the 2000s, and is perhaps the primary case study in big data analytics and real-world delivery that was emulated by many other businesses in this and other sectors. Our own research in a post-Covid Landscape articulated that customers were seeing a diminution of value in the Las Vegas experience. However, on closer inspection, this was only the expression of sentiment that the respondent recognized. What is really being reflected, however, is not a problem with value, but is the diminution of trust in many of the Las Vegas operators, based on unmet expectations and a collection of thousands of individual experiences. And it is understandable to see why: Triple-zero roulette (at 35-1 pay rates), 6/5 blackjack, resort fees, car parking charges (now reversed by certain operators, but still in place by others), tightening slot holds, hidden fees, supplemental
charges and a host of other gripes met by customers, with complaints heavily aired out on discussion boards, podcasts, blogs and social media, and featured in many direct conversations and feedback between visitors and executives. Those of us in the industry can rightly defend the value proposition, but in truth that is not what is being called into question. Neither are these front-line delivery problems, but tactical decisions made by company leadership, inspired by practices in other companies or industries that have proven to increase revenue and short-term shareholder value. A cursory glance at professors McGovern and Moon’s 2007 Harvard paper, Companies and the Customers Who Hate Them, highlights the dangers of these tactics. The authors write, “Any CEO focused on long term sustainability would be wise to identify these strategies and begin dismantling them. Clearly such practices work in the short term as the profits of certain practitioners attest, but as competitors emerge to exploit customers’ pent-up hostility, companies that bullied their customers in the ways described here should expect a punishing response sooner or later.” Recent data shows that McGovern and Moon’s thesis may already have resonance with respect to Las Vegas’ customers. In 2016, 27% of all Las Vegas visitors came from southern California. However by 2019 this was 21%. That is over 6 million fewer customers from the most important feeder market, much of this drive-in. 2020 will be an outlier for obvious reasons, but with increased competition, this should be a big, red warning sign flashing for Strip operators. This loss of trust isn’t systemic across Las Vegas. The authentic GAMINGAMERICA 35
and value operators seen in Downtown Las Vegas have avoided many of the revenue driving tactics seen on The Strip, with a notable variance in outcomes; between 2011 and 2019 gaming revenue Downtown increased by 39.3% compared to an 8.9% increase on The Strip, albeit from a lower base. What we can surmise is that the tactics used to drive RevPAR (revenue per available room) by some Las Vegas operators is severely eroding the trust of the customers. Moreover, it’s out of sync with the strategy of a hospitality business, if indeed hospitality is the sector that Las Vegas gaming operators determine that they are in. Moving forward, if we expect customers to get in a car or an airplane and travel for several hours to come to the Nevada desert, then we have to resolve these matters of trust, especially as the competitive pressures on Las Vegas are set to increase with further deregulation in other states, with newer, shinier resorts challenging those in this city.
STOP. LOOK. LISTEN. THINK. Ted Turner ran WCW from 1989 to 2000. It lost hundreds of millions of dollars during his ownership (including over $60m in one particular year) and was acquired by main rival WWE for $3m. The market cap of WWE at press time is over $4bn. It's vital to understand what business you are in.
Visitors are promising to come back to Las Vegas, but there are serious trust issues. Will the Post-Covid rebound be a catalyst for generational growth or just a one and done? We need to understand not just what customers are saying, but what they mean and why they are feeling a particular way before it’s too late. Prior to the anticipated post-Covid demand surge in 2021-2022, we should take a moment and review our business models, the drivers of competitive advantage and understand what made this city successful. If we just see the forthcoming period of excess demand as a cash grab, we’ll miss an historic opportunity and potentially see an accelerating long-term decline. Strategic competitive advantage is gained by customer loyalty. Trust is a driver of loyalty. If companies are not actively and continually building customer trust, then, like Ted Turner, they don’t understand what business they are in. Gaming operators may self-title as entertainment companies, but as far as the customer is concerned, they are hospitality businesses, and unless loyalty is at the core, especially in a competitive environment such as Las Vegas, then the customer is always free to go elsewhere or stay at home. Trust me, many already are.
BILL PASCRELL, III
SKY’S THE LIMIT Bill Pascrell, III, is partner at Princeton Public Affairs Group and a strategic gaming advisor and consultant across the US, Canada Europe and Australia. Here he catches up with Gaming America on the current regulatory landscape in the US and why M&A will be key moving forward. Roughly 25% of Americans are fully vaccinated and we’re doing approximately 3 million vaccines a day. We have to get 650m vaccines as we have 330m citizens but we’re approaching the half-way mark, now at around 40%, and I think when you get to around 60 or 70% you start to get the herd immunity. So once the travel ban gets lifted, there will certainly be plenty of movement within the industry. Once the vaccine continues to roll out and restrictions get lifted, I believe 2021 is going to end up being another strong year for the online gaming and the US sports betting market. Michigan and Virginia recently launching is all good stuff to continue the expansion country-wide as well. Out of New York, Texas, Florida, Ohio and California, I think Ohio is the ripest to pop in terms of legalizing sports betting very soon. Second, Governor Andrew Cuomo is ready to move in New York but he’s having a few issues politically with nursing home deaths and sexual harassment claims threatening his tenure. The Attorney General in New York is also going to start an independent investigation. He’s not in as strong a position as he was a couple of months ago but he’s still a very clever politician and I think he’s moving away from having lottery control online gaming in the state. He definitely wants online gaming with one of the motivations being that 25% of New Jersey’s gross gaming revenue (GGR) comes from New York. Customers come across the bridges and through tunnels, and he wants to capture that back, considering it’s the fourth largest state in the nation. New York is a Mecca when you consider the sports teams, population and financial markets. Cuomo has also made it clear he wants to get it done before the budget, which needs to be completed by May 15. It’s in the budget and it will move away from a monopolistic regulatory regime where the lottery runs online gaming in New York. I think it’s close and the legislatures are in a much stronger position than they were four or five months ago. Ultimately in the next 75 days, there’s a budget and I’m 90% sure legalizing online sports betting will be in the budget. But recapture isn’t going to be straightforward as I foresee New Jersey continuing to innovate in the market. We’re very close to sorting out legislating esports. The state 38 GAMINGAMERICA
is well positioned even if legislation goes through in New York to keep hold of the majority of its gaming revenue. New Jersey has had consecutive months of passing $900m in sports wagering handle, just missing out on the $1bn mark but we’re so far ahead of everyone else in the US, and New Jersey is now the third largest jurisdiction for online gaming worldwide, third to only Germany and the UK. The power of the New York media, the pent-up interest of sports betting and the fact that on Super Bowl Sunday in February, thousands of New Yorkers made it across the border just to get into New Jersey to place a bet, it sounds a little silly that the state hasn’t regulated online sports betting yet. When New York pops, and you could have a real opportunity to bet on sports online by year-end, that’s big for the whole industry in the US.
ON THE WAY TO BEING NUMBER ONE In Texas, Governor Greg Abbott is very keen to legalize sports betting this year since their legislative sessions occur biannually, so if nothing is sorted in the next four months, then they’re not going to be able to come back until 2023. I’m optimistic that Ohio Governor Mike DeWine is working to do something immediately based on the discussions I’ve had with him. Speaking about California, that state is nowhere, and it doesn’t look like it’s coming on board anytime soon. In Florida, the session there ends in the first week in April as they have a 60-day session. Governor Ron DeSantis wants to do something but in order for anything to happen, the state has to renegotiate the compact with the Seminole tribe. I was just with the chairman of the tribe and the CEO of Hard Rock International and they’re not pushing hard, but they’re collaborating with the Governor. There is a chance that something could happen with pushing through sports betting, but I think it’s more likely to happen this time next year. Nobody believed me when I said that New Jersey is going to be one of the strongest online markets in the world many years ago, and a lot of states are starting to replicate what they did. We see states continuously coming online, reinforcing my confidence that the US will be the most important online
BILL PASCRELL, III
market worldwide in the coming years. It’s all coming together nicely, and I believe the sky’s the limit for the US and I think we’ve got it right so far, while continuously looking at how to improve responsible gaming so we don’t have what’s happened in the UK, where operators and regulators go in opposite directions. If you’re a publicly traded company with a licence in the US, you’re going to have a great four- or five-year progression, if not longer.
EUROPEAN ACQUISITIONS TO TAKE OFF I think the bigger public companies will continue to do mergers and acquisitions. I’m hopeful it doesn’t quash a lot of start-ups because such businesses are crucial to innovation. It’s becoming increasingly more difficult financially for start-ups to get into the US market and you’ve got to have a lot of resources. There have been many US companies trying to acquire publicly-traded online operators from Europe and other parts
“THERE HAVE BEEN MANY US COMPANIES TRYING TO ACQUIRE PUBLICLY-TRADED ONLINE OPERATORS FROM EUROPE AND OTHER PARTS OF THE WORLD. I THINK YOU’RE GOING TO START SEEING THE REVERSE HAPPENING, WHERE SOME OF THESE ONLINE COMPANIES WILL ACQUIRE US-BASED ONLINE CASINO OPERATIONS AND, PERSONALLY, I SEE THAT BEING A BETTER FIT.”
BILL PASCRELL, III
offer such as that, they may come back in a few months with another one. Entain and MGM have a very strong and positive relationship and I think those discussions informally will continue but both companies right now have their own interests, and in order for the coalition to move forward, they’ve got to focus on that before we start talking about M&A stuff.
EUROPEAN ACQUISITIONS TO TAKE OFF of the world. I think you’re going to start seeing the reverse happening, where some of these online companies will acquire US-based online casino operations and, personally, I see that being a better fit. MGM Resorts is a great company and a great US brand but they don’t have a great deal of experience online. If you acquire a company like Entain, are you going to be able to understand the importance of being nimble and innovative? I also think you’re going to start seeing a lot of European companies and perhaps companies in Australia, New Zealand and Israel acquire US assets. It's a huge compliment to Entain that MGM Resorts made an offer for it. I do think that MGM’s offer was undervalued but they made a play and the Entain board has pressed the pause button on it for now. When a company makes an
One of the most rewarding professional opportunities outside of financial compensation is Entain’s leadership on responsible gambling. It’s the first operator, and I represent more than 30 across the globe, to come out with a socially responsible communal approach to responsible gaming, both in the educational and practical side when it comes to software-blocking tools. Entain set off the mark and now you have others such as bet365 and Golden Nugget who now realise they too have got to get ahead of the curve on safer gambling so we can have a sustainable gaming environment and not let what happened in the UK take place in the US. It’s so unfortunate because the UK has such as robust industry but now the regulators have gone in another direction, and we want to learn from that experience. GAMINGAMERICA 39
GAINING THE EDGE With sportsbook innovation constantly evolving, the offering and experience that operators can provide customers becomes more paramount. Ed Peace, MD of Sporting Solutions, gives his take on what a stand-out tech offering truly looks like. Comparing the sportsbooks of today can be comparable to a game of spot the difference. Most carry an almost identical offering, with big overlaps between competitors on aspects ranging from content and promotions to user experience and interface. The trend is not only prominent in mature European markets, but also in the nascent sports betting states across North America, where habits from the old world have firmly planted their flag. What’s needed for both domestic and multi-national operators is a deeper understanding of delivering localized products, with a focus on differentiation through automation of the pricing and risk management functions. As more states move to legalize sports betting, attaching hefty compliance costs and regulatory constraints, the common one-size approach often employed no longer works for operators to achieve sustainable profits. White-label solutions may have found a place in the grey to black markets where there’s a route to avoid tax and social responsibility costs. But the model is no longer viable in regulated territories. Data carries a premium; the importance of player welfare has never been greater; licensing, technology and marketing costs have rocketed; and after an era when theoretical margins have declined, commoditized pricing has seen its time. A belief that “if everyone offers the same odds, they can’t be wrong” has led to most operators copying prices for many years – either directly or via a low-cost “pricing” supplier. The result is that price differentiation driven by expert management of actual book exposure is now a missing piece in most operators’ value chain. By investing in a solution underpinned by expert pricing and risk management, operators can exploit this deficiency to differentiate their sportsbook against mass competition. Differentiation through price provides an all too overlooked opportunity to drive customer engagement outside of typical incentive-lead promotions, and operators rarely look to pricing as a viable marketing tool. Price, after all, is a fundamental part of the marketing mix and sports betting is a consumer market like any other. Sportsbook personalisation through customer analytics is also vital to enhance customer experience, maintaining competitive advantage and growing margins, but also in being more proactive 40 GAMINGAMERICA
in areas of safer gambling where historic bet data can be used to identify anomalous customer behaviour. This point is especially poignant in North America, where player protection has been at the forefront of the legislative agenda. We’re not talking about the rudimentary analytics based on overly subjective and manual processes, either. These rarely go further than leveraging data on customer preferences to push targeted content and promotions. Instead, what’s needed is a fully automated, integrated and intuitive set of analytics that keeps up with the rapidly expanding scale of operations, and appropriately accounts for the complex, dynamic and skill-based nature of sports betting. Integrated alongside automated risk adjusted price management, this progressive approach allows operators to optimise their odds in real-time. It’s a tried and tested method borrowed from financial markets. The world of equities and hedge funds have long embraced automation of human expertise to improve volume and margins. Also, it’s proven that these same benefits can be gained when applied to sports betting. Adopting econometric techniques, such as the workings of revealed preference theory, into risk management algorithms ensures profitable decision-making and consistently enhanced returns. It also provides a way out from only offering static, blanket odds scraped from other sportsbooks that feed the void of differentiation. With odds that move progressively, in line with changes to liability and according to where the operator wants to position their brand in real-time, comes discernible market advantage. While this may sound the death knell for manual trading services and those who rely on them, for those who embrace automated risk adjusted pricing and enhanced customer analytics, the benefits are huge. Considering increased volume, enhanced margins, differentiated pricing, a stronger brand position and more consistent returns, opting for automation is a sure route to gain market share. If your eyes are set on success in the North American market, then only with an innovative approach to pricing and risk will you have a solid foundation for success.
CANADIAN GAMING ASSOCIATION
PICKING UP THE PACE Canadian Gaming Association CEO Paul Burns provides an in-depth update on the legalization of single-event sports wagering in Canada, including witness testimony from key industry figures.
The Canadian Gaming Association’s decade-long pursuit of a legislative amendment to legalize single-event sports wagering will hopefully be realized in 2021. Near constant effort over the years to build a broad coalition of support with labour, business, and sport and community organizations has kept the issue on the legislative agenda and earned Bill C-218 – first introduced by Kevin Waugh, MP for Saskatoon-Greenwood, as a Private Member’s Bill last year – all-party support in the House of Commons. The common sentiment by all stakeholders is that this legislation is long overdue. US sports betting is flourishing, and Canada’s gaming industry and sports leagues recognize 42 GAMINGAMERICA
how they can benefit from it. From a consumer protection point, it’s impossible to ensure responsible gambling tools are available when an activity is taking place in the shadows. Only by regulating single-event sports betting can we be sure customers are protected and that benefits flow to legal operators and the communities in which they're generated. On February 17, by an overwhelming majority of 303-15, Bill C-218 was sent to the Standing Committee on Justice and Human Rights for further study. Approximately 30 witnesses have appeared over five days of hearings, including, but not limited to, the Canadian Olympic Committee, Canadian Centre for Ethics in Sports, a provincial lottery corporation, the Saskatchewan Indian Gaming Authority (SIGA), the former Commissioner of the Ontario Provincial Police, the Responsible Gambling Council, the NHL and the CGA. Even more organizations have submitted briefs to the committee, which are available to view and download. Hearings wrapped up on March 25 and, two days later, C-218 was unanimously approved by the Standing Committee on Justice and Human Rights. The sole amendment to the bill is a carve-out for Canada’s horse racing industry, which first appeared in Bill C-13 and gives the Canadian Pari-Mutual Agency sole oversight of wagers placed on horse racing. The Canadian Pari-Mutuel Agency is a Canadian government agency of Agriculture and Agri-Food Canada that regulates and supervises pari-mutuel betting on horse racing at racetracks across the country, to ensure pari-mutuel betting is done in a fair way to benefit the public. Fixed odds wagering on horse racing will not be permitted. At press time, the final debate on C-218 is expected to take place in the House of Commons, and will then need to repeat the process in the Senate, which we hope will begin in soon after. As we look ahead to the Senate process, which can be slow moving, it’s useful to take note of the witness testimony of a handful of important stakeholders which reflects the key
CANADIAN GAMING ASSOCIATION
WITNESS TESTIMONY Shelley White, CEO, Responsible Gambling Council “RGC believes it's in the best interest of Canadians and Canadian society as a whole that Bill C 218 should be passed. The good news is we don't need to recreate the wheel. Most of the standards already exist and are in place in land-based gambling, and we also have the benefit of lessons learned from other jurisdictions.” Zane Hansen, President & CEO, SIGA [Regulated single-event sports betting] also protects the interests of our customers. As regulated operators, we make sure our customers are well-informed on the games we provide, and the integrity of the game is preserved. So as legal operators, we are held to high standards of accountability in areas such as industry regulation, responsible gaming and processing of financial transactions. I think it would improve that whole area. Keith Wachtel, chief business officer and senior EVP of Global Partnerships, NHL “Though the NHL had previously opposed single-event sports wagering, for the reasons we have publicly stated on the record, the practical reality is that the landscape in North America has changed. Our experience in the United States … has demonstrated that a well-regulated marketplace that both advances and protects the interests of relevant constituencies can be established in a safe and responsible manner."
messages we will carry forward to the Senators who will be evaluating the bill. The CGA itself noted it is only through the regulation of this activity that it can be brought out of the shadows where it currently operates and into the light, where we can ensure that proper player protections are available and enforced. Across the country, provinces are working on their regulatory standards in preparation for the legalization of single-event sports betting. The important point to remember is that the Criminal Code amendment only legalizes single-event sports betting. After that, it will be up to each province to decide how
and when (and if ) it will offer the products and services. The CGA’s Regulatory Innovation Committee, established in 2019 as a platform for industry and regulators to examine forward-looking regulatory innovation – in particular in the areas of harmonization and operational efficiency – is currently working to develop standards for single-event sports wagering, as there is a need to address issues that will be specific to the implementation of sport and event wagering in Canada. We remain hopeful that after 10 years, the CGA and all affected stakeholders will be successful in legalizing single-event sports betting in Canada. GAMINGAMERICA 43
THE INNOVATION GROUP
GAMING IN THE POST-COVID ERA Thomas Zitt, EVP, The Innovation Group, examines whether the Roaring 20s are really around the corner. Table 1: Bricks-and-Mortar Gaming Revenue Trends (Year on Year) OCT 2020
Connecticut (slots only)
New England Total
Ohio Midwest Total Louisiana Mississippi (includes sports betting) South Total
Mountain West Total
Source: State gaming commissions and lotteries. Note: Mississippi reports gaming revenue inclusive of sports betting. All other state data is for table and slot revenue only to maintain same-store comparisons of on-site spending.
It’s spring, and the gaming press is filled with season-appropriate talk of pent-up demand and a second-coming of the Roaring Twenties. In this article, The Innovation Group assesses what recent gaming revenue and company earnings results portend for a post-Covid world in regional US bricks-and-mortar casinos. Although consistent national patterns are hard to discern, recent signs have been encouraging. With states reopening anywhere between May and September, early results showed a variety of market responses. A handful of states actually enjoyed revenue growth despite pandemic-related restrictions, as pent-up demand was released and competitors remained closed. More recently, there has been a general upand-down trend in many markets, with strong results in October giving way in November and December as the virus surged and some states curtailed operations (like New York’s curfew, which lasted through April 4) or shut down entirely (Illinois, Michigan and Rhode Island). January ticked back up while February was flat at best. While the East Coast markets have generally been more cautious in reopening than the South, Midwest, and Mountain West, the gap has narrowed as Covid-19 cases have dropped. Of note: revenue in Deadwood, South Dakota, has grown every month since reopening as competing tribal casinos remained closed through late February.
THE INNOVATION GROUP
reported significant increases over February, and most exceeded daily averages set in the months before March 2020.
March looked very strong in the states that had reported by press time, as shown in Table 2. On a daily win basis, all states Table 2: Average Daily Win (000s) CT
% Change over Feb
One reason revenue has been relatively strong despite capacity restrictions is that casinos have kept some of their best
customers coming through the door. In the four states that still track admissions, win per visit has risen in the 20%-40% range.
Table 3: Win per Admission IOWA
Trend since Reopening
% Change % Change in Admissions
Likewise, Red Rock Resorts in its 2020 annual report noted “favorable customer trends” after reopening most of its properties in June, “including strong visitation from a younger demographic, increased spend per visit, more time spent on device and increased return of our core customers.” Non-gaming has not fared as well. In a review of public filings by leading US gaming companies for Q4 2020, we found that revenue from amenities declined by 65% compared to a 20% drop in gaming revenue. This shift toward higher-margin gaming operations, along with
general improvements in efficiencies, has led to improved operating margins in regional and Las Vegas locals' casinos. As Table 4 shows, Q4 operating costs were cut by a greater percentage than the decline in revenue in all but one regional segment. Boyd Gaming actually reported a gain in EBITDA in its Midwest & South segment, while its Las Vegas Downtown segment suffered an operating loss. Also of note is that Red Rock Resorts’ fee from managing Graton Casino Resort grew by more than 20%, suggestive of Q4 growth in the Northern California market.
Table 4: Fourth Quarter Results (000s) 2020
Penn National Gaming $895,400
Gaming Revenue Net Revenue
% Margin Monarch Casino & Resort
% Margin Churchill Downs (Gaming Segment) Net Revenue
% Margin Boyd Gaming Corporation
Churchill Downs (Gaming Segment) Net Revenue
THE INNOVATION GROUP
Table 4: Fourth Quarter Results (000s) Continued
Boyd Gaming Corporation
% Margin Boyd Gaming (LV Locals Segment) Net Revenue
Native American Management Fees
Native American EBITDA
% Margin Boyd Gaming (Downtown LV Segment)
Boyd Gaming (Midwest & South Segment)
% Margin Red Rocks Resorts
Red Rocks Resorts (LV Segment)
% Margin Full House Resorts
Caesars Entertainment (Las Vegas Segment)
EBITDA % Margin Caesars Entertainment (Regional Segment) Net Revenue
Note: EBITDA(R) is Adjusted as reported in filings; and operating costs are non-GAAP calculations
Regional operators are understandably jazzed by these trends, although the questions remain: What happens in a post-Covid world? When does Las Vegas fully reopen? When do people start going on cruises again? When do federal relief payments end? And what will it take to bring back the last five, 10 or 20% of gamers to the casino floor? Shutting loss-leader amenities during the pandemic was obviously non-controversial, but what will a permanent amenity package look like in the future? Will buffets reopen, and if not, what will take their place? All this is to say that while there is mounting evidence US casinos are in for some very good months ahead, it remains to be seen at what level regional markets will stabilize once all entertainment and travel options are open to consumers.
SPORTS DATA 101 Stephen Crystal, founder of SCCG Management, writes on driving data and opportunity in the US sports betting sector. The availability of timely, high-quality sports data has never been more critical to gaming industry operators and consumers. Consider, though, the massive number of sporting events played every day around the world. It would be an unrealistically huge investment for even the most prominent sports media companies to cover and capture statistics from each of these events in real-time. This reality has created a new industry in real-time sports data firms, which can scale the collection of game events and sell access to that data to multiple consumers.
OFFICIAL LEAGUE DATA Not all data is considered equal. In the sports betting industry expansion across the US, there has been a lot of discussion on the control over data and what data can be legitimately used by sports betting operators to consummate wagers. Leagues have used these arguments to create additional revenue streams for their organizations by monetizing their data. While the organizations themselves can't participate directly in sports wagering revenue, integrity fees imposed upon the operators have been the league's preferred methods to drive revenue. Some jurisdictions have made distinctions beyond the binary, official vs. not, creating tiers. For example, in Illinois: • Tier 1 sports wagers are made before the sports event has begun and determined solely by a final score or outcome of a sports event. • Tier 2 sports wagers are any other sports wagers. These are most commonly in-play sports wagers and proposition bets. This complexity leads to the need to understand who owns responsibility for ensuring what data is being used in each jurisdiction. Does the data feed provider include metadata within the results message indicating whether the information is official, Tier 1, or Tier 2? Does the operator bear the responsibility for interpreting the data on their side of the process?
LOOKING INSIDE THE DATA FEED FACTORY Most real-time sports event data, such as scores, are collected by human beings working for a data feed service. These employees or contractors are sometimes referred to as "scouts." These people enter this data into specialized software provided by the data feed service. Quality assurance processes manage this manual inflow of data using a combination of supervisors and systems that 48 GAMINGAMERICA
can flag data entries that fall outside likely norms. Automation is also a significant part of this data collection process. Internet bots, or robots, are software applications that run scripts to perform tasks on the internet. It's estimated that half of all traffic on the internet is bot traffic. Sports data collection bots can scrape HTML from webpages containing the data. When that data isn't available directly on a crawled webpage, the bot can use specialized requests for data, such as Ajax crawling, which causes the website to respond with the data for which the data feed service needs. There are several other different methods for pulling this data from third-party web pages. In most cases, these are just technically different methods for requesting data from a web service. These still result in a response message containing structured data or a rendered webpage that can be scraped or read using optical character recognition, also called OCR.
REQUESTING DATA FROM CONTENT DELIVERY NETWORK Whether a human being or a system collects this data, it is then standardized and saved to a massive database. The database is connected to a web service, making this data available through the internet. This web service hosts the application programming
interface, better known as an API, which returns specific data as requested from a third party – the customers of the sports data firm. The API is essential as the customers of the sports data firms aren't always looking for a massive blob of all available data associated with a game. Instead, they're looking for a particular set of data needed for a business purpose, supported by the API rules defined in the API request. From simple requests like, "What is the current Game score?" to "How many Games did Team A lose with a score of '0'." These are all examples of pull requests for data. In addition to requests for specific API data, we have Push APIs, which don't wait for requests for information. They send time-sensitive information to a customer as soon as the information is available. Push APIs know to send this information to customers because customers subscribe or connect to the feed as a known client. These Push messages are essential for sportsbook operators and sports media companies who need this information immediately to resolve a bet or display an outcome to viewers. From the database to the web service, to the application programming interface, all of this technical infrastructure makes up the Content Delivery Network (CDN). The CDN enables the casino gaming, sportsbook, and igaming industry efficiently and at a massive scale. What remains undiscussed here is the engineering required to make this system react with the shortest delays possible.
LIES, DAMN LIES, AND STATISTICS The CDN databases normalize and store data to quickly and efficiently make data requests as fast, and easy, as possible for its APIs. Customers of the data feed services often need this historical data aggregated in different ways. The origin of the phrase, "Lies, damn lies, and statistics," is unclear, but its sentiment is that even perfectly accurate statistics require analytical thinking to use meaningfully. Analysts often push back on traditional practices by asking, "Why do we believe what we have always believed?" In this way, statistical analysis has identified flaws in conventional wisdom to improve decision-making. The movie Moneyball famously brought this thinking to the mainstream and has driven decision-making in areas such as: • Identifying players who overperform their peers in non-obvious ways and using those players to their peak effectiveness based on these talents • Predicting opponent behavior by using historical data to understand future decision-making • Improving the way decisions are made, such as the timing for sending relief pitchers in baseball or when to rest players • Ranking players to determine line-ups
REAL-TIME DATA The sheer volume of data generated by sports is astounding. Sources including the Wall Street Journal and major sports
leagues have collected statistics on action generated within games across all major sports: • Soccer, the leader in action throughout a game, racks up almost an hour of activity (50%) in a two-hour match. • Close behind is hockey, with an average of 60 minutes of action (43%) in a two-hour and twenty-minute game. • A three-hour baseball game contains almost 18 minutes of activity (10%). • American football, around 11 minutes of action in a three-hour match (6%). In some cases, this may seem like relatively short windows of action, but consider that almost every relevant action taken by each player, every moment of the game, can create a fact or statistic about the game: • How far did the player run? • At what speed did the player run? • Who scored, what is the current score and how many points has the scorer made in this period? • Who carried the ball, for how long and how far? • Did an action result in a warning? Any 10-second period in a game can generate dozens statistical data points, many of which the data feed provider captures through the fastest possible human and system processes. These systems deliver these facts on demand and are pushed in real-time to their customers, on average between seven and 11 minutes faster than those displayed to television and OTT channel viewers. This invisible infrastructure empowers analysts, marketers, salespeople, broadcasters and fans worldwide. Demand for this data shows no signs of leveling off and continue to expand into new use cases for cryptocurrency oracles and AI. As such, we expect to see new industries that we haven't even begun to understand spin off from the ready availability of this high-quality real-time fountain of sports data.
SCCGManagement is a consultancy that specializes in sports betting, igaming, sports marketing, affiliate marketing, technology, intellectual property protection, product commercialization, esports, capital formation, M&A, joint ventures, casino management, and governmental and legal affairs for the casino and igaming industry. Stephen Crystal has spent over 25 years in all aspects of the casino and gaming technology industry and its intersection with esports and igaming. He has served as an attorney representing public and private gaming companies, a gaming executive employing thousands of employees, and an investor and advisor on over 1 billion dollars of project finance, mergers, and acquisitions in the casino gaming technology space. GAMINGAMERICA 49
JOSEPH ADDABBO, JR.
STATE OF MIND New York Senator Joseph Addabbo, Jr. speaks candidly about his state’s integral role to help carry the torch for online sports betting in the United States.
JOSEPH ADDABBO, JR.
“THE MODEL THAT IS GOING AHEAD IS CLOSER TO THE ONE SUPPORTED BY GOVERNOR CUOMO IN ITS COMPOSITION THAN OUR ONE, WHICH WAS BASED MORE ON A BROAD COMPETITIVE MARKETPLACE. HOWEVER, IF THE GOVERNOR HAD STUCK TO HIS GUNS AND HAD NOT BEEN WILLING TO NEGOTIATE FROM HIS MODEL, AND WE HAD STUCK TO OURS AND DONE THE SAME, THEN QUITE FRANKLY WE WOULDN’T BE BRINGING MOBILE SPORTS BETTING TO NEW YORK THIS YEAR AT ALL.” To me it was long overdue. I have always thought that New York should have been participating in mobile sports betting from when the Supreme Court repealed PASPA. So, while we have a little catching up to do, I am pleased to say that New York has entered the arena of mobile sports betting.
A COMPETITIVE MARKET While the success of neighboring states has made it important for New York to go live with a mobile sports betting market, there are, and have been, numerous factors at play for some time. We can see right now that Connecticut is working to come online and that both Pennsylvania and New Jersey have already created successful online gaming markets, but there are other factors beside regional competition.
IN-HOUSE GAINS Within New York, there has been illegal gambling activity taking place and there are people here that may be suffering from gaming addiction who we can’t currently assess and help because their activity is across borders. The Covid-19 pandemic has wreaked economic havoc on New York state; we had roughly a $15bn deficit in the budget. So we have needed revenue. Also, the regulation on mobile sports betting can provide a huge boost to educational funds and job creation. These have been key driving factors from within the state, in addition to obvious outward competition, that have led to mobile sports betting being initiated in New York. Sometimes problematic gaming and addiction can be overlooked when discussing gambling expansions. I have been proud to have been working on this issue for more than two years, and talking to those who are very concerned, as I am, about problematic gaming and addiction.
Due to this, we have made sure that there are numerous different safety protocols and measures in place that can help not only those that develop gambling addictions, but help people before that point, and educate them on the potential pitfalls and issues that can arise. We have around $6m in funding now set aside per year for addiction and pre-addiction programs, and safeguards needed to address any concerns people may have regarding problematic gaming.
USING THE EUROPEAN EXPERIENCE When drafting this bill, and crafting the language of it, we looked not only at our neighbor states, how they have done, and how they’ve treated certain programs, but we also looked overseas to see how European markets have operated mobile sports betting. We incorporated a lot of research about what has happened in these markets, and how the markets themselves have progressed and dealt with developments, into our bill here in New York state.
THE CENTRALIZED MODEL The model that is going ahead is closer to the one supported by Governor Cuomo in its composition than our one, which was based more on a broad competitive marketplace. However, if the Governor had stuck to his guns and had not been willing to negotiate from his model, and we had stuck to ours and done the same, then quite frankly we wouldn’t be bringing mobile sports betting to New York this year at all. The fact that we have worked out a hybrid model - where it's the Governor’s preferred structure, but written in our language - I believe works best for our state, and will provide New Yorkers with a premium mobile sports betting product that they will be proud to use. GAMINGAMERICA 51
JOSEPH ADDABBO, JR.
only use our product, but stay with us in order to support the long-term sustainability and success of the program. It’s certainly a tough thing to do to tell New Yorkers to get out of their comfort zone and established routine, but we certainly believe that if we have a credible, premier product that they want to use, then the market is going to be very successful. We are New York. We demand a premier product. We only want the best of the best for our players. As a market, New York, of course, has huge potential. Many see us as one of the sports capitals of the world and certainly with 19 million people and a huge tourist base, we certainly have the potential to eclipse Nevada, and even New Jersey in terms of handle. I do think that knowing that is the potential, we should absolutely be aiming for it. Our target should be that high, and we should move forward with optimism that we can achieve it.
NEW YORK IN FIVE YEARS
JOSEPH ADDABBO, JR.
With good accessibility throughout the state, I would like to think that the New York mobile sports betting market will be perceived globally as one of the top products in the world. I hope that we can catch, and keep up with, the pace of technology, since technology in this industry is advancing at a rapid pace. I hope we’re able to keep up with that and keep up volumes since the market and the product will keep evolving, and we have to be ready for that. We have to be looking ahead to see what the next best thing might be, and then make sure we’re ready that New Yorkers have a great product that they are proud to use going forward into the future.
THIS IS JUST THE BEGINNING In New York we bring in legislation, implement it, and then evaluate it. I am personally hoping that mobile sports betting is up and running by the opening of the NFL season this fall, and then by January 2022 and the Super Bowl we can assess the event as a benchmark, and evaluate how mobile sports betting is doing in New York as a broader market. From this point, a global sports betting event, we will then be able to evaluate how things are going, how things have progressed and if we need to make changes, then start to make changes in order to create the best possible product for the state and the state’s players.
CONSUMER DEMAND Mobile sports betting is a very competitive market throughout the United States, and we in New York are playing a bit of catch up. This means that we have to have a very competitive product because we are asking New Yorkers to stop doing whatever they’re doing with the sports betting and then not 52 GAMINGAMERICA
In the budget language, we have made sure that we have set dates to move things along, such as the summer deadline for the RFP process. And we are looking forward to working with the Governor’s administration to make sure that this process keeps progressing, and realize the first mobile sports betting product for New York in good time. It has been a lot of work, and a lot of team work from a lot of different people. Luckily, I have been blessed with a great team that have worked incredibly hard over the last two years in trying to convince the state and the Governor’s office that this is a path we should go down. I am so eager to get started, I feel a great deal of optimism when looking at the product we’re going to bring to the people of New York, and the potential that it has. I said it when we signed off on the legislation: when the budget ends, our work begins, and it’s true. Now that we have passed the budget, the work really begins in making sure that we develop a successful, premier sports betting product for the people of New York.
ELYS GAME TECHNOLOGY
BY THE NUMBERS Tim Poole reviews Elys Game Technology’s financial performance for 2020, as the sports betting organization targets North America. Elys Game Technology Corp reported $37.3m in revenue for financial year 2020, year-on-year growth of 5% despite 2020 being a pandemic year. The results show the strength of Elys’ (formerly Newgioco) digital business, as retail operations would have either been closed or hit hard during Covid-19 shutdowns. When new CEO Matteo Monteverdi took the reins in late 2020, he spoke exclusively to Gaming America, again emphasising Elys’ digital growth. He also, however, targeted several new projects in the US, stating that he wants to replicate the company’s European model in North America. “I think we have the opportunity to significantly increase our financial performance by executing a few basic things very well,” he said. “The market is there, a need for newer solutions exists and Elys Game Technology is here to deliver.” Elsewhere on the horizon is the pending legalization of single-event sports wagering in Canada, with the potential of this market combining with the company’s financials to boost its share performance so far in 2021 (illustrated in the chart below). In Elys' financial report, Monteverdi commented: “Our multi-faceted approach allowed us to adapt to evolving market conditions and grow. The increase in revenue to $37.3m for the full year of 2020 reflects the strong growth in our 7
web-based gaming turnover, which increased 54% versus 2019. This increase was offset by a decline in our land-based gaming turnover, which has been impacted by the shutdown of betting shops in Italy due to the coronavirus pandemic.” Elys’ costs did rise by 16%, though, to $44.8m, which actually resulted in a loss from operations of $7.5m for the firm, whereas it lost $3m for 2019. Despite this, CFO Mark Korb said Elys continued to carefully manage expenses and have a solid balance sheet with over $18.9m of cash as of December 31, 2020. He explained: “We believe we are very well-positioned heading into 2021 to execute our vision of building a premier, end-to-end sports betting solution for European and US gaming operators.” Former CEO Michele Ciavarella, now Elys executive chairman, added: “These results reflect the success of our omni-channel approach, combining the best of both online and land-based retail betting with balanced product diversification, backed by our committed management teams. Elys not only achieved record revenue for 2020 but also broke through a major milestone by surpassing our half-billion dollar objective – reaching $575m in gaming turnover despite the challenges brought on by the pandemic.”
Elys Game Technology share price (US$)
6 5 4 3 2 1 0 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 *Data taken from the earliest available date of each respective month Elys’ share price has risen considerably since a low of $1.43 in November 2020, peaking at $6.62 in March 2021. Pandemic struggles kept the firm’s stock value below $3 through the whole of H2 2020. But a more stable Q1 2021 followed as Elys looks ahead to the rest of 2021 with encouragement. GAMINGAMERICA 53
CHRIS KAPE: SUCCESS IN THE US Chris Kape, JAMCO Capital founder and CEO, discusses the hot topics of in-play sports betting and micro-markets in the US. THE INFLUENCE OF IN-PLAY
The global pandemic may have irrevocably defined sport last year, but it has also been a period in which online sports betting was firmly established as a powerhouse in the US market. This year, 19 states, including New York and Texas, will vote on whether to legalise mobile sports betting, and around 8-10 of those markets are expected to open up before year-end. Furthermore, 80% of all US states are expected to have some form of legal sports betting product available within the next few years. In one month (December 2020) alone, New Jersey set the national sports betting record for the fifth consecutive month, generating an impressive US$996.3m. These are exciting times for the North American sports betting industry, and it’s little surprise that its most recent industry forecasts estimate it to be worth over $20bn within the next five years. In terms of revenue, this year has already gotten off to a flying start. In the first two months of 2021, income generated from sports betting in the US contributed $576m on total bets of $7.8bn, according to the American Gaming Association, up from $262m and $4.1bn respectively in the entire first quarter of last year. 54 GAMINGAMERICA
Undoubtedly, one of the biggest drivers of online sportsbook growth has been In-Play betting. Across the pond, in more established markets such as the UK, this vertical already accounts for 70-80% of the handle. Many predict that within the next three years this figure will be closely reflected in the US market for a few key reasons. As a product, In-Play betting is very attractive to operators because it expands revenue and handle above traditional offerings, simply through creating a seemingly infinite amount of betting opportunities for customers. Also, the natural ‘stop and start’ pace of America’s most popular sports including American Football and Basketball means that smaller betting opportunities such as ‘Next player to score a touchdown or a 3-pointer’ are easily created. A prime example of the rising popularity of this product can be seen with the recent acquisition of Banach Technology by PointsBet. This $43m deal was made for the specific purpose of enhancing their In-Play product capabilities. PointsBet believes that “the In-Play opportunity will be very significant and those with the best depth and breadth of product will win.”
THE EMERGENCE OF MICRO-MARKETS US Operators such as BettHouse believe that traditional sports betting is too complex for sports fans and lacks the instant gratification needed to engage a new, wider audience. The US population is estimated to have a little over 37 million sports bettors, but the number of estimated sports fans per Nielsen is over 150 million. This strongly suggests that there are over 112 million US sports fans being left on the sports betting table, waiting to be engaged. According to BettHouse, in order to achieve true sportsbook success, operators need a product offering that exists for both the everyday sports fans as well as traditional sports bettors. Furthermore, they believe this can be achieved through focusing on micro-wagers which allow fans and bettors to easily wager on every play, pitch, basket, shot, punch, and more. It’s no secret that in today’s society, content is a fast-moving commodity, constantly being produced and consumed on a never-ending conveyor belt of news and entertainment.
This societal trend has shaped the market landscape to the point where today, the player now expects instant gratification throughout their playing experience. As suggested by BettHouse above, the emerging trend of Micro-Markets is the perfect solution for this continuous shift towards fast, easy to consume entertainment. Micro-Markets are betting markets that are created and resulted in just minutes or seconds, and for US sports, are often coupled with the core engaging moments that drive consumption (e.g. pitches & at-bats for MLB, plays & drives for NFL). Especially since the lockdown, this has been a great way to give sports fans a continuous buzz throughout the games when they’re not physically able to be in the bleachers! This is a sentiment echoed throughout the industry, as we’ve recently seen an increasing number of market leaders heavily promoting these types of products. For example, when FanDuel partnered with B2B product development company SimpleBet on a free-to-play game during the 2020 NFL season, bettors had to predict the outcomes of teams’ drives. Industry commentators believe that it’s the increased trend of market models such as this that will cause, by the end of the decade, over 80% of US sports betting handles to be In-Play, and over 50% of In-Play betting handles are expected to be micro-betting.
THE ROLE OF TECHNOLOGY
pioneered by real-time streaming technologies. In the meantime, “core micros” like at-bats, drives, and player next attempts are less sensitive to broadcast latency and will be the most commercially viable user experiences for operators to offer. The latest and most attractive technologies are probably as familiar to the average consumer as they are to industry leaders, more specifically; Artificial Intelligence (AI), Blockchain and Internet of Things (IoT). When considering In-play and Micro Markets, Artificial Intelligence (or Machine Learning) probably offers the most value at this point. Its capacity for personalisation, strategic automation and responsible gambling makes it the ideal technology to push this sector forward.
“AS A PRODUCT, IN-PLAY BETTING IS VERY ATTRACTIVE TO OPERATORS BECAUSE IT EXPANDS REVENUE AND HANDLE ABOVE TRADITIONAL OFFERINGS, SIMPLY THROUGH CREATING A SEEMINGLY INFINITE AMOUNT OF BETTING OPPORTUNITIES FOR CUSTOMERS. ALSO, THE NATURAL ‘STOP AND START’ PACE OF AMERICA’S MOST POPULAR SPORTS INCLUDING AMERICAN FOOTBALL AND BASKETBALL MEANS THAT SMALLER BETTING OPPORTUNITIES SUCH AS ‘NEXT PLAYER TO SCORE A TOUCHDOWN OR A 3-POINTER’ ARE EASILY CREATED.”
Live sports betting products such as the aforementioned are heavily reliant on the quick turnaround of stats to support the bet-type, which some see as a potential drawback to this product. Data companies optimising the latest technology are the key to the growth and expansion of live betting opportunities. The subtle, more minute details about players, teams and the games themselves are difficult to gather. Ultimately, it is the quick and unwavering stats from data companies that help sportsbooks set odds, manage profit margins and determine pay-outs on an increasingly wide-ranging variety of betting events. The core user experience challenge is related to broadcast latency, typically 7-10 seconds for traditional cable and 20 seconds and above for OTT platforms. However, going forward this will be solved through tech solutions incorporating 5G networks
THE CASE FOR AI
The ever-changing nature of In-Play betting means that things can change unexpectedly. This is almost impossible for a human to assess, but machine learning applications can evaluate the data in real-time and adjust the odds in micro-seconds to reflect the ever-changing nature of sports contests. AI and machine learning algorithms are designed to scour through all the relevant, contextual data that could impact a particular match, such as the participating players, the weather, injury reports, sport betting stats, and trends, providing users with access to the latest reports within a fraction of a second. The algorithms also analyse records and results to predict the chances of a particular outcome and offer odds that fall in line with its findings. As a result, the odds and fixtures tend to be much more accurate when compared to any past modelling systems. AI can transform intelligence around customer journeys, enabling it to create the most relevant and engaging betting opportunities, while simultaneously sculpting a digital view of players so they can be better and more efficiently understood. Ultimately, producing instant and tangible impacts on key business metrics. At its purest, the US online sportsbook landscape is a technological battleground, especially within these live betting verticals, and it’s those operators that can deploy technology best - or identify superior suppliers or particular disruptive technologies - that will succeed. GAMINGAMERICA 55
TAKING AIM Elena Kvakova, head of US market at hosting service Internet Vikings, speaks with Peter Lynch about the intricacies of the American market and the need to adopt a strategy that aligns with a state-by-state approach.
What are the key points to consider when looking to enter the US market, or is even looking at it as one market incorrect? I’d say US market can be regarded as one when we talk about its complexity, or federal gambling laws. However, when it comes to entering it as an operator, it must be considered on a state-by-state basis because there are so many things to consider. When looking to enter these regional markets, operators must consider overall revenue in the market; what the trends are in terms of player spend;,what competitors already exist, and what prospects are there in the market going forward. Just due to how the US is as a country, there is a lot of power 56 GAMINGAMERICA
at state level, and in pure operational terms, that means that each must be approached individually and assessed as a potential growth market.
As seen in Michigan, players are quick to use online gaming. Why do you think this is? I think this happened in Michigan for two reasons. First, a world-class gaming service that is legal is a very attractive prospect for both players who engaged with a grey market, and also those that were hesitant before. It means that players don’t have to worry about the legitimacy of sites and operators. Second, I think that the events of the last year have also sped
things up. In-person gambling was made unavailable for many players, and also the course of the year has made us all a lot more comfortable with technology as a whole. That said, there have been great results, not just in Michigan, but also in new markets like West Virginia and Indiana.
Do you think all states will eventually go fully online with multiple operators? I think that the state-by-state approach is going to be there for at least the next three to five years. In terms of how some states approach to how to adopt gambling, I think that overall there will always be some hesitancy toward new things – it is just human nature to cautious. But I do think that the success of neighboring states, as well as time proving the idea will bring more states on board and will make it a more collective place. The progress is inevitable; it's just a matter of time.
The heavy regulation state by state can be seen as an obstaclle. But is this a sensible move? It sure is harder than not state-by-state approach for businesses, but it exists because of how the United States is, as a country. They decide on lot of big issues on a state level - like cannabis, gun controls and so on. But the ways they are doing it in individual states are good and sustainable for the long term. Companies undergo vigorous background checks, and there are compliance standards and responsible gambling mechanisms in place from the very start. And what we have seen so far as it’s become a huge market is that it proves it can be prosperous and competitive even in regulated setting. I don't think it's going to change in the next few years, even though many states like NJ and NH are leading that battle. What I do think might happen sooner is states will start to partner, and allow interstate gambling, but it’ll probably be a handful of states at best.
Ultimately, do you feel the amount of regulation in place at present will set the market on sure footing for future success? There is certainly a lot to consider when looking to enter the US market, and a lot that is different between regions and this can be time consuming. That said, what is being done now is that a lot of rigorous background checks are commonplace, technical standards are being set, and also there's a great deal of responsible gambling mechanisms put in place, so I would that the market is doing things in the right way, and that they are doing it in a very safe way. Hopefully with these in place there is room to grow going forward. This is what government in states like New Jersey and Pennsylvania are doing. Even though they have the most advanced legislation in terms of their application and regulation processes, they are seeing that the numbers are huge, and
that it is still a very prosperous industry even when abiding by these regulations.
Is experience in European gaming markets helping operators enter US markets? Absolutely. A lot of big name companies are hiring talent with European gambling background because where the US is right now is where Europe was five years ago. And even though, of course, the US market has its peculiarities, input from European firms can be invaluable in terms of experience and best practices. We have already seen how consumers respond to certain products like in-play, how markets progress, and also we have the experience of what are the best ways to go about it.
The regulatory requirements can be complex, and differ from state to state, is this where experts like Internet Vikings come into play? While we are not a law firm, we have months of in depth US gambling research under our belt, and a lot of it comes from our conversations with partners and good friends in the industry. Because the industry is new, a lot of this information and insight has had to be collected from hundreds of sources. And to be honest, where we are now is very different from where we imagined we would be six months ago. What we want to do now is help others and share this expertise. It will be really helpful for the individual companies but also market as a whole in terms of competition and quality of the product.
You mentioned that the company is looking to provide license hosting in the near future. What was behind this decision? Hosting has always being our strong suit and main product, and when we started looking into the US, it's what we wanted to do. As we were learning the ins and outs of gambling hosting regulation and market, we noticed a few things that could be done better. And to us, a Swedish company, nimbleness and customer focus is in the forefront of everything we do. And it is what we are trying to do to the key states right now: set up a secure, reliable, cost effective, fully-formed hosting solution so that the new providers that are coming to the US market could focus on other things. It will greatly benefit the market and we can’t wait to go live.
Do you think the US market will match or overtake Europe? Is it purely to do with population, or is there a particular urge from players for it? Honestly, I think yes it will. It's just a matter of time. We are seeing such a huge appetite, and that’s why it is the hottest market right now, everyone wants to be an early bird here. It may take three to five years, but I certainly believe it'll surpass the European market. GAMINGAMERICA 57
A FOOTNOTE NO LONGER FansUnite Entertainment CEO Scott Burton speaks about why promises of a big esports betting future are not just unjustified hype.
SCOTT BURTON At the moment, esports is merely a ripple in the overall sports betting community, but it is poised to become a tsunami. And this wave is coming a lot faster than you may think. The worldwide sports betting industry is expected to easily surpass $150bn in the next few years, with some analysts predicting a figure closer to $180bn as more North American jurisdictions legalise and expand sports betting. In the US, which is in the early stages of sports wagering, state after state continue to report record-breaking numbers every month. By contrast, esports betting is about a $1.8bn industry – barely a footnote when compared with these overall numbers. But it won’t be a footnote for long. Make no mistake, the esports slice of the overall sports betting pie is getting increasingly larger each year. Pinnacle, arguably the leader in esports markets, has already publicly stated esports is its fourth most-popular offering. By the end of this decade, many experts are predicting esports will account for 10% of a sportsbook’s turnover. It could be even more than that in some countries. Asian markets, which 58 GAMINGAMERICA
had the foresight to see this trend coming, will get there even quicker than North American and European markets. So it’s not unrealistic to think 10% will be the floor, not the ceiling. How big can the esports betting industry get? If it follows the trajectory of the esports marketplace in general – a reasonable presumption – it will be massive. Steve Bornstein, chairman of Activision Blizzard’s Esports Division and former CEO of ESPN and NFL Network, recently told Business Insider: “I believe esports will rival the biggest traditional sports leagues in terms of future opportunities, and between advertising, ticket sales, licensing, sponsorships and merchandising, there are tremendous growth areas for this nascent industry.” Esports is already eclipsing movies and music for entertainment dollars. There will be more eyes on esports events in 2021 than there will be viewers of every professional North American sports league, save for the NFL. Newzoo projects that esports-related content will have 250 million regular viewers and more than 300 million casual viewers this year. SafeBettingSites.com also projects that number will hit 650 million global viewers by the end of 2023. Twitch, which outpaces Facebook and YouTube for streaming esports, saw more than 1 trillion minutes watched on its platform in 2020. Marketers at mainstream companies salivate at those figures and the demographic dream that is the esports audience. Mostly constituted of 18- to 30-year-old males who are savvy with ecommerce and well-versed in rapid decision making, it’s a very attractive group to market to, yet one that is remarkably hard to connect with. You aren’t going to reach them through traditional TV, and targeted ads and banners might as well be background noise. Also, forget about radio, where brands will have nearly zero influence. Esports is the best direct line. It's worth noting that sponsorships are not limited to the Red Bulls, Mountain Dews and Cheetos-type of brands that one may presume to be popular among those playing and watching video games. Legacy brands like IBM, Nike, Honda, Mercedes Benz and Adidas are flocking to esports, aiming to get an early foothold in the market.Celebrities and athletes are also jumping to align their names with esports, aiming to beat the eventual rush to associate with top teams and gaming organizations. Mark Cuban, Ashton Kutcher, Drake, Steph Curry,
Jennifer Lopez, Tony Robbins and David Beckham have all thrown their proverbial hats into the esports ring. Michael Jordan even took a prominent place in a $26m funding round for aXiomatic, the group that owns Team Liquid, one of the most successful esports teams in the world. Brands and A-listers aren’t alone in foreseeing the potential marketplace. Cities across the globe are capitalising on the industry’s rapid expansion and building the necessary infrastructure to support its inevitable growth. Shanghai recently announced a new $900m, 1.5 million-square-foot sports event hub. Last year, Abu Dhabi’s Al Qana broke ground on what it claimed at the time would be the largest esports and virtual reality (VR) gaming complex in the world. New facilities for professional esports contests are popping up across the UK and the US, joining existing arenas all over Asia. Additionally, dozens of universities in multiple countries have announced plans to build facilities for their burgeoning esports programs. All of this is great news for those in the sports gaming space, as it translates to more attention, more events, more money and, most importantly, more potential customers for gaming operators. I feel quite confident saying if you replicated that survey in other countries, it would yield similar results. It’s only natural that as esports continues to gain traction, the pool of bettors interested in wagering on esports will increase. The yet unanswered question is: Where will they will be able to bet? Many regulators have been slow to move on esports because
of their lack of understanding about the industry in general and their warranted concern about match integrity. That’s why having a recognized body like the Esports Integrity Commission (ESIC) is so important. ESIC removes the burden from individual jurisdictions and increases the marketability and legitimacy of esports events. As for operators, many are still hesitant to get into esports as the ROI is a bit of an unknown. They are wary of spending big development dollars up front with no guarantees, and quite a few have voiced concern about lengthy timeframes to get up and running. They shouldn’t be. First, the bettors are there, not so patiently waiting for an operator to take their bets. The numbers and trends are unmistakable. Second, the upfront costs and timelines are much lower than operators assume. From what I’ve seen, operators are often surprised when they learn they can get a licensed esports book up and running quickly and affordably. It's important, however, that operators look for partners that are well-versed in esports – partners that really understand the ins and outs of the marketplace. In the end, the esports betting trajectory is like that of a rocket ship, and it’s gaining incredible momentum. Brands have to jump in now to have a shot at being seen as authentic in this space. The sooner they can do that, the more their message will resonate in the long term. After all, it’s not a matter of if competing operators will add esports to their menu of mainstream sports offerings. Based on current trends, it’s just a matter of when. GAMINGAMERICA 59
A DASH TO THE FINISH Linda Ellis' fast-paced non-fiction work Joe’s Dash tells the story of Joe Dorsey, a detective turned casino security director who stood witness to the dark side of gaming. Literature on casinos has grown expeditiously over the last quarter century since crime reporter Nicholas Pileggi published the landmark, Casino: Love and Honor in Las Vegas, the non-fiction basis of Martin Scorsese’s film of the same name. These books are often written by gaming executives or academics, and as great as they are, they tend leave behind voices of the people who actually work on the front lines of casinos. This makes the addition of Linda Ellis’ Joe’s Dash: The Million Dollar Drug Busts to Multi-Million Dollar Collections for Las Vegas Casinos all the more significant. Distributed by Las Vegas-based Huntington Press Publishing, Joe’s Dash tells the story of Joe Dorsey, former director of security at several of Sin City’s largest casinos. At slightly under 300 pages, the book is a page turner in the truest sense. Ellis shares Dorsey’s life using dozens of gripping anecdotes, beginning with his harsh upbringing in the projects of Cleveland, Ohio. Eager to escape poverty and a broken family, Dorsey signed up for the Navy in 1961 and was transported from the dreary Midwest to sun-soaked San Diego. There he soon joined the Coast Guard and later, local law enforcement. Dorsey saw death and destruction up close, from Mexican border drug cases gone wrong to maritime disasters. During this time, he also established key relationships with police and intelligence officers domestically and abroad, which would be invaluable to his later gaming career. In 1980 Dorsey was working with a Nevada Gaming Control Board agent on a gaming license application investigation when he received the offer that would change his life: trade in his handgun for an American Express credit card and join the NGCB as a background investigator. Dorsey’s wife Karen, an aspiring singer with gigs lined up at MGM Grand, was just as supportive of the couple’s move to Las Vegas. Ellis’ narration picks up steam as Dorsey recounts traveling across the world to dig up dirt on gaming and casino applicants. He and his partners in the GCB’s Investigations Division would spend months of the year on the road fulfilling background checks, occasionally coming in contact with organized crime units in countries as distant as Australia 60 GAMINGAMERICA
and Italy. The life of a GCB agent in the 1980s was stimulating if not luxurious. Working under a seemingly extensive budget, agents were given first-class air travel, Marriott tier hotel stays and large meal per-diems. The hard work was in the details. Once assigned a subject, Dorsey would meet with his supervisor, address the range of his investigation and then take off for weeks at a time. He used his Rolodex of law-enforcement contacts to forge quick connections in the applicant’s city. Once there, Dorsey would make appointments, produce records searches, and in one instance, even look into the safety-deposit box belonging to the applicant. GCB were given extraordinary purview; applicants had no automatic right to an attorney during an interview and were all but forced to cooperate, lest see their case delayed for several more months. Agents would present their findings to the office of the District Attorney and then meet with GCB members before applications were considered on the next public meeting’s agenda. Agents wouldn’t know whether the information
“THE LIFE OF A GCB AGENT IN THE 1980S WAS STIMULATING IF NOT LUXURIOUS. THE HARD WORK WAS IN THE DETAILS.” they dug up would lead to an approved or denied license until the GCB made up its mind at those meetings. Dorsey was five years into his GCB when he was approached by the Hilton Corporation to serve as director of security at the Las Vegas Hilton (today the Westgate), then the largest hotel in the world. He spent the next several years with Hilton, moving from investigating potential gaming operators to protecting one of Las Vegas’ marquee resorts. Dorsey’s police and regulatory background trained him for nearly everything he’d encounter on the job, up until he was tasked with securing an 18,000-person outdoor crowd for a Mike Tyson fight. The stakes were enormous. Fight weekends could generate more revenue than New Year’s Eve, but this one in April 1986 was in jeopardy for reasons out of Hilton’s control. That month President Ronald Reagan had ordered an attack on
Libyan terrorist centers, and there was fear Libya would strike back with a terrorist attack in Las Vegas. Working with little support from the federal level, Dorsey ordered armed security officers to roam the rooftops of surrounding buildings without alerting the thousands of guests in attendance. The prize fight went off without a hitch, and Tyson would be back competing at the Hilton several more times during Dorsey’s tenure. Dorsey spent the next several years hopping around Las Vegas, from the Aladdin to Golden Nugget to Tropicana, which was under a severe lack of house control. “Essentially the inmates were running the asylum. Put another way, a ‘we’re-family’ attitude had been taken to extremes. Even as late as the nineties, the Mob had gone home – or to prison, or the cemetery – but the employees hadn’t gotten the memo.” Dorsey also colorfully recounts interviewing a cashier who admitted to stealing $400 to $500 per shift for 11 years, or close to a million dollars. He eventually got the Tropicana’s culture in check, but life on the Strip came at a cost to his health. Dorsey retired at 71 and has since survived heart surgery and prostate cancer. Thankfully he’s lived long enough to retell his casino journey to the world.
MAKING A SPLASH Gaming America unravels a broad range of the most exciting products now out on the market, just in time for summer to sizzle.
ECLIPSE GAMING: KITTY CAT CASH According to Eclipse Gaming, the purr-fect game has arrived. Kitty Cat Cash combines a 3-4-5-4-3 reel configuration with graphics that are designed to appeal to everyone’s inner cat lover. Players are teased with 720 ways to win and three enticing, progressive jackpots. When three, four or five Cat Eye symbols land on the reels, players collect five, seven or 10 free spins. If additional combinations land, the sum of the spins for all combinations are awarded. Players also are given an opportunity to collect a Retrigger Bonus for a chance to extend their free spin experience. Three, four or five Jackpot symbols award the minor, major and grand jackpots, respectively, adding even more excitement to the playful Kitty Cat Cash. Eclipse Gaming says it is deeply committed to the Tribal gaming market. The company creates games with a purpose: to generate powerful results that benefit their partners and directly impact the needs and objectives of their partners’ communities. They achieve this by developing products that deliver outstanding performance through deeper player engagement and memorable gaming experiences.
CYREBRO SOC: BMM BIG CYBER The cyber threat landscape is evolving rapidly, and protecting against potential cyberattacks requires rapid monitoring and response. The longer a cybersecurity incident goes before it is remediated, the greater the potential damage and expense to the organization. Addressing these threats is the responsibility of an organization’s Security Operations Center (SOC). The SOC should provide round-the-clock monitoring for cyber threats and the ability to engage immediately an incident response. Positioned as a managed service offering, BMM Big Cyber’s Cyrebro SOC provides organizations with a team of outstanding international cybersecurity experts dedicated to monitoring, detecting and investigating threats across an organization’s 62 GAMINGAMERICA
entire IT infrastructure. BMM Big Cyber’s Cyrebro SOC offers monitoring without requiring organizations to make a significant investment in security software, hardware and other infrastructure. Instead, organizations can rapidly gain access to SOC services and ensure monitoring for cyberthreats, cost-effectively improving the organization’s security posture. With BMM Big Cyber’s Cyrebro SOC, organizations rest assured knowing the entirety of their network environment is under constant watch for new cyberthreats by some of the best cybersecurity experts worldwide.
GLOBAL PAYMENTS GAMING SOLUTIONS: VIP MOBILITY
The modern casino patron is a digital-first consumer at heart. Global Payments Gaming Solutions says its VIP Mobility solution is the first and only of its kind to bring a modern and digital approach to gaming.
TABLE TRAC, INC.: KIOSKTRAC MOBILE KioskTrac Mobile is a one-of-a-kind, fully customized mobile rewards application that leverages the convenience of the player rewards kiosk with the power of touchless transactions on players’ smartphones. It utilizes Table Trac’s patented digital currency transfer solution to bring full cashless functionality throughout the property. Promotional and cash credits move seamlessly from each player’s account to slot machines, table games, restaurants and any other point of sale using the digital player card. KioskTrac Mobile is seamlessly integrated with the CasinoTrac Reflexive Rewards offers and KioskTrac promotions, delivering a rich player experience that is consistent across all player touchpoints. Players may view their direct mail offers and upcoming promotions and events happening at the casino, saving on expensive monthly mailers. Promotional and cash credits are securely transferred to slot machines with the swipe of a finger. This allows patrons to play promotional games or claim offers without ever having to leave their favorite slot machine. 64 GAMINGAMERICA
By harnessing the convenience, flexibility and ease of Global Payments’ VIP Preferred account network, plus functions such as eCheck and Choice 4 deferred settlement, today’s guests can transfer funds directly from their VIP Preferred balance to their favorite game with the touch of a screen. Not only does VIP Mobility operate within the casino’s existing technology structure, it also drives a more cost-effective, secure payment method within gaming floors. Casinos offering VIP Mobility benefit from the solution’s low impact on support staff and operations, while ensuring no major changes to casinos’ existing audit procedures. The solution enables guests to create digital TITO tickets on their mobile device by scanning an existing voucher or using their VIP Preferred e-check account. Patrons then can pair their mobile device to any slot or table game by scanning a QR code. They can reload from their phone and retrieve funds once they are finished playing, allowing them to enjoy the freedom of digital ticketing and uninterrupted cashless play. VIP Mobility surpasses traditional forms of wagering and betting by providing a seamless player experience from funding through cash-out. With VIP Mobility, casinos are enabled to connect to existing responsible gaming systems while equipping patrons with the technology to better track, manage and control expenditures. VIP Mobility enables casinos to deliver a true cashless experience to patrons.
KONAMI GAMING, INC.: OCEAN SPIN This original linked progressive slot series showcases synchronized animation effects, spanning into its LED signage and digital toppers, and across multiple game cabinets. During attract mode, all cabinets become enveloped in an underwater seascape of fluorescent coral reefs, butterfly fish and a mermaid. At the top of each game screen, animated bubbles float seamlessly across every connected machine, filled with potential bonus opportunities. Whenever any three or more clam symbols are collected, the Ocean Spin feature is awarded, and the player is invited to spin the animated bonus prize bubbles that float horizontally across all screens. Once the player swipes the screen to spin, prize bubbles whiz across the entire bank or pod, until the spinner lands on a credit award, free games or instant progressive jackpot. The series also includes a symbol-trigger wheel spin bonus. Collected coin symbols that trigger the wheel spin bonus display random credit prizes, which upgrade the available wheel spin prizes for rewarding win experiences. Konami’s Ocean Spin is launching at initial locations in North America with two original base games: Ocean Spin Kingdoms Treasures and Ocean Spin Pirate’s Riches. Each offers a unique free game bonus. Kingdoms Treasures only requires two clam symbols to win additional free games during the free game feature, while Pirate’s Riches adds additional trigger symbols during the free
, KONAMI GAMING, INC
games for increased odds for the wheel spin bonus. Ocean Spin provides multi-denomination options, ranging from one-cent to five dollars. The ocean-themed slot series features LED signage and a 49-inch curved screen delivery on the premium Dimension 49J.
BLUBERI: B49 CABINET Gems of Egypt King of the Valley and Gems of Egypt Queen of Alexandria. This royal couple will beckon players with their vast fortunes, just waiting to be won. Slot machine enthusiasts will find a variety of features, ranging from bonus spins to special winning symbols. During free spins, players will be prompted to pick scarab symbols to discover the Queen’s precious gemstones and aim to win one or even more of the five jackpots. During the regular game, players have a chance to see up to nine mystery wild symbols come out of nowhere and land on the center reels, generating out-of-this-world wins. Housed in the attractive and ergonomic b49 cabinet, these games will be a welcome addition to any casino floor.
INCREDIBLE TECHNOLOGIES: ULTRA RUSH Incredible Technologies has introduced new features on a 4K display for its popular game family Ultra Rush. Ultra Rush Gold: Tiger Run and Mythical Phoenix bring the game mechanics players love with the addition of persistent features such as progressives at any bet, player selectable multi-denom, free spins and a Lock and Spin bonus. Ultra Rush Gold retains the same Lock and Spin mechanic – six or more scatters must land on the reelset to trigger the Ultra Rush bonus. But Gold scatters change the game. They're persistent and lock on the reels for three Gold Spins, granting players more chances to accumulate the six scatters needed to initiate a bonus. Should another gold scatter land while the Gold Spins are initiated, the spin count is reset back to three. Both gold credit and wheel scatters initiate Gold Spins and the lucky Tiger or Phoenix just may randomly grant additional Gold Spins. Once six scatters land, the Ultra Rush bonus is initiated. Players are given an initial three spins to collect scatters on a reelset of all credit awards and wheel scatters. Once a scatter lands, the spin count is reset back to three. Players who fill the grid are awarded a credit bonus based on their bet level. Progressive and jackpot awards are won within the wheel. Each wheel scatter that locks during the Ultra Rush bonus grants players one spin for progressives and jackpots. Multiple wheel scatters award multiple wheel spins. Ultra Rush Gold is available on both Infinity V55 and Summit cabinets.
LOCK TRUST: CASHLESS SOLUTIONS As the world moves to a global market, risk is at its peak for fraudulent sites, undeliverable products and crimes at cash businesses. Chargebacks are at the highest they have ever been, causing losses across the board. FinTech solutions provider Lock Trust solves those problems with a global footprint and secure transactions to assure money is safe and products are delivered. With Lock Trust, businesses do not sustain losses through theft, assault and the resulting canceled insurance. With its advanced technologies, Lock Trust has the ability to take the gaming industry completely cashless, including loading of slot machines and chip purchasing at the table, with or without terminals at the table. The Lock Trust system offers cashless payouts, stopping the problems of spotters, theft, robbery and more. Lock Trust also has patents pending in automated tax collection and global escrow., which offers a business and
banking framework that gives both large and small banks, businesses, casinos and consumers the ability to move money and transact locally or globally with security and compliance.