Global Gaming Business, February 2019

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GGB Global Gaming Business Magazine

February 2019 • Vol. 18 • No. 2 • $10

Blackjack

Bonanza

Without millennials, can the game survive?

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British Blast Evaluating the new UK regulations

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CONTENTS

Vol. 18 • No. 2

february

Global Gaming Business Magazine

COLUMNS

18 COVER STORY

Blackjack at the Crossroads

AGA 10 Opening the Door Casey Clark

Side bets and progressives have made the industry’s most popular game more profitable for casinos, but it remains to be seen whether blackjack will be embraced by the next generation of players.

Fantini’s Finance 12 Close to Home Frank Fantini

Making My Point 32 Turtle vs. Hare Roger Snow

DEPARTMENTS

By Nicole Schultz

4

The Agenda

FEATURES

6

By the Numbers

14 Data and the Sports Book

8

5 Questions

Instant access to data will be a key to the growing market for sports books, and in particular in-play wagering, which may justify some fees to the leagues.

13 AGEM

By Steve Gallaway and Brendan Bussmann

22 Fixed-Odds Blowup The British betting industry is faced with a crisis after passage of a law limiting wagers on fixed-odds betting terminals that many fear will cripple the industry.

By Steve Donoughue

42 Emerging Leaders With NIGA’s Gena Caviness, Akerman LLP’s Tamara Malvin, and Maryland Live!’s Jennifer Kearns

34 Tracking the Tables

44 Frankly Speaking

Profitability for operators of table games inceasingly means the right technological tools to track play and manage the pit.

46 New Game Review 47 Goods & Services 49 People 50 Casino Communications With Tony Rodio, Chief Executive Officer, Affinity Gaming

By Dave Bontempo

38 26 Sports Betting and the Tribes With physical sports books expected to be limited to the largest tribal casinos, small profit margins and uncertainty concerning mobile and online betting will limit the activity for most tribes.

By Dave Palermo

Opportunity in iGaming The rapid spread of sports wagering in the U.S. could lead to a corresponding rapid rise of regulated online gaming and mobile wagering.

By Roger Gros

FEBRUARY 2019 www.ggbmagazine.com

3

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THE AGENDA

Vol. 18 • No. 2 • FEBRUARY 2019

The Bypass Roger Gros, Publisher

I

ronically, the story of a bypass around my little town is a powerful analogy for today’s casino industry. Ironic because my town, Boulder City, is one of only two towns in Nevada that prohibits gambling within its borders.

Las Vegas and Phoenix, Arizona are the two largest cities in the U.S. not connected by an interstate highway. To get to Phoenix, drivers had to navigate through little Boulder City. On weekends and holidays, the roads were jammed heading to the bridge to Arizona. (It used to be Hoover Dam until they built the Mike O’Callaghan/Pat Tillman Bridge over the Colorado River). Residents knew to avoid the main highway through town on those days.

Congress passed a law creating I-11 that will stretch eventually from Phoenix to Reno, Nevada.

But the first step was to build a bypass around Boulder City. There were lots of consultations with Boulder City officials and residents, but eventually it was decided to swing it far out in the desert several miles south of town.

It opened last summer, and for us residents it has been a godsend. Traffic virtually disappeared overnight, making it easy to enjoy what our town offers no matter the date or time. It’s been harder on businesses, however. Those fast-food outlets that depended upon thousands of cars driving by each day are suffering. Already Burger King has closed, and who knows how long the others will last?

There are plenty of stories about little towns whose downtowns dried up when a bypass opened directing traffic away from those areas. Job losses, home foreclosures and many other dire circumstances followed.

That won’t happen in Boulder City. As a bedroom community to Las Vegas (and nearby Henderson), Boulder City has a bright future. It will be a little more challenging, but residents and officials are working hard to develop attractions and events that will keep the city vibrant.

So how does this relate to the casino industry?

Well, there has been a bypass—several bypasses in some cases—built around land-based casinos over the past decade. And the industry’s response will determine whether casinos become like those dusty abandoned downtowns or remain vital as Boulder City hopes to do.

Let’s consider online gaming. Players in certain

4

Global Gaming Business FEBRUARY 2019

states no longer have to travel to their favorite casino. Their preferred games are now as close as their computer or device. They can play on the couch in their pajamas instead of getting dressed and driving to a casino. And in many cases, the games and odds are better online than in person.

Since there are only four states where online gaming is legal at this point, most casinos don’t see this as an immediate threat. But it won’t be long. Mobile sports betting is already legal in many more states than iGaming. Once bettors get accustomed to betting on their devices or their computers, how much longer will it be until they are deferring trips to the casino and opting to play online?

Yes, we’ve heard the argument that the Atlantic City casinos are deriving first-time landbased players from the internet. Truth be told, however, most Atlantic City casinos do a very poor job marketing their brick-and-mortar properties to their online players.

American casinos seem to be missing the lesson that European casinos learned years ago.

Online gaming has the potential to devastate your market, and unless you are proactive in marketing your land-based and online offerings hand-in-hand, you’re courting disaster.

But maybe your “bypass” is increased competition not only from online gaming but also from new and newly renovated casinos in your area.

How you respond to that challenge is also very crucial.

In California, there’s an arms race of casino improvements as each tribal casino tries to oneup the competitors with amazing amenities and added gaming. But if you go too far, what’s the return on investment? And are there enough customers to go around?

In the northeastern U.S., competition is fierce.

Where once Atlantic City was the only gaming option, there are now dozens of casinos spread from Maryland to Massachusetts. And many of them are modern five-star casino resorts, spreading the market for players at that level very thin.

So if you don’t want your casino to dry up and blow away, you’d better have a strategy to defend your turn no matter how many bypasses direct customers away.

Roger Gros, Publisher | rgros@ggbmagazine.com twitter: @GlobalGamingBiz Frank Legato, Editor | flegato@ggbmagazine.com twitter: @FranklySpeakn Monica Cooley, Art Director | mcooley@ggbmagazine.com Lauren Byrge, Director, Sales & Marketing LaurenB@GGBmagazine.com Floyd Sembler, Business Development Manager fsembler@ggbmagazine.com Becky Kingman-Gros, Chief Operating Officer bkingros@ggbmagazine.com Lisa Johnson, Communications Advisor lisa@lisajohnsoncommunications.com twitter: @LisaJohnsonPR Columnists Casey Clark | Frank Fantini | Roger Snow Contributing Editors Dave Bontempo twitter: @bontempomedia Brendan Bussman | Marie Casias Steve Donoughue | Steve Gallaway | Allison McCoy Dave Palermo twitter: @DavePalermo4 Nicole Schultz | Michael Soll

EDITORIAL ADVISORY BOARD Rino Armeni, President, Armeni Enterprises

•

Mark A. Birtha, Senior Vice President & General Manager, Hard Rock International

• Julie Brinkerhoff-Jacobs, President, Lifescapes International

• Nicholas Casiello Jr., Shareholder, Fox Rothschild

• Jeffrey Compton, Publisher, CDC E-Reports twitter: @CDCNewswire

• Dean Macomber, President, Macomber International, Inc.

• Stephen Martino, Vice President & Chief Compliance Officer, MGM Resorts International, twitter: @stephenmartino

• Jim Rafferty, President, Rafferty & Associates

• Thomas Reilly, Vice President Systems Sales, Scientific Games

• Steven M. Rittvo, Chairman Emeritus, The Innovation Group twitter: @InnovGrp

• Katherine Spilde, Executive Director, Sycuan Gaming Institute, San Diego State University, twitter: @kspilde

• Ernie Stevens, Jr., Chairman, National Indian Gaming Association twitter: @NIGA1985

• Roy Student, President, Applied Management Strategies

• David D. Waddell, Partner Regulatory Management Counselors PC Casino Connection International LLC. 901 American Pacific Drive, Suite 180 • Henderson, Nevada 89014 702-248-1565 • 702-248-1567 (fax) www.ggbmagazine.com The views and opinions expressed by the writers and columnists of GLOBAL GAMING BUSINESS are not necessarily the views of the publisher or editor.

Copyright 2018 Global Gaming Business LLC. Henderson, Nevada 89014 GLOBAL GAMING BUSINESS is published monthly by Casino Connection International, LLC. Printed in Nevada, USA. Postmaster: Send Change of Address forms to: 901 American Pacific Dr, Suite 180, Henderson, NV 89014

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BY THE

NUMBERS

MakinG it BEttEr E

xisting methods to treat problem gambling have been ineffective, so Sally Gainsbury (r.), one of the world’s leading researchers in the gambling field, decided to examine what could work better.

Last month, Gainsbury released her latest research paper, titled “Behavioral Economics And Gambling: A New Paradigm For Approaching Harm-Minimization.”

In the paper, Gainsbury and two colleagues, Juliette Tobias-Webb and Robert Slonim, identified five steps that could lead to a reduction in problem gambling. The study was funded by the University of Sydney and the Commonwealth Bank Australia.

To obtain a copy of the paper examining each step, visit liebertpub.com/doi/10.1089/glr2.2018.22106.

When Losses Feel Like Wins

a

study published by Canada’s University of Waterloo by Candice Graydon, Madison Stange and Mike J. Dixon in December shed some light on why players enjoy certain machines and the impact of losses disguised as wins (LDW), which is defined as players winning less than they wager (e.g., bet $2, win back 50 cents), the net loss disguised by flashing graphics and winning sounds. In the study, 32 undergraduate students with experience playing slot machines played 100 spins on four games. Two had positive payback percentages (115 percent) and two had negative payback percentages (85 percent) after 100 spins. Two games had no LDWs and two had a moderate amount of LDWs. Students were then allowed to continue play, and most of them chose the high-payback machine with LDWs. To obtain a copy of the study, visit uwaterloo.ca/gambling-research-lab/publications.

6

Global Gaming Business FEBRUARY 2019

From a behavioral economics perspective, the development, implementation and evaluation of a gambling harm-minimization approach should: 1. Identify and measure the specific target behavior(s), population(s), and signs of harm.

2. Consider the context or structure of the decision-making environment to identify inaccurate beliefs (biases) or behavioral barriers preventing a desired behavior.

3. Design a choice environment that equips people with the right tools to follow through with, and adhere to, a desired behavior.

4. Preserve autonomy and empower individuals through freedom of choice.

5. Incorporate evaluation into the implementation process, ideally via a randomized controlled trial.

LDWs and Game Selection

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NUTSHELL

“They

5QuestIons

Brooks Pierce

President and COO, Inspired Entertainment

I

nspired Entertainment was formed in London in 2002 as a mobile entertainment technology provider. Over the ensuing decade, it specialized in server-based gaming and became a pioneer in virtual sports betting. In 2016, it was acquired by Hydra. Lorne Weil, the former chairman of Scientific Games, was appointed chairman, and Brooks Pierce was named president and COO. With vast experience with gaming suppliers, Pierce has been able to raise the visibility of Inspired in the gaming industry and expand the reach of the company to include iGaming, lotteries and more. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October. To hear a full podcast of this interview, visit GGBMagazine.com.

GGB: What drew you to Inspired Gaming?

Pierce: A couple of things. First, in my past, I had looked at the company and saw the technology and

1 2 3 4 5

products and thought it was really interesting. And then when Lorne Weil, who I had worked with for 24 years building Scientific Games, became chairman of Inspired, it was an attractive opportunity.

I knew they had a very well developed business in Europe, but virtually no business in North America. I thought it was a great complement to my skill set and background since I had spent the majority of my career in North America. And quite frankly, starting from a zero baseline in the world’s largest gaming market is always attractive.

How does virtual sports betting work? Is it RNG-based?

Yes, that’s exactly what it is—like a ball drop in keno or a slot machine. But the outcome is displayed in high-tech, ultra-realistic fashion. So what would essentially be shown as a reel spin on a slot machine is displayed as a sporting event—horse racing, football, auto racing. It’s a slot machine pull but highly entertaining at the same time.

How do you work with all segments of the gaming industry—casinos, sports books, iGaming, lottery?

It’s great because our content is ubiquitous. So it’s not only the geographic disbursement of the business but also in all the different segments. Our customers can be as diverse as William Hill and the Pennsylvania Lottery. So every prospect out there is a potential customer for us.

How do you work with lotteries?

In Pennsylvania, we have a deal with Scientific Games, which is the central system for the state lottery. If you go into a bar or a restaurant, there will be three screens. We have two for our football and car race games, and Sci Games has the third for their keno game.

But the lottery is an important vertical for us. In Greece, we have the best-performing slot machines, as well as 100 percent of the market in virtual sports.

Doesn’t the legalization of sports betting make virtual sports betting less popular?

No, quite the contrary, actually. It’s a very complementary product. In every market around the world, our product is offered wherever sports betting occurs. Typically, what we see is that virtual sports are about 15 percent to 20 percent of what’s bet overall. And from the operators’ perspective, it’s (viable) product at all times because this is simulated and not on a schedule. If a player is betting a live football game or soccer match, it’s something they can play while awaiting the outcome of the live games. And while the hold on live sports betting is something around 5 percent, the hold on virtual sports betting is significantly higher than that. So it’s really complementary, not competitive.

8

Global Gaming Business FEBRUARY 2019

Said It”

“All of you policemen there, get out. It’s crawling with usurers, kidnappers. If I pass there and I see you, I will run over you.”

—Rodrigo Duterte, the always quotable Philippine president, reiterating that law enforcement officers are banned from the country’s casinos

CALENDAR February 4-7: Western Indian Gaming Conference, Harrah’s Southern California, Valley Center, California. Produced by the California Nations Indian Gaming Association. For more information, visit WIGS.CNIGA.com.

February 5-7: ICE Totally Gaming, ExCeL Centre, London. Produced by Clarion Gaming.

For more information, visit ICELondon.uk.com.

February 6-9: London Affiliate Conference 2019, ExCeL Centre, London. Produced by IGB. For more information, visit igbaffiliate.com/events/london-affiliateconference.

February 21: UNLV Gaming & Hospitality Education Series—The Road to 2020: Critical Time for Las Vegas and Gaming, Stan Fulton Building, University of Nevada, Las Vegas.

Produced by GGB Magazine and UNLV William F. Harrah College of Hospitality. For more information, visit UNLVGHES.com.

February 26-27: Strategic Platform for iGaming Conference and Exhibition (SPICE) India, Goa, India. Produced by Eventus International. For more information, visit sportsbettingevents.com.

March 3-6: World Game Protection Conference, Tropicana Las Vegas. Produced by World Game Protection, Inc. For more information, visit WorldGameProtection.com.

March 21: UNLV Gaming & Hospitality Education Series—Operators vs. Manufacturers: Making Peace. UNLV’s Stan Fulton Building, Las Vegas. Produced by GGB Magazine and UNLV William F. Harrah College of Hospitality.

For more information, visit UNLVGHES.com.

April 1-4: Indian Gaming 2019, San Diego Convention Center. Produced by the National Indian Gaming Association. For more information, visit IndianGaming.org/events.

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AMERICAN GAMING ASSOCIATION

Opening the Door The legalization of sports betting created enormous economic potential

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Global Gaming Business FEBRUARY 2019

t’s impossible to talk about the year ahead without acknowledging the momentous progress legal sports betting made in 2018.

This time last year, single-game sports betting was legal only in Nevada, despite the presence of casino gaming in 40 states across the U.S. When the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) last May, it didn’t just unlock new economic potential for the rest of the country—it opened the door for safe, regulated alternatives to a vast and thriving illegal sports betting market.

For a long time, the American public wanted to end the federal ban on sports betting, with a majority approving of legalized sports betting as far back as September 2017.

Since then, the sentiment has only grown.

AGA’s recent research measuring Americans’ current attitudes on sports betting found that the overwhelming majority (63 percent) of Americans support the Supreme Court’s ruling striking down the federal ban.

Further, nearly two-thirds (66 percent) of

By Casey Clark

those surveyed believe that regulation and oversight of gaming should be left to state and sovereign tribal governments. These sentiments are telling, given the rapid spread of legal, regulated sports betting across the United States since May. Since PASPA was overturned last year, onefifth of the states have authorized sports betting, with states and sovereign tribal nations taking action to meet the demands of their residents to set up safe, legal, regulated sports betting markets. By the end of 2019, it is possible that more than half of states will have passed or considered sports betting legislation.

As state legislatures consider bills to legalize and regulate sports betting within their jurisdictions, AGA will continue to serve as an active voice, advocating for policies that establish reasonable tax levels, protect the consumer, enhance the integrity of competitions and wagers and enable the legal market to thrive.

Casino Clark is vice president of strategic communications for the American Gaming Association.

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FANTINI’S FINANCE

Close to Home A big drop in the price of regional casino stocks makes them attractive to investors

R

By Frank Fantini

egional casino stocks might be the place for equity investors to be in 2019.

The group sold off a stunning 37 percent last year despite strong business trends, acquisitions that promised to add to earnings and management teams focused on continuing to improve operating margins.

The results are stocks stuck in cheap valuation ranges around seven and eight times EBITDA in a business environment that calls for higher prices and in a world where real estate investment trusts are buying casinos at 10 times and higher.

Now, there is no predicting the future. A recession could turn the rosy fundamentals south. A company can make bad decisions.

But what is seen and known spells out one word: opportunity.

As of this writing, regional stocks are rebounding nicely. In part that is because investors are seeing that the sell-off created prices disconnected from the strength and prospects of the underlying businesses.

It also has helped that some equity analysts have been pounding the table on regional casino operators.

Carlo Santarelli of Deutsche Bank is one of the regional bulls. He published a research note pointing out their strengths, and two interesting facts: 1) Regional casino stocks have never dropped two years in a row, and 2) Their stock prices have always correlated with consumer confidence, which is running at the highest levels since 2000.

Santarelli also noted, as I mentioned above, that the low valuations might make casinos attractive targets for REIT acquisitions, thus giving investors the opportunity to buy low and sell high.

Another analyst who has issued a strong call on regional casino operators is Chad Beynon of Macquarie.

Beynon, among other things, cited strong cash flows, defensive nature in the stocks, and lack of exposure to China that has worried in-

vestors of other stocks and sectors. This is an ideal time to invest in regional operators, he said.

It also is worth noting that several regional companies enjoy some of the fastest-growing markets in the country.

Red Rock Resorts and Golden Entertainment are highly concentrated in Las Vegas, the nation’s fastest-growing metro. Monarch Casino is in Reno and greater Denver, two other fast-growing metros.

Eldorado, likewise, has considerable exposure to Reno and Denver. Boyd has big stakes in the Las Vegas locals market and Downtown Las Vegas.

Each company also has its unique growth story.

Monarch is transforming its Black Hawk, Colorado, casino into a destination-quality resort. Red Rock is making big investments in the Palms and Palace Station.

Penn National, Eldorado and Boyd also have been buying gaming operations in collaboration with the REITs, giving them both more revenues and opportunities to raise profitability by reducing costs.

Golden likewise has been a buyer, but with the

Golden Entertainment has “ transformed through acquisition from around $45 million in EBITDA to what in several years should be $250 million, all with few new shares being issued.

12

”

added benefit of also buying the real estate, giving it appreciating assets, and without having to pay rent to REIT property owners.

It also is sometimes worth paying attention to what really smart people do. Mario Gabelli, for example, has become a major shareholder in Full House Resorts, owning 8.54 percent of the company.

As small as Full House is—market cap just under $60 million—Gabelli’s investment is pocket change for him. But it illustrates that one of the most successful stock investors of our times sees enough value that he’s willing to invest in a micro cap.

Santarelli and Beynon have target prices generally 25 percent to 35 percent above the stock prices

Global Gaming Business FEBRUARY 2019

when they issued their early January reports.

But one company offers much greater returns—Golden Entertainment. Santarelli has a $38 target on Golden and Beynon $34. The stock is around $17.70 as this column is being written, making it a double if they are right.

Readers of this space know we are fans of Golden and can see it at $40 and higher over time if the company is right about its growth strategies, executes on them and gets a proper valuation.

The company has transformed through acquisition from around $45 million in EBITDA to what in several years should be $250 million, all with few new shares being issued.

The great majority of that business is in Las Vegas, where Golden owns the Stratosphere, two locals casinos and a growing network of highly profitable taverns, and in Laughlin, Nevada, 90 miles south of Las Vegas, where it will have three properties that control around 40 percent of the $500 million gaming revenue market.

That is a lot of exposure to the fastest-growing metro in the country, and a lot of potential if Golden succeeds in fulfilling the Stratosphere’s potential and making Laughlin a getaway for the 2.2 million residents of the Las Vegas Valley.

Finally, when considering regional casinos, one has to look at the three gaming REITs—Gaming & Leisure Properties, VICI Properties and MGM Growth Properties.

If regional casino companies succeed, the REITs succeed. If regional casino valuations don’t rise, REITs can step in and buy the properties at prices attractive to owners.

And with each purchase, the REITs add to their rental income, boosting profitability and stock prices. In other words, they combine reliable recurring revenues with growth opportunities.

Investors also get cash every three months in the form of dividends. Consider their dividend yields: GLPI 8.25 percent, VICI 6.2 percent, MGP 6.7 percent. Combined with their growth prospects, that’s a lot of potential total return.

Frank Fantini is the editor and publisher of Fantini’s Gaming Report. For a free 30-day trial subscription email subscriptions@fantiniresearch.com.

p. 13 AGEM:Layout 1 1/10/19 12:14 PM Page 13

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In 2019, Win Systems will keep strengthening its global solutions range both in the Systems and Gaming divisions. The new solutions for WIGOS will include renewed and improved versions of its player tracking and system jackpot.

Gold Club electronic will see a breakthrough innovation that will shape the future of the brand, and new jackpots, exciting games and new gaming machines will be launched under GameStar.

WIGOS has been recently selected among the most well-known options in the market to supply its casino management system to one of the largest gaming tribes in the U.S., as a part of an expansion in this market that will also include new offices in Miami.

The headquarters in Europe will be also remodeled, to meet the growing needs of the company. In 2018, WIGOS has increased over 15 percent in connected playing positions in casinos of all sizes, and is certain to keep developing in 2019. The company growth will be also geographical, firmly committed to expand into the U.S. and Asia, while reinforcing its position in Latin America and Europe, featuring new distribution agreements, commercial deals, and new hires.

Win Systems will be exhibiting at all the main trade shows all around the world: ICE London and Feria del Juego in Madrid (Europe), NIGA (U.S.), FADJA (Latin America) and G2E Asia (Macau).

AGEM Board of Directors Actions – January 2019 • The 2019 Election of AGEM Officers took place at the January meeting. Luke Orchard, IGT, is president, and will hold the position for a two-year term. The following officers were approved for one-year terms: Vice President David Lucchese, Everi; Vice President Bob Parente, Scientific Games; Vice President Tom Jingoli, Konami; Vice President Eric Fisher, Crane Payment Innovations (CPI); Secretary Mark Dunn, Aristocrat; Treasurer Tom Nieman, JCM Global; and General Counsel Daron Dorsey, Ainsworth.

• Kate Chambers, managing director-gaming, Clarion Events, and Greg Saint, event director, ICE, gave a presentation at the AGEM January meeting updating members on progress with the forthcoming event.

This year’s show will have 576 exhibitors, up from 509 last year, taking up a total space of 47,680 square meters. They will be opening up more exhibitor space in the South Hall to accommodate the increase of the sports betting sector. Visitor pre-registration is 12,457 (at the beginning of January), an increase of 48 percent from the same time last year. New initiatives include a Code of Conduct to monitor the dress code of exhibit staff and provide a safe working environment for everyone involved with the show.

• Carlos Carrión, head of the AGEM Mexico Committee, reported to members that a new director of regulatory agency SEGOB was recently appointed. Attorney Juan Gabriel Coutiño Gómez has taken up his position, and it is hoped his background in law will provide a good framework for Mexican industry legislation changes.

• AGEM members approved a slate of sponsorship contributions for forthcoming events. The 17th International Conference on Gambling & Risk Taking set for May 27-30, Las Vegas, receives $10,000; UNLV Gaming & Hospitality Education 2019 Series receives a $3,500 sponsorship that will cover all six events during the year; and International Masters of Gaming Law (IMGL) Spring Conference, taking place March 27-29, New Orleans, will receive a $5,000 sponsorship.

• AGEM members approved $30,000 toward a Gaming Technology Supplier Economic Impact Study.

This is undertaken every two years in partnership with Las Vegas-based Applied Analysis to track growth in the sector and provide a variety of information that illustrates how gaming equipment suppliers have a strong direct economic impact. The data is also shared with the American Gaming Association for its annual State of the States report as well as used when dealing with legislative issues.

• AGEM was approached by Nevada Gaming Control Board Chairwoman Becky Harris and her team at the end of last year to give a full review of the existing Gaming Device Technical Standards. The draft revisions will be presented in mid-January for consideration, and will hopefully provide a good opportunity to clear up and streamline some of the issues that suppliers have experienced in the past.

• CS-1 Transportation was approved as an Associate member. Based in Burlington, Ontario and with offices in Phoenix and Las Vegas, the company is an established logistics provider that specializes in the gaming sector, among others. This brings the total number of members to 167.

The AGEM Index decreased 41.73 points in December to 402.51, a decline of 10.4 percent over November 2018. The dramatic decline was due to large dips in the stock prices of several companies, such as Ainsworth Gaming Technology, Everi Holdings, Inspired Entertainment, IGT and Scientific Games, all of which saw a decline in stock prices in excess of 30 percent. Overall, nine companies in the AGEM Index saw declines in their stock prices while only four showed improvement.

AGEM is an international trade association representing manufacturers of electronic gaming devices, systems, lotteries and components for the gaming industry. The association works to further the interests of gaming equipment manufacturers throughout the world. Through political action, trade show partnerships, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. Together, AGEM and its member organizations have assisted regulatory commissions and participated in the legislative process to solve problems and create a positive business environment.

FEBRUARY 2019 www.ggbmagazine.com

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The Importance Of Data In Sports Betting Why the leagues are demanding “integrity fees” and how “in-play” wagering will explode

By Steve Gallaway and Brendan Bussmann

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s sports betting expands into new markets within the United States, operators and state governments are growing eager to capitalize on the opportunity.

In addition to Nevada, seven states now offer some form of sports betting in the post-PASPA (Professional and Amateur Sports Protection Act) world. This number will likely grow as 2019 continues to unfold, as a supermajority of states plan to look into the opportunity for sports betting within their borders. Global Market Advisors has previously estimated the sports betting market at $139 billion, but that figure is contingent on how the market is crafted in each state.

Throughout the debate in the post-PASPA world, one of the key buzzwords has been “data” and the use of an “official data source” in determining the outcome of a wager, specifically as it may apply to those bets taking place during a game or contest. Driven largely by some of the professional leagues, this is another key element to add “integrity” to the process.

While integrity has been another buzzword that continues to be bantered by the leagues, the proposition of an “integrity fee” is simply an additional revenue source that is sought by those leagues. The value of live, quality data remains paramount to the success of legal sports betting in America for all parties involved.

However, data feeds are not the only part of the data equation that matters. Data in the form of player databases is the other critical part of the equation. Historically, many sports betting providers lacked a quality sports 14

Global Gaming Business FEBRUARY 2019

betting database, as there has not been a robust tracking mechanism similar to that used with casino play. The advent of mobile sports betting has greatly facilitated the ability for operators to build a database. Both data feeds and databases will be critical to the overall operations and financial success of sports books as they continue to expand across the country.

Data Feeds The most palpable purpose of data in sports betting is to ensure that odds and statistics are readily available for bettors and operators alike. Data feeds play a critical role in providing the optimal sports betting experience.

Quick and reliable data will be necessary to engage bettors and other sports fans, and operators will need to make data more accessible to these customers in order to remain competitive.

Data feed providers gather information based on sports betting lines from an aggregate of sports book operators around the world. They then send this information to oddsmakers, including what the current odds are in other jurisdictions and what the estimated odds are in their own jurisdiction. They also provide oddsmakers with relevant statistical information, such as injury reports, to inform them as to how they should set and adjust their lines.

In the U.S. and abroad, bookmakers pay close attention to data feeds from these third-party providers to see where and how lines are moving.

For example, bookmakers in the U.S. will look to sports betting activity in

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Quick and reliable data will be necessary to engage bettors and other sports fans, and operators will need to make data more accessible to these customers in order to remain competitive.

the Caribbean, as many of these countries are located in the Atlantic time zone, putting them at least one hour ahead of most of the United States.

It is understood that many of those individuals betting in the Caribbean are U.S.-based sports bettors that have found ways to place bets online directly with these illegal, offshore sports betting operations. However, this is a somewhat wide-ranging assumption that cannot be soundly proven, as these bettors are playing under the radar through offshore sports books, and their identity and location cannot be confirmed.

An expanded legal U.S. market would ideally entail strict regulations to ensure that accurate geofencing makes sports betting unavailable to patrons located outside of a given jurisdiction. As such, data feed providers can have a greater understanding of who is placing what type of bets, and operators can assure their bettors that their odds are set with a clear understanding of sports betting trends around the world.

MGM Resorts International was the first major operator to make a deal over data feeds when it became the official gaming sponsor of the National Basketball Association. As part of the agreement, MGM parlayed a deal to serve as the official gaming operator as well as to have the league’s official data for sports wagering. MGM has continued to secure these data feeds with additional deals with the National Hockey League and Major League Baseball. At the writing off this article, FanDuel has also signed on with the NBA to receive an official data feed.

One thing that is paramount over data feeds is that mandating it by law should be considered a non-starter for operators. As legislation develops across various states, some are attempting to include mandating the use of official league data. There has even been an inclusion in the proposed Hatch-Schumer sports betting legislation at the federal level. Through Nevada, New Jersey and other existing jurisdictions, the market has already proven that it can act on its own without requiring operators to purchase official data, a requirement that illegal books do not have.

Requiring that legal operators purchase the data will only allow the leagues to charge more for it, thereby creating another financial hurdle hin-

dering the ability of the legal books to complete with the illegal books.

To play well in the market, teams and leagues must not see this as a revenue grab but as an opportunity to bring integrity to the process.

They must also be transparent with items of importance, including injury reports. Additionally, because sports betting is a high-volume, lowmargin business, they also should not instill a monopolistic environment that makes their database become a prohibitive cost to the market.

The Illegal Market It is widely believed that combating such a deeply rooted illegal market will be the greatest challenge facing legal sports betting operations in the U.S. Today, while many individuals find ways to place bets through offshore sites, other customers can easily find illegal bookies by simply asking a friend or neighbor, or by inquiring at the local bar. Sports betting data will be essential for the legal market to compete with the illegal market. Quick and reliable data feeds will ensure integrity of games and the bets placed on those games, and will give consumers the sense that their wagers are genuinely connected to the sports upon which they bet. Additionally, to effectively offer in-game wagering, real-time live data must be available. If data feeds are appropriately offered to only legal books, this will create a significant competitive advantage over the illegal operators.

Building and Utilizing a Player Database As is the case with any gaming operation, data will be paramount to building and utilizing a robust sports betting player database. Existing gaming operators looking to enter the sports betting marketplace will want to market their new product to their existing player database, and they will want to reach out to sports bettors outside of their existing database—whether they currently wager legally or illegally. Operators also have the opportunity to market their existing gaming and non-gaming products to new sports betting players, which can encourage incremental visitation and spending at casino and resort properties.

FEBRUARY 2019 www.ggbmagazine.com

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In-action apps such as FanBeat have created their own niche by offering a different experience to their players in the social gaming space that has significantly increased engagement in the events they cover while delivering data to their clients.

Before the advent of mobile, sports books in Las Vegas and throughout Nevada did not necessarily track those wagering on sports. Locals that were regulars were typically known at their neighborhood casino because that is where they placed most of their wagers. This has changed over the last couple of years, as many bettors have switched to mobile wagering, a platform under which play is automatically tracked.

In addition, through the signup process, the operator is able to learn a significant amount about its players, at a minimum including age, sex and address, including an email address. This is equally as relevant for tourists who download the app and place bets through their mobile devices. Casinos can leverage the knowledge of knowing which of their guests enjoy sports betting by focusing offers to return around sporting events.

The ability to grow a database further instills the notion that sports betting is as much of an amenity as it is a source of revenue. A quality database from a sports betting operator could have as much value to the operator as the revenue generated by sports betting itself. In addition, if a company chooses to sell, the size of its database could determine the value of the entity, particularly if the buyer is an entity outside of the gaming space, such as a TV network looking to further expand its footprint.

In-Game Wagering While quick and reliable data feeds will enhance the accuracy of odds and integrity of wagers, it will also expand the type of product that can be offered. Specifically, quick and reliable data feeds are paramount to a successful in-game wagering product.

In-game wagering, or any bet placed on a contest that is already under way, has become much more convenient for consumers with the advent of mobile wagering. Bettors can place a higher volume of bets in real time on their mobile devices as soon as they become available, rather than waiting at a kiosk or window several times over the course of one game. Operators that look to offer in-game wagering need to rely on consistent and accurate data feeds to ensure that their product appeals to customers and remains competitive.

Although it has not yet gained traction in legal jurisdictions in the United States, in-game wagering represents a large portion of wagering activity in jurisdictions outside of the U.S., especially in Europe. In-game wagering presents a substantial opportunity for the legal market to compete against the robust illegal U.S. market. Legal sports books offering a wider variety of wagers delivered to customers in a split second can expect to begin to capture a sizeable portion of the illegal activity. It is the transfer of illegal betting to legal betting that remains the greatest opportunity for U.S. books.

As steady data feeds enhance the overall quality of in-game wagering products and result in an increased number of active players, this will open additional revenue streams to operators through advertising and partnerships 16

Global Gaming Business FEBRUARY 2019

with media, leagues and individual teams. A plethora of research and empirical data exists illustrating that sports bettors watch more programming for longer periods of time, compared to the average sports fan.

A recent study by Nielsen Sports found that bettors are nearly twice as likely to consider themselves “avid fans� of the game. As such, there is a tremendous opportunity for leagues to bring in more fans that have more enthusiasm about the game by building relationships with gaming operators.

In-action apps such as FanBeat have created their own niche by offering a different experience to their players in the social gaming space that has significantly increased engagement in the events they cover while delivering data to their clients (e.g. sports teams, sports media channels) in a low-cost fashion. FanBeat shared with GMA data illustrating that fans who engage online during a match will watch more than double the time of an average viewer.

This results in the ability for their clients to quantitively see the benefit and increase the size of their own database by tens and hundreds of thousands due to this new type of engagement. Groups like this offer a distinct advantage to operators to allow them to gain customers at a lower cost to ownership while beginning to cultivate a market prior to legalization in a state because it can be played in both a wagering and non-wagering environment.

The Road Ahead As operators, leagues, legislators and other interested parties sort out each state’s sports betting market, quality data feeds will likely be one of the more dominant discussion points. This has been demonstrated over the past few months in the states that have tried to legalize sports betting, and even at the federal level. However, the quality of the databases generated by these sports betting apps may be an even more important factor in determining the success of a market for an individual operator.

The ability to attract and retain bettors that exist in a market prior to legalization, as well growing those databases where it is legal today, is invaluable to any operator. Maintaining those individuals and offering them a superior experience to the illegal market is how the legal sports betting market is then able to flourish.

Steve Gallaway is managing partner at Global Market Advisors and can be reached at smg@globalmarketadvisors.com. Brendan D. Bussmann is a partner and director of government affairs with Global Market Advisors and can be reached at bdb@globalmarketadvisors.com.

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BETTING ON

BLACKJACK Can millennials ever cozy up to the casino’s most “beatable” game?

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By Nicole Schultz

ombining simple rules, advanced strategy and its “beatable” reputation, it’s no secret that blackjack has been a casino favorite for decades.

Though the game continues to dominate the casino and certainly has a future on the floor, some of the biggest names in gaming believe it will take more than a few new side bets to intrigue the next generation of gamers; elements of the casino floor need to be completely revamped to create a more social and welcoming space for new players.

According to these sources, often, millennials aren’t playing table games like blackjack because they may feel uncomfortable and unwelcome upon entry onto the casino floor. The intricate “yellow brick road” that winds its way through a labyrinth of machines and tables, lined with unfamiliar games and faces, is intimidating to new players. They don’t even have the chance to make it to the tables.

And these feelings of inadequacy are only amplified when young players are seated next to older and more experienced players who aren’t always interested in mentoring the next generation. Mix a fussy dealer and belligerent customers in with a poor understanding of the game rules, and a new player’s first hand of blackjack might turn into their last.

Fortunately, however, casino experts are working hard to understand their newest players. These experts believe that innovation, collaboration and socialization are the tricks necessary to bring new players to the floor—and keep them there.

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Global Gaming Business FEBRUARY 2019

The Future of Blackjack For years, some of the biggest questions about the future of gaming have revolved around the generation born between 1981 and 1996. What do millennials want, and how do casinos make a profit from them? Blackjack’s easy-to-learn rules combined with its advanced strategy and opportunities for socialization should make it the perfect game for millennials. But is this really the case?

According to Anthony Curtis, publisher of the Las Vegas Advisor, “The millennial puzzle is a tough one. You’d expect that millennials would love a game like blackjack, but from what I’ve observed they tend to gravitate more towards roulette.”

Dan Sahl agrees. Sahl, associate director of the International Gaming Institute’s Center for Gaming Innovation at the University of Nevada, Las Vegas, uses his background in sociology to provide a theory that may explain why casinos, even those that offer skill-based games, still have trouble recruiting millennials to the casino floor.

“Looking towards the future, the question isn’t just about innovating the games themselves,” Sahl says. “Instead, we should be asking ourselves if the way we are introducing the social side of table games like blackjack is appealing to millennials.”

This generation is used to living in an era where all the information they could ever need is at their fingertips. The unspoken rules and expectations in a game like blackjack, however, aren’t something that a quick

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“The question isn’t just about innovating the games themselves. Instead, we should be asking ourselves if the way we are introducing the social side of table games like blackjack is appealing to millennials.”

—Dan Sahl, Associate Director, UNLV International Gaming Institute’s Center for Gaming Innovation

Google search can solve. For young players, a fear of messing up hangs in the air. This feeling is only amplified when surrounded by dealers and seasoned players who are never hesitant to criticize when mistakes are made.

“How is a new player supposed to learn when they’re afraid to ask any questions?” Sahl says.

The elements of uncertainty in a live game of blackjack need to be experienced to be understood, but the elements that make the game exciting also create a barrier of entry to the most novice players. And though bar-top and electronic blackjack games provide an opportunity to privately learn some of the rules and strategy, these games don’t give players the chance to learn the more intimidating, but also exhilarating, unwritten social rules.

For example, says Sahl, “Players are expected to know not to touch their cards once they are dealt, and they need to know which hand gesture means ‘hit’ and which hand gesture means ‘stay.’ Unless, of course, you’re playing at a table where you are expected to pick up your cards and there is an entirely new set of rules to follow.”

Though blackjack can offer the skill-based and social elements that younger players want—including memorable interactions with friends, players and dealers—we have to first encourage millennials to view blackjack as their game.

“Part of the trick is not only to think about what the millennial wants as an individual, but to think about what a group of millennial friends wants to play together,” says Sahl.

A game like roulette, though it offers no real skill, provides socialization with simplicity and without uncertainty. And although the social space of the casino needs to be improved upon, we can’t forget that the existing game of blackjack also has room for innovation.

“Once word gets out that one casino has better odds than another, players will patronize that casino even if they don’t understand the math behind why.”

—Anthony Curtis, Publisher, Las Vegas Advisor

Changing the Game As the industry adjusts the blackjack experience to be more friendly and inviting, innovative additions to the blackjack table, like side bets, progressives and electronic apparatus, should be what keeps both new and experienced players coming back for more.

“When compared with other table games, blackjack has seen the most changes over the years, and often these changes cater to recreational players,” says Roger Snow, vice president of table games for Scientific Games. “Not too long ago, serious players would hunt down the best blackjack game in terms of rules and number of decks. But now players are there to have fun, and these changes are designed to cater to that audience.”

For operators and manufacturers, satisfying both old and new customers becomes a difficult balancing act. For hardcore players, the base game of blackjack may become repetitive after a while, and side bets like 21+3, Lucky Ladies and Buster Blackjack, along with progressives like Blazing 7s and Super 4, introduce more ways to win and keep things interesting.

“Everything needs to evolve. The genie’s not going back in the bottle and blackjack’s not going back to what it was,” says Snow.

But different side bets appeal to different players, according to Snow.

“Experienced players know that these types of bets favor the house, so side bets need enough volatility to entice them to play.”

Sahl agrees, noting, “Good side bets will always be important for casinos as a source of increased revenue, and players like them because they provide variation and volatility to the traditional game. With some side bets paying 100-to-1, 300-to-1 or even 500-to-1, most players will always be enticed by the potential to turn $1 into $100.”

However, according to Max Rubin—casino consultant, author of Comp City: A Guide to Free Casino Vacations, and host of the world-famous Blackjack Ball—a key component of side bets should be hit frequency, not necessarily volatility. Rubin is personally a fan of Buster Blackjack because of its simplicity and hit frequency. Players win if the dealer busts, which, in a good game of blackjack, should happen often. And, as a bonus, in certain cases payouts on Buster Blackjack can be huge—as much as 250-to-1.

Sahl also believes that electronic blackjack games create additional room for innovation, and that these versions are on the rise for several reasons.

These games allow novice players to brush up on their skills with relatively low stakes—as low as 25 cents per hand, versus the typical $5 per hand minimum at a table—as well as removing much of the intimidation factor that accompanies first-timers in live table games.

Despite the surge in popularity, however, electronic blackjack games don’t currently provide the same socialization opportunities as live games.

The electronic games are a great way to learn the basics, but the socialization opportunities in live table games are what carve out the future of blackjack for millennials.

FEBRUARY 2019 www.ggbmagazine.com

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“All players should not be punished for the acts of a select few. Most players are not card counters, but we treat them like they are.”

—Max Rubin, author of Comp City: A Guide to Free Casino Vacations and host of the world-famous Blackjack Ball

Player Disadvantages Blackjack’s popular game play, social experiences and reputation as a “beatable” game ensure that it comprises roughly 50 percent of tables on the floor.

In recent years, however, casinos have used various methods to mitigate the risks of advantage play. Side bets, for example, often have a greater house advantage than the base game.

“If you see a side bet on a game of blackjack, your best bet is usually to not use it,” suggests Curtis.

And side bets aren’t the only way casinos make additional profit from players. For those who understand the math behind games like blackjack, a 6:5 payoff versus a traditional 3:2 payoff is outrageous. But most recreational players don’t know the difference.

“They don’t understand that 3:2 is 15:10 and 6:5 is only 12:10. Most players haven’t been trained to do the math, or if they do understand the math, they don’t understand the magnitude of difference,” says Curtis. A few percentage points here and there drastically improves the profitability of a table for the operator.

Moreover, nuances in the house rules are yet another way casinos may create an edge for themselves.

“Can you resplit aces? Can you double down after splitting? Does the dealer hit or stand on soft 17? One answer is better than the other in all cases,” says Curtis, “but the recreational blackjack player has no idea.”

Couple these house rules with advancements in casino technologies— like automatic card shufflers that deal anywhere from six to eight decks of cards—and games are sped up, and casinos believe they’ve solved the advantage play problem.

To some, it may seem like casinos should take advantage of their most unassuming players. But, as is often the case, just because you can doesn’t mean you should.

Curtis says, “Once word gets out that one casino has better odds than another, players will patronize that casino even if they don’t understand the math behind why.”

Word-of-mouth goes a long way in the gaming industry, and it’s a way of holding casinos accountable for treating their players fairly. Until there is a universal industry standard, the incentive for casinos to offer better odds than their competitors is the potential for increased popularity.

The Social Side of Gaming And while casino operators and game manufacturers are often primarily data-driven, Rubin believes that the industry should be driven by the social side of gaming, not the numbers. Casinos should provide patrons with opportunities to interact positively with friends, fellow players and dealers.

Players shouldn’t be greeted by isolation and unsmiling faces when seated at a table game, as is often the case. Rubin believes that casinos need to reimag20

Global Gaming Business FEBRUARY 2019

ine what fun looks like for younger players and simultaneously breathe life into a classic casino game—making game play more enjoyable for players of all ages.

For now, however, countermeasures introduced to prevent advantage play in blackjack contribute to the feelings of unease and intimidation that newcomers experience. Rubin believes that these data-driven strategies ultimately hurt casinos.

“All players should not be punished for the acts of a select few,” he says.

“Most players are not card counters, but we treat them like they are.”

Instead of creating strict rules and regulations, Rubin believes that a casino’s profitability and success depend on the happiness of the people, which depends as much on the friendliness of the encounter as the outcome of the cards.

“Most dealers are part-time and haven’t been trained very well. They don’t know how to spot card counters or interact with players,” says Rubin.

In the long run, a cost-saving strategy can lead to low morale because, generally speaking, when dealers have fun, players have fun. Without the proper training, dealers are simply taught how to deal quickly and efficiently, often using automatic card shufflers to further expedite the dealing process.

Though speeding up the game should generate more revenue from an increased number of hands, speeding up a game may also make players lose faster and leave faster.

“Casinos are a people business, and data can’t be used to measure everything because it doesn’t account for the human side of things,” says Rubin.

With social elements and innovative side bets, blackjack has the potential to draw new players to the casino floor, as well as retain old ones. Starting with the people, from attentive cocktail servers to properly trained dealers, we want players to walk away feeling like winners—even after losing their last chip. Frequent-hitting side bets, tables that pay 3:2, and advantageous house rules should be what keeps these players coming back time and time again.

Though the data might show that this isn’t the fastest way to make a profit, it’s the only way to ensure a happy, passionate base of loyal blackjack players.

Sources say that for now and for the foreseeable future, the biggest barrier casinos need to overcome is getting millennials to sit down at their tables.

The games themselves aren’t the issue.

“The key to success in a game like blackjack,” says Sahl, “is creating a more comfortable culture for younger players. Casinos should be asking themselves how they can innovate the way table gaming is offered as a fun social experience.”

Nicole Schultz is the global gaming capital coordinator of the International Gaming Institute at the University of Nevada, Las Vegas, overseeing all communication and public relations efforts, and a freelance writer for various publications.

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n w o d k a e r B h s i t i Br The future of gambling in the United Kingdom

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By Steve Donoughue

FOBT Fixes he last few years have shown what can only be described as flaccid As with much to do with British political life at the moment, Brexit has growth for the U.K. gambling industry. According to the Gamsucked the very oxygen from everything else. This may well be why the bling Commission, total gross gambling yield was £14.4 billion adoption of the Gaming Machine (Miscellaneous Amendments and (US$18.1 billion) in 2017-18, up a meager 5.88 percent from 2015-16, when Revocation) Regulations 2018 on December 20, 2018 has passed so the first statistics that include online appeared. many people by.

A key trend has been the shift in channel from land-based to online, with This is the secondary legislation that reduces the stake of fixed odds online market share increasing to 37.3 percent from 33 percent. This is more betting terminals (FOBTs) from £100 to £2 and in one foul swoop critidramatically reflected by the 35.7 percent drop in U.K. gambling jobs from cally injures the British retail betting market, puts thousands out of a job 167,839 to 107,940 over the same period. and will see the closure of thousands of betting shops.

Receipts from gambling taxes have increased by 7.3 percent over the same And no one, apart from the bookmakers, seems to care. This political three years to £2.86 billion (US$3.59 billion). What is significant is that given decision is symbolic to the argument that 2018 has been a turning point the amount of public debate about the supposed growth of gambling over this in the politics of British gambling, and that the end of the FOBT story period, there has been little statistical evidence to back this up.

Looking forward, the deadline for leaving the European Union (March 29) is hurtling towards us like a runaway train. Any question about the future of the U.K. must include an understanding of its implications. While the biggest constitutional change in postwar British history—and in this view, the biggest act of national self-harm—will have relatively little direct impact on the British gambling industry, as practically no EU laws impact it, the forecast economic turmoil that it will bring will indirectly affect the industry as revenues will undoubtedly drop.

The question on every gambling CEO’s lips will be, by how much and for how long? This all depends on what kind of Brexit we will have, and with less than three months to go at the time of writing, no one, not even the Prime Minister, knows the answer to that one. So, hold on to your hats. This roller-coaster ride will undoubtedly be messy, but unfortunately, the long-term structural trends for the industry Fixed odds betting terminals became a firestorm in the U.K. in 2018 when the government lowered the betting limit from £100 to £2 are even worse.

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The “clustering” of betting shops on the high streets of British cities was criticized by anti-gambling activists

has opened a Hellmouth of ever-increasing regulation and taxation that the Labor Party politicians complaining about the number of betting shops may never, in the short to medium term, be reversed. “clustering” the high street due to the demand for the machines. Then came For those of you in a blissful state of ignorance, let me get you up to key casino industry members attacking FOBTs for purely ideological reasons, speed on this cautionary tale. FOBTs are electronic gaming terminals that emphasizing the pan industry distaste for the product, and finally came the offer roulette among other games, but roulette is their main product. Depost-truth pre-Trumpian form of anti-gambling campaign group, the ironiveloped in the late 1990s, they were offered in betting shops as automated cally named Campaign for Fairer Gambling (CFFG). betting machines, the argument being that roulette is simply a series of Set up by a highly litigious casino games salesman, Derek Webb, who fixed odds bets on a random outcome. This was challenged by the then had been rebuffed by the bookmakers in favor of FOBTs, Webb would pour gambling regulator in 2004, the Gaming Board for Great Britain, who armillions into his campaign. According to Philip Davies, MP (and thus under gued that roulette, as a casino game, could only be played in casinos. parliamentary privilege), Webb “has spent millions trying to get these maBoth arguments were valid under different laws, and it was agreed that chines out of betting shops for no other reason than vindictiveness; that is the the courts should decide. Unfortunately, this would not be the case, probalong and short of it. He set up the Campaign for Fairer Gambling on the bly because both sides realized the potential legal costs, but it was later back of this issue.” agreed that as long as the bookmakers limited the number to four per shop What made the CFFG different from previous anti-gambling groups was and kept stakes limited to £100 and prizes limited to £500, they could renot its willingness to use false statistics, twist academic research and collabomain, as the soon-to-be-passed new gambling legislation would sort out the rate with militant academics; they had all done that previously. It was the legal gray area. The Gambling Act 2005 was full-time employment of staff, the use of a professional passed on the April 7, 2005, and it categorized marketing agency and the willingness to contribute FOBTs as B2 gaming machines and kept the tens of thousands of pounds to various politicians to quota per betting shop and stakes and prize garner support. Their argument was FOBTs caused limits the same. problem gambling and their maximum stake should be By the time the new legislation came into reduced to £2, which would kill the product dead. force, October 2007, there were more than By 2014, the CFFG efforts garnered the support of 30,000 FOBTs rolled out across the country in the opposition political parties, many of the main Britain’s 8,800 betting shops, making an avernewspapers, and were becoming a serious pain for the age gross gaming yield of £33,420 government, which was trying to retain an evidenceThe UK Gambling (US$41,998) each. As the financial crisis of based approach to policymaking—as there was not, 2007-2008 hit the high street, they would and still isn’t, any evidence that FOBTs cause problem Commission repeated make betting shops one of the few growth stogambling. There is, however, a lot of anecdotal evifalse reports about ries, with the number of shops increasing—by dence that problem gamblers like to use FOBTs, and 2012, FOBTs would be the most profitable children gambling online. the emotive stories of their self-destructive escapades part of retail bookmaking, taking in more than were much used in the campaign. Many were wheeled over-the-counter bets. out to meet MPs and tell their tales of woe.

High Street Hurdles

Bookmakers’ Malaise

As with all successful gambling products to have been introduced into Britain throughout the last 150 years, with success comes notoriety, and with notoriety comes condemnation.

At first, it was the trade association representing the slot arcades, arguing that FOBTs in betting shops were stealing their customers. Then came

A major reason why the anti-gambling brigade garnered such political traction was the ineptitude of the bookmakers’ political response. At first they did very little, thus allowing zombie memes to arise. They’re called zombie memes because they are very difficult to kill. People would be repeating the accusation that you could lose £15,000 per hour in a machine for years, howFEBRUARY 2019 www.ggbmagazine.com

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Sponsorships of U.K. football teams by betting businesses is also under attack

Of course, it comes down to money. It always does.

But unlike donations to charities, which just exist as statements on company accounts, the industry should invest in tangible stuff that provides ongoing evidence of the industry’s good intentions— £5 million setting up a residential treatment center for problem gamblers, and £5 million setting up a fund to provide funding for grassroots sport. These will provide the stories that will regain the industry’s permission to speak.

ever practically and statistically impossible that it was. This meant that when the bookmakers finally started to respond, an anti-FOBT folklore was well-established already.

Hard as it was to defend against the CFFG attacks, it was not helped by the fact they did it in the most tin-eared way imaginable. Their argument was that if there were to be any restriction on FOBTs this would mean the closure of betting shops and the consequential loss of jobs and tax revenues. All undeniably true, but not a good argument against an opponent that is suggesting that your products cause suicide, harm and misery. What this approach succeeded in doing was losing what support the bookmaking industry had in Parliament or the press.

The knock-on effect of this was that when the government could no longer resist the pressure from the anti-FOBT campaign any longer, and had to decide what level to reduce the FOBT stake limit to, they were forced to ignore the recommendations of their own regulator, the statutory policy advisor on gambling, who had specifically stated that any limit apart from £2 was recommended. They went with £2 as they knew they would lose the vote in Parliament if they went for anything higher, such was the parliamentary disdain for FOBTs. Then, as if to rub it in, the proposed enforcement date of October 2019 was brought forward to April 2019 due in part to the resignation of the gambling minister, Tracy Crouch, MP, whose resignation speech included the completely spurious assertion that FOBTs were the cause of two suicides per week. Complete victory to the anti-FOBT brigade was based on little more than anecdotes and lies. The industry could and should have done better.

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Global Gaming Business FEBRUARY 2019

Online Gaming Next?

What is increasingly evident is that the FOBT story has seen ministers, parliamentarians, civil servants, regulators and members of the industry ecosystem all captured by the anti-gambling lobby.

The anti-gambling sentiment wasn’t just about FOBTs; most of these stakeholders didn’t even know what they were. They just saw a bad smell about gambling and have taken an increasingly anti-gambling stance ever since, with online gambling the next sector in the firing line.

The last year has seen fake news about children gambling emanating from the Gambling Commission, and a national newspaper arguing that because it was technically possible for underaged players to play online slots in free play mode (and therefore not gambling) this was creating a generation of problem gamblers. The year also saw a member of Parliament suggesting that just because a football jersey had a gambling brand name emblazoned on it, the same thing would happen—an unprompted political campaign was implemented against gambling advertising in football by a supposedly neutral charity called GambleAware—the Advertising Standards Agency suggesting that it is concerned about the normalization of gambling.

To top it all, the killer blow has already been put on the roadmap by the regulator in the form of affordability —the concept that somebody will choose an arbitrary limit for players to deposit, and it will be up to the players to prove they can afford to gamble more. All of which suggests that the British gambling industry is politically approaching the fork in the road that determines whether gambling becomes like alcohol—some restrictions but tolerated—or like tobacco, massive restrictions and not tolerated. And unless drastic action is taken quickly, it’s the tobacco route.

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What can the industry do? First, we need to gain permission to speak.

What can the industry do? First, we need to gain permission to speak. What this means is that currently, the gambling industry is considered “rapacious capitalists” with no interests in anything but profit, and anything we do will be just be ignored.

Take the recent self-imposed ban on TV advertising during football matches. This was responded to with just a “they should do that anyway.” Currently, the U.K. gambling industry could donate £1 billion to problem gambling and it would be met with just a shrug. The industry needs to gain permission to speak by proving to Parliament, Whitehall and Fleet Street (Parliament, government and the press) that we are good citizens worthy of their attention.

Of course, it comes down to money. It always does. But unlike donations to charities, which just exist as statements on company accounts, the industry should invest in tangible stuff that provides ongoing evidence of the industry’s good intentions—£5 million setting up a residential treatment center for problem gamblers, and £5 million setting up a fund to provide funding for grassroots sport. These will provide the stories that will regain the industry’s permission to speak.

Once that is achieved, the industry has to have something to say more coherent than it provides jobs and taxes. It needs to create a narrative of how gambling is part of the country’s cultural recreational tradition and how it is happily indulged in by the 99 percent majority.

To do this needs foresight and an understanding that unless drastic action is taken now, the road to tobacco becomes very short. Unfortunately, there are few gambling CEOs out there who seem to understand this, so my predictions for the future of the U.K. industry are not good.

Steve Donoughue is CEO of www.GamblingConsultant.co.uk Limited, a 25-year consulting veteran to the gaming industry and a specialist in U.K. gambling politics. Donoughue is also the secretariat of the Parliamentary All Party Betting & Gaming Group and a Ph.D. candidate at the University of Westminster, where he is researching the Gambling Act 2005. His views are his alone, not of any organization or this publication.

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One Size Does NOT Fit All Sports betting taking slow strides with mid-size, small tribal casinos

By Dave Palermo

T

he Spirit Lake Tribe, owners of a modest, 49,000-square-foot casino and 124-room hotel near Devil’s Lake in northeast North Dakota, hopes to soon offer customers the opportunity to wager on college and professional sports.

Tribal-state compacts permit North Dakota’s seven American Indian casinos to operate sports betting. And Spirit Lake will hold a tribal referendum this spring on a measure to allow alcohol at the casino. If it passes, the tribe will build a sports bar.

“I don’t think it will be a full-blown sports book operation,” Slot Director Jason Thompson says. “I don’t think we have the capability to do that.

But there are a lot of gamblers that will want to place bets on sporting events.

It will be a good source of revenue.”

Some 225 miles south in Hankinson, the Sisseton-Wahpeton Oyate of the Lake Traverse Reservation are opposed to sports betting at their 95,000square-foot Dakota Magic casino and 111-room hotel.

“It’s been discussed,” Marketing Director Rojelio Rubio says. “But there is currently no interest in it right now. There are a lot of risks and not a whole lot of profit margin.”

The difference of opinion on sports betting between Spirit Lake and Dakota Magic is indicative of the split among the nearly 500 casinos in 29 states that make up the $32.4 billion American Indian government casino industry.

“It’s a good illustration of what is going on nationally,” attorney Greg Gemignani, a lecturer at the International Center for Gaming Regulation at the University of Nevada, Las Vegas, says of the North Dakota tribes. “Each tribe has a different take on sports betting, or at least a slightly different spin.

I don’t know that they have a common desire to enter into it.

“A lot of tribes don’t want it, period,” Gemignani says. “Not only don’t they want it, they don’t want the lottery or commercial gaming in the area to have it, either.”

Many Indian tribes bought into a nationwide campaign by the American Gaming Association, the commercial casino lobby, to encourage the U.S. Supreme Court to strike down a federal prohibition against sports wagering.

Justices voted in May to nullify the Professional and Amateur Sports Protection Act (PASPA), opening sports betting legislation to the various states.

But the high risks and lack of profitability in sports betting—combined

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Global Gaming Business FEBRUARY 2019

with the legal and regulatory challenges for tribes operating casinos under federal law—soon diminished their enthusiasm.

Although tribes represent the largest segment of the nation’s approximately $100 billion legal gambling industry, it appears indigenous governments in only a few of the 29 states with significant Indian casino markets will seek to operate sports betting anytime soon.

A Divide Among Big, Small Players Of the 242 tribes with casinos, only 18 percent generate a whopping 74.3 percent of the $32.4 billion won by tribal casinos nationwide, according to the National Indian Gaming Commission (NIGC).

These approximately 90 lucrative casinos in largely urban areas stand to gain the most from sports betting, a risky endeavor requiring a hefty investment while generating a meager profit of 3-5 percent.

The upscale resorts can afford elaborate sports books with high-definition screens flashing sporting events to a younger, more lucrative customer willing to spend large on food, drinks and entertainment, not to mention other games of chance.

“Providing dedicated room and space for a stand-alone sports book is really going to be left to the larger guys,” says John Repa, president of Hospitality and Gaming Solutions, or perhaps 40 to 80 of the casinos nationwide. Others may incorporate betting windows into bars and restaurants or install kiosks.

But most tribes operate marginal, small to medium-sized facilities on rural, often economically deprived reservations in the Great Plains, West and Midwest—casinos intended to create jobs for struggling communities, not revenue to fill the pockets of corporate shareholders.

“There’s a broad spectrum in Indian Country covering two extremes: tribal nations that would not benefit at all and, on the other end, tribal nations that would significantly benefit,” NIGC Chairman Jonodev Osceola Chaudhuri told the Associated Press.

Of 494 tribal operations nationwide, 351 of them—or 71 percent— generated just 14.1 percent of the $32.4 billion in casino revenues in 2017, according to NIGC statistics.

Reservation casinos with 200 to 500 slot machines, a handful of table games, a few hotel rooms and a fast food restaurant may not be inclined to

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The Sisseton-Wahpeton Oyate of the Lake Traverse Reservation currently has no interest in offering sports betting at its Dakota Magic casino

“Everything I’ve seen so far suggests that this would not be what one would add sports betting to the mix. consider to be a pot of gold,” Ohio state Senator John Eklund, a Republican As an increasing number of states with tribal casinos begin to move on who introduced legislation to legalize sports betting in his state, told the Associlegislation to enable wagering on sports, many tribes are not getting on ated Press. board.

“The mid-range tribes are starting to pick up the pace in terms of lookRisks With Compacts, Competition ing at sports betting and getting ready to move on it,” says Deborah SkenanUnlike commercial casinos, expanded gambling for tribes operating under the dore-Thundercloud, chief of staff for the National Indian Gaming Indian Gaming Regulatory Act (IGRA) presents as many challenges as opporAssociation (NIGA). “But I see the trend moving much slower with the tunities. smaller tribes.”

IGRA requires indigenous governments seeking to operate casinos to enter “It’s moving very slow because of capital constraints and budget coninto tribal-state regulatory agreements, or compacts, many of which require straints,” Repa says. “The return on a sports book isn’t good. The margins tribes to share their gambling revenues with the state. are thin.”

Compacts vary from state to state. Some clearly define games permitted William Hill Race & Sports Book, which operates in more than 100 Neunder the compacts and do not specifically reference sports betting. Others vada casinos, bars and convenient stories, is seeking tribal partnerships for its broadly refer to casino games, including sports betting as Class III gambling operational expertise, risk management and trading data. under IGRA. Daniel Shapiro, vice president of business and stratTo operate sports books, tribes in many egy for William Hill US, says any size of tribal operastates need to negotiate new or amended comtion—from a gambling resort to a small and pacts, leaving them vulnerable to paying greater medium-sized casino to a kiosk—can avail them to a betrevenue shares to the state. This is particularly ting operation. problematic with the slim margins involved in “We’ve been talking to lots of tribes, ranging from operating a book. very small to very large ones,” Shapiro says. “We’ll have a Meanwhile, in states where tribes have exconversation with anybody, quite frankly. If you look at clusive rights to operate casinos, legal sports betour Nevada operations, we operate in large casinos on ting can create competition for the gambling the Strip and we operate in small ones in rural Nevada. dollar from the lottery, racetracks and other po“There are different ways of structuring an agreetential vendors such as taverns, card rooms and ment. Certainly we’re willing to provide the technology charities. and/or risk management. Kiosks are another way to offer In addition, IGRA limits tribes to gambling sports betting to a smaller property. Any tribe should be “There are different on Indian land, creating a potential legal probable to operate.” ways of structuring an lem with mobile and account wagering. Online Meanwhile, California, Arizona, Oklahoma, Minagreement. Certainly and account wagering dramatically increase nesota and other states with large tribal casino industries we’re willing to provide profits from sports betting. taking up sports betting legislation in the new year aren’t the technology and/or For a rural tribe in a state with no profesimpressed with the bottom line. sional sports teams, wagering on sports may not “States in the beginning really thought this was risk management.” make economic sense if it is limited to Indian going to be a big windfall,” Repa says. “Now the reality —Dan Shapiro, Vice President, lands, particularly when one figures in risks, uphas begun to sink in. They’ve been educated enough that Business and Strategy, William Hill US front capital costs, compact revenue sharing and they know it’s not what they thought it was going to be, an operating agreement. initially.”

FEBRUARY 2019 www.ggbmagazine.com

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“Each tribe has a different take on sports betting, or at least a slightly different spin.”

—Nevada gaming attorney Greg Gemignani

“If the state law is such that tribes are not going to be able to take wagers from off tribal lands, what’s the point of having any expanded gaming at all, sports or otherwise?” Gemignani asks.

Roadblocks to Tribal Sports Betting Legislatures in Nevada, New Jersey, Delaware, West Virginia, Mississippi, Pennsylvania and Rhode Island already have legalized sports betting. Other states— including Kentucky, Missouri, Ohio, Tennessee and Virginia—will consider sports betting bills early this year.

Sports betting legislation in several states with significant tribal markets is expected to be approved through legislation or ballot initiatives, including New York, New Mexico, Connecticut, Oklahoma, North and South Dakota and Arizona.

But much of the tribal casino industry will not be participants in sports betting, at least not for a few years.

In California, 63 licensed casinos generate more than $9 billion a year, roughly 30 percent of the tribal revenues nationwide. But politically powerful tribal casinos, card rooms and racetracks have struggled for a decade over competition issues in efforts to legalize online poker.

Sports betting in the Golden State would require a voter-approved constitutional amendment. A draft ballot initiative would grant licenses to tribal casinos, card rooms and racetracks. It would also allow banked table games in the card rooms, encroaching on tribal exclusivity.

“California voters have, on numerous occasions, confirmed the exclusive right of California tribal governments to operate casino-style games,” says Steve Stallings, chairman of the California Nations Indian Gaming Association. “Legalization of sports betting should not become a back-door way to infringe upon that exclusivity.”

Eleven Minnesota casinos tribes oppose any expansion of legal gambling in the state, including sports betting. The largest of 11 Wisconsin tribes operating about 25 casinos have also expressed an unwillingness to renegotiate tribal-state compacts.

A dozen Michigan Indian tribes agreed to carefully craft online wagering legislation for commercial and Indian casinos in the state. But the bill was vetoed by the governor.

Several of the 14 pueblos and tribes in New Mexico have stated they define compacts as including sports betting, a decision not opposed by the state attorney general. Santa Ana has launched a sports betting operation.

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Global Gaming Business

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“Our feeling is rather than jumping in and pushing the situation, creating ambiguity or volatility in the situation, we want to work with the state to create the regulatory infrastructure that will help the state and help the tribes.”

—Navajo Nation Gaming Enterprise CEO Brian Parrish

The Royal River Hotel & Casino owned by the Flandreau Santee Sioux Tribe supports a South Dakota initiative that would allow sports books in Deadwood—and at tribal casinos within the state

“We are always trying to be on our toes in anticipating expanded gaming in the state that will somehow diminish our own operations,” Fox says. “We are very much concerned about how (the state) will approach the issue.”

South Dakota

North Dakota Legislation is being floated in North Dakota to add sports wagering to the limited-stakes blackjack and pull tabs already allowed by some 50 charities and nonprofits in many of the bars, restaurants and hotels. State legislators also may pursue a constitutional amendment, which would require a ballot measure.

Wagering on sports is already permitted on tribal lands in North Dakota with the repeal of PASPA. But it’s not clear how many of the seven mainly small tribal casinos will pursue sports betting, particularly if tribal-state compacts limit mobile gambling to tribal lands.

“That’s how the compact reads, within tribal boundaries,” says Collette Brown, director of Spirit Lake’s gaming commission. “But we have customers asking if we will be doing it,” she says, and the tribe is in discussions with William Hill US to operate the wagering in connection with a sports bar.

Chairman Mark Fox of the Three Affiliated Tribes of the Fort Berthold Reservation, owners of the 4 Bears Casino & Lodge in New Town, anticipates his tribe also will get into sports betting. The tribal operation has 600 slots, 10 tables and a 122-room motel.

Oil and gas generate the bulk of Fort Berthold tribal government revenues.

But the casino accounts for 350 to 400 jobs.

“You’re going to find with most of the tribal casinos in the upper Midwest and Northern Great Plains, jobs are most important,” Fox says. “Casino revenues are not that significant. It’s the jobs.”

The lottery, charitable gambling outlets and other vendors pose significant competition for 4 Bears Casino & Lodge.

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Global Gaming Business FEBRUARY 2019

The small and mid-sized tribal casinos in neighboring South Dakota are faced with a similar situation as the state legislature considers putting legalized sports betting for 22 commercial casinos in Deadwood on the 2020 ballot.

If passed, tribes would also be allowed to bet on sports.

Many of the seven tribes operating 11 casinos are not interested in getting into the business. Most are limited to a few blackjack tables and 250 slot machines or less.

“The tribal operations are pretty small,” says one casino general manager who requested anonymity. “It’s not really a priority for us.”

“I think we’re going to let it be,” says another casino manager.

The Flandreau Santee Sioux Tribe, whose 17,000-square-foot Royal River Hotel & Casino has 500 slots and 120 rooms, supports the Deadwood initiative.

“We have been actively monitoring the legalization of wagering on sporting events,” tribal attorney Seth Pearman told South Dakota News Watch.

“Sports wagering at the Royal River Casino would diversify the gaming opportunities for patrons, would positively impact their experience overall, and would keep them from leaving the area to legally place wagers.”

Chairman Troy “Scott” Weston of the Oglala Sioux Tribe warns that South Dakota and other states could use ballot initiatives on sports wagering as a means of expanding legal commercial gambling throughout the various states with tribal operations.

“Indian casinos are never going to survive,” he quips.

Navajo Nation The Navajo Nation Gaming Enterprise operates four casinos on the tribe’s sprawling reservation, one casino hotel in Arizona and three stand-alone casinos in Gallup, Farmington and Shiprock, New Mexico.

The enterprise has a strategy in place to proceed with sports wagering in both New Mexico and Arizona, which is in the midst of tribal-state compact negotiations.

“We see it as a great opportunity to create promotions and events to attract new players to the property,” says NNGE CEO Brian Parrish. “Then there’s always crossover play, which is a major benefit.”

Unlike Pueblo of Santa Ana, operators of the Santa Ana Star Casino, Navajo is not moving forward with sports betting in New Mexico until state regulators have established a regulatory structure.

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“The regulatory infrastructure for the state of New Mexico is just being developed,” Parrish says.

“Our feeling is rather than jumping in and pushing the situation, creating ambiguity or volatility in the situation, we want to work with the state to create the regulatory infrastructure that will help the state and help the tribes. We’ll build our program into that.”

Navajo has defined areas in both the Twin Arrows resort and the smaller operations to integrate betting facilities, video screens and food and beverage ventures. A kiosk will be provided in the smaller Shiprock facility.

The investment will range depending on whether state and federal law restricts wagering on tribal lands or allows mobile and internet wagering from off the property.

“We’re in rural locations,” Parrish says of the four properties. “We anticipate having a lot of betting on local and regional teams. That makes it harder to balance the money wagered on each side of the contest and mitigate volatility in payouts.

With a smaller operation like we are, that’s something to be mindful of.

“We’re going to be very competitive with the lines we offer, but we’re not going to be overly aggressive.”

Online wagering would significantly increase revenue, but the margin would remain small at 35 percent.

“It’s not such a big number that it will transform our business,” Parrish says. “But it will add value that we can use to create more jobs and more revenue back to the nation. The volume will go up pretty significantly.”

Preparing For Change NIGA’s convention and trade show this spring in San Diego will target strategies for smaller and mid-size tribal casinos, including methods of integrating sports wagering into a facility.

The debate will include European-style betting shops, says Skenandore-Thundercloud, “ideas that would work for a smaller tribe versus setting aside a big piece of the gaming floor and dedicating it to something like that.”

Shapiro is fairly certain that in one form or another—overcoming the regulatory, compacted and legal hurdles—sports betting will be a fixture in virtually every tribal casino in the country, big or small.

“There’s been an initial sort of rush since PASPA,” Shapiro says, “but sports betting is going to be around in this country for a long time.”

For more information or to subscribe to the database or monthly report contact Ashley Diem at ADiem@FantiniResearch.com or call +1-302-730-3793 - www.FantiniResearch.com FEBRUARY 2019 www.ggbmagazine.com

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MAKING MY POINT

Turtle vs. Hare A lumber showdown demonstrates preparation is king

L

ong before Mayweather-McGregor, long before King-Riggs, long before LincolnDouglas, long before Cain-Abel—well, OK, not that long ago—the greatest showdown that ever took place took place.

In the woods surrounding Lake Tahoe.

Two lumberjack outfits, one from the Pacific Northwest and one from the Rocky Mountains, found themselves toe-to-toe and axe-to-axe on a patch of grass where California meets Nevada.

Each wanted what the other wanted: to clear the path along the southern end of the lake, a path that would eventually become a trail, a trail that would eventually become Highway 50.

The forest, you could have said, wasn’t big enough for the two of them.

Now, it could have gotten ugly, what with all that testosterone and all those blunt instruments, but cooler heads, as they occasionally do, did prevail. It was decided that the best lumberjack from the Pacific and the Rockies would square off, and whoever cut down more trees before sunset would determine which crew would finish the job.

They called it the “Lumber-Off.” Because everyone giggled like teenage boys when they called it the other thing.

The Pacific crew picked Big Jack, who, unironically, was big. Huge. Like a Sequoia. He made Paul Bunyon look like a 98-pound weakling and Babe the Blue Ox look like a piglet.

“Do you know where Big Jack got started in this business?” the leader of the Pacific asked the leader of the Rockies.

“No,” he said, staring up at this monster before him.

“The Bonneville Salt Flats.”

“Wait a minute,” the leader of the Rockies said. “There aren’t any trees in the Bonneville Salt Flats.”

“There were before Big Jack got there!”

While the Pacific crew was hooting and hollering and high-fiving, one man stepped forward for the Rockies team. At least it looked like a man. Pale, scrawny, with pipe-cleaner arms and a Friar Tuck halo of hair on his head.

Skinny Jack was his name.

Had this been winter, and had the Pacific

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Global Gaming Business FEBRUARY 2019

By Roger Snow

crew laughed just a few decibels louder when they saw Skinny Jack, it would have triggered the biggest avalanche in the history of what’s now called Heavenly Mountain, and this story would have ended right then and right there, under a gazillion tons of snow.

But it wasn’t, so it didn’t, and with nine hours of daylight left, the competition began.

Skinny Jack swung his blade into the base of a tree, 10 times, 20 times, 30 times before it crashed to the floor of the forest. Big Jack? He stood there motionless, arms folded, holding the largest axe anyone had ever seen.

Which he wielded like a swordsman.

Whack, whack, whack! Three precise strikes and the tree toppled, sending the Pacific crew into a frenzy and the Rockies crew into a panic.

And it only got worse.

For every tree Skinny Jack knocked down, Big Jack knocked down five. After an hour, the rout was on.

To exacerbate his handicap, Skinny Jack would—without fail and without exception— take a break every 30 minutes. While Big Jack was clearing enough trees to make the Lorax cry, Skinny Jack would sit alone with his back turned. The other men could see he was doing something with his hands, and there seemed to be some friction involved, but nobody paid much attention. They were too busy watching and admiring Big Jack, thinking perhaps that joke about the Bonneville Salt Flats wasn’t a joke after all.

As the sun began its slow descent towards the horizon, it seemed it would soon set on both Skinny Jack and the Rockies crew.

But a funny thing happened on the way to the foregone conclusion. Trees that had taken Big Jack a minute to fell, were now taking five.

Then 10. Then 20. He was swinging with the same intensity as before, his muscles still busting out of his skin, still sounding his barbaric yawp with every blow he struck. He just wasn’t getting the same results.

Neither was Skinny Jack. Every time he came off a break, he got better. Much better. He was knocking down trees at three times his origi-

nal pace. Then five. Then 10. With dusk just a few hours off, he was closing the gap on Big Jack.

Skinny Jack kept doing what he was doing, taking a break every 30 minutes. And Big Jack kept doing was he was doing: trying harder, swinging harder, and even yawping louder.

As the two men cut their swath deeper into the forest, and the trees changed from Winter Firs to Ponderosa Pines to Quaking Aspens, Skinny Jack became more efficient, more productive, while Big Jack became less. “Try harder!” his teammates said. “Swing harder!! Yawp louder!!!”

He did, but it was no use. By the time darkness was upon them, the competition was over.

The accompli being fait and all, Skinny Jack calmly and quietly put away his axe, while Big Jack tried to bring down one more tree. But the edge of his blade was so dull, it bounded off the bark and hit him in the head. He fell face-first to the ground as Skinny Jack had his hand raised in victory.

While the Rockies crew was congratulating itself and the Pacific crew was consoling itself, one—and only one—man was curious enough to look at the area where Skinny Jack had taken all of those breaks. He expected to find some sort of energy substance or perhaps a voodoo talisman, anything that could have helped himself or hindered his opponent.

Instead, all he found was a stone. A hard stone that was chipped and jagged from a day’s worth of cutting something, of scratching something, of polishing something.

Of sharpening something.

And that’s when it all made sense.

For long-term success in any endeavor, you must continuously enhance your skills, your mindset, your understanding. Doing the same thing the same way will eventually stop working.

See the forest for the trees and sharpen your blade.

Roger Snow is a senior vice president with Scientific Games. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of Scientific Games Corporation or its affiliates.

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On a Run Tracking table games becomes easier with new products

By Dave Bontempo

“R

identification, an increasingly viable vehicle. GGS sees sensor and RFID technology as the path to give casinos a performance picture enhancing functions like table game performance, chip tracking and cage operations.

“RFID integration with Bravo Pit is the next big thing for us, given the growing demand for accurate data,” says Randy Knust, president of Genesis Gaming Solutions. “We are already seeing significant RFID adoption and believe that it will continue to grow over the coming years, especially given the improved RFID pricing in the marketplace.

“With the growing demand for accuracy and following the recent installation success by certain Caesars properties, we believe that RFID, in conjunction with Bravo Pit, will be at the forefront and heavily adopted in 2019, especially given the advancements made in reducing the cost of RFID chips.”

RFID has indeed come a long way. At one point it was considered difficult to work in casino environments. Bulky hardware and the clashing of signals at or near table games was cited. Yet that has changed, according to Knust.

“The technology has improved in recent years with manufacturers producing hardware that is more robust and accurate than ever before,” he says. “Today’s RFID readers and antennas have improved location sensitivity along with auto-tuning functionality. This enables large amounts of hardware to be strategically installed into tables with minimal ongoing maintenance.”

Chip quality has substantially improved, with the likes of Walker Digital PJM 3.0 tags delivering top read speed and reliability, he says.

More RFID chip manufacturers in the space add healthy competition, which in turn is bringing more affordability to the marketplace, he asserts.

While that unfolds, Genesis thrives with Bravo Pit, which contains an array of segments: “We have created a platform that gives casinos a variety of ways to enhance their table game operations, improving efficiency, player tracking and bet tracking,” he says. “The Bravo Pit system is at the heart of the tracking solution, fulfilling core fundamentals for table game Bravo Pit Watch module is the heart of the divisions looking for robust table management, player tracking and management software

un the table” boasts a new interpretation.

Its sports-world origin denotes a team that must beat a string of opponents to reach a playoff berth. Table games unfurled that equivalent in recent years, toppling demographic obstacles to regain prominence via bonusing, side bets, wild cards and progressives.

This was a great comeback for the classic brick-and-mortar sector once damaged by the ascent of slot machines and the mobile age. Table games own new significance, built on the back of multiple wagers, numerous variables and the rush of instant action.

The makeover was timely. A new challenge, and opportunity, has emerged. Gaming plays an industry wild card with the repeal of the Professional and Amateur Sports Protection Act opening the floodgates for sports betting by phone, tablets or in a book. Short term, that lessens table-game revenues. Yet long term, it may increase the gaming pool. Bettors of football and college basketball, using vehicles like in-game wagers and prop-tillyou-drop phone accessibility, could become new customers, anywhere inside the casino.

With football season ending, these players are candidates for the tablegame expanded menu. Side bets at table games spawn a win-win performance, with players enjoying their excitement and operators gaining an abundant house edge.

Vendors believe table games can serve the next wave of aficionados.

The new table age prompts technology that captures their habits, and reveals a future blueprint for promo offers, comps, meals and game platforms.

For operators, knowing this market has never been more important.

How they run the table has become as interesting as the games themselves.

Bravo!

Spring, Texas-based Genesis Gaming Solutions, involved in table game tracking technology and systems since 2000, has showcased a major catalyst with the Bravo Pit System. The signature table-game management and tracking product, now used by more than 500 casinos, debuted in 2004. It has evolved from a stand-alone electronic ratings program into a full-service system containing multiple applications.

The next innovation wave involves radio frequency 34

Global Gaming Business FEBRUARY 2019

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“The sensors, which are located beneath the table felt, identify when bets are made and hands are dealt. This delivers precise side-bet participation metrics as well as providing detailed analytics on dealer efficiency such as accurate hands-per-hour count.”

—Randy Knust, President, Genesis Gaming Solutions

player ratings and tracking. For those seeking more precise data, patented sensor technology embedded in the table has further expanded the system’s ability to accurately measure table game performance.

“The sensors, which are located beneath the table felt, identify when bets are made and hands are dealt,” says Knust. “This delivers precise side-bet participation metrics as well as providing detailed analytics on dealer efficiency such as accurate hands-per-hour count.”

With the new technology, properties can now capture more “slot-like” data across table games and cage operations, he says. Marketing and analytics teams will be able to evaluate performance and make more informed gamespecific decisions that will essentially improve the overall bottom line as well as the experience for players.

With RFID specifically, additional benefits can be realized across the property as the chips can be accurately tracked and monitored.

Toward that end, Genesis Gaming forged a working partnership with Aruze Gaming (distributor) for chips including RFID last year. Knust says the partnership gives the industry a complete RFID tracking solution that is secure, accurate and cost-effective.

This business approach acknowledges the significance of RFID and tries to reduce its cost. Money, especially the retention of it in one’s budget, talks.

The Viz Biz Developing an alternative to RFID costs has been an angle for San Diegobased VizExplorer, which helps organizations combine data sources from their systems to uncover actionable insight. It delivers a software platform and applications to provide deep analytical information.

Its latest catalyst is ChipVue, powered by ARB Labs. The product has been submitted to GLI, and will receive certification for Arizona, California, Connecticut, Louisiana tribal, Michigan tribal, Nevada, Ohio casino and Oklahoma Class III in February, according to company officials.

Jason Bonner, vice president of product management for VizExplorer, says his product does not utilize RFID, which he considers effective at curbing counterfeiting (even while noting that you can fool an RFID solution by putting a couple of fake chips below an RFID chip), but expensive and difficult to deploy across all games for the purposes of bet recognition.

“That’s an area where we are different,” he says. “The TableViz with ChipVue solution includes highly accurate camera technology and works with the operator’s existing rack of casino chips. It comes down to what the operator is trying to accomplish and what technology is the best fit.”

This is a joint hardware/software solution. Minimal ChipVue hardware is installed on every table. The package includes a chip tray with integrated op-

tical bet recognition devices, hand-count sensor, card reader, an LCD screen and a small server, unobtrusive to the dealer and players, that attaches below the table. From the software perspective, TableViz does the analysis and empowers the operator with unique insights not available for table games until now, Bonner asserts.

ChipVue provides an optical, bet-tracking table-game performance analysis. The product helps casino operators generate slot-like analytics for table games like blackjack and baccarat.

“VizExplorer and Arb teamed up to deliver a complete solution to operators seeking a real table game optimization solution,” Bonner says. “Arb provides the operational hardware used by the dealers, and VizExplorer provides the strategic tools to help make informed decisions leveraging all of the great, accurate data operators will now have access to.”

Some results have been stunning, he believes. Significant data has emerged over the rankings of premier players. Some heavy hitters, it turns out, are lightweights.

“TableViz with ChipVue has been deployed at a number of earlyadopter sites with exciting results,” Bonner asserts. “The solution has maintained over a 98 percent accuracy rate in capturing player bets, and has confirmed that a large variance exists between a player’s manual and actual rating. On average, this has impacted 90 percent of rated table game players, with their rating over or undervaluing their play by 100 percent. This means 90 percent of players aren’t receiving the right offer today, which is a big deal as it translates to maximizing table game profit.”

Bonner says the product has been endorsed by properties because “we’re solving the age-old table rating dilemma, which is a hot topic for properties that have a decent number of tables on their floor. Most database marketers ignore table players today due to the accuracy of manual tracking systems.

“We’ve received a lot of attention at trade shows where we’ve showcased the solution on the floor. Often our demo table has been swamped by casino staff that are amazed how the technology just works— and captures every bet accurately.”

Bonner touts TableViz as the vehicle to help operators capture the actual player bet, timing player and deciVizExplorer ChipVue hardware package sions per hour as a gameincludes a chip tray with integrated optical changer. bet recognition devices “It gives operators all the tools they need to optimize their table games,” he says. “They need to understand who their valuable customers are, what games they should have, where they should be located, and when they should have a dealer on the floor. Understanding the value of your table game players to inform offers to drive incremental visits is critical, but just one part of the larger story.”

Operators will have access to the performance of their tables to help them determine what games they should have on their floor. What are the best table game themes? What are the most successful side bets?

“With visibility into decisions per hour and the types of players that FEBRUARY 2019 www.ggbmagazine.com

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Konami’s SynkConnect cardless player tracking solution

frequent their tables, operators will be able to maximize dealer performance by matching their dealer to the situation on their floor,” he adds. “This is the solution you need if you really care about optimizing table games.”

Casino Connection Konami Gaming, the Las Vegas-based subsidiary of Konami Holdings, anticipates a first-quarter announcement of table-game enhancements to Synkros, its award-winning casino management system. That’s always an interesting development for a product already known for innovation regarding data collection, adaptable floor management, POS and hotel management.

The fourth quarter of 2019 was no exception.

The company was hailed for a product giving players a chance to connect to the table games.

Konami’s SynkConnect cardless player tracking solution was awarded a gold medal in the annual GGB Gaming & Technology Awards, recognizing the casino gaming industry’s best in innovation. SynkConnect delivers secure authentication methods to augment or replace a traditional player loyalty card, including via personal smartphone, fobs, a room key, wearables, etc. For tables, it could eliminate the need for a pit boss to manually enter player data at buy-in.

“Synkros has long been focused on delivering technology that enhances the guest experience while providing meaningful positive impact to the business,” says Jay Bertsch, vice president, global systems sales. “The way SynkConnect drives real-world convenience, adoption, engagement, data and value to help pioneer the next generation in player tracking technology is a reflection of Synkros’ enduring approach to new innovation and future development.”

By combing near-field communication (NFC) through a card reader, SynkConnect delivers a multi-channel solution for a number of authentication methods, from touchless mobile connection to the traditional card swipe.

Optimizing the Pit Tangam Systems, a leader in table games optimization software, deploys its products on over 5,200 tables in eight countries, officials say. The list keeps growing for the company, which launched its signature table-games yield management software product in 2010. It is based in Waterloo, Ontario, Canada.

The Table Yield Management suite helps casinos align their game-mix, product location, staffing and pricing to patron demand, resulting in increased productivity, improved Table Games EBITDA, and an enhanced guest experience.

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Global Gaming Business FEBRUARY 2019

It turns data into actions to optimize spread planning, game mix, and dynamic management for table games.

Another system for optimizing table-game yield is Gaming Floor Live from London-based TCSJohnHuxley. The Gaming Floor Live platform provides operators with real-time visibility and total control over the gaming floor by drawing data from every aspect of the table, allowing the opportunity to quantify every connected table and its devices.

“With GFL Optimisation, casinos can save time and money,” says Tracy Cohen, director of marketing for TCSJohnHuxley. “The system clearly indicates where operational attention is required the most by pulling data from the table in real time, allowing accurate up-to-date transparency of table operations.

“While this is important if you’re operating an average-sized European casino with 15-20 tables, in Asia and the U.S.—with their dramatically scaled table environments—incremental data is vital to making strategic minute-byminute decisions that affect the bottom line.”

Gaming Floor Live’s real-time insights and additional modules can increase a table’s hands/spins/dice per hour, customer engagement and bet frequency, and in turn help to drive revenue increases.

There’s always a niche beckoning those who wish to monitor the area where casinos made their first big imprint. With ICE London set to unfurl the 2019 majorevent schedule, companies have reserved their place at the tables.

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Cause& effeCt sports betting Will the legalization of to also legalize iGaming?

spur states

By Roger Gros

W

hen iGaming was legalized in Nevada (poker only) and then New Jersey and Delaware in 2013 (poker and casino), it was expected that other states would soon follow. But the relatively small markets in each of those states, combined with the technical and legal challenges of geolocation, payment processing, know-your-customer and more didn’t offer lots of guidance for other states to follow suit.

However, the legalization of iGaming in Pennsylvania in 2018, followed by its near-legalization in Michigan (see sidebar with Dave Waddell), now portends a bright future for online gaming and poker.

While the veto of the iGaming bill in Michigan might be only temporary, iGaming is on the upswing. There are now five years of scandal-free operations in the three states. It’s fairly clear what works and what doesn’t as pertains to technology regulations and taxation. Pennsylvania’s much higher tax rate might provide more data about whether the industry can be profitable with that rate.

And many believe the catalyst for quicker growth of iGaming is the legalization of sports betting. It’s quickly been proven that mobile wagering is the main driver of sports betting revenue. In Nevada, it accounts for more than 50 percent of sports wagers. In New Jersey, fully 72 percent of sports bets were taken from mobile or online sources. iGaming pioneer Sue Schneider believes that the legalization effort in Michigan was a result of the legalization of sports betting.

“There’s been some speculation that the overturning of PASPA may have a positive effect on iGaming in general,” she says. “Michigan’s experience shows that this may, indeed, be the case. As more states realize that online and mobile gaming is a product that people want (and that the controls for concerns like underage gaming and other issues are often more easily achieved than in a terrestrial environment, in most cases), I expect a comfort level to set in. And as revenues come to the states, it will finally catch on… something many of us have been awaiting for well over 20 years.”

Steve Ruddock, an iGaming analyst for several websites, including LegalSportsReport.com, says the next year will be interesting.

“How sports betting and online gambling will intersect in statehouses is the question of 2019,” he says. “It could go so many different ways, and precisely how the two issues mix will vary by jurisdiction. Sports betting could push online gaming to the side, which seems to be the case in New York. Online gaming could ride sports betting coattails in states looking to maximize tax revenue. Or, either issue could be used as a bargaining chip to gain support in states where neither measure could pass on its own accord.”

States Looking The legal iGaming industry in Pennsylvania is still not up and running. Ten casinos have been conditionally approved by the state for iGaming and two 38

Global Gaming Business FEBRUARY 2019

With sports books opening across the country, most states are also legalizing mobile sports betting that may translate later to full online casino gaming Golden Nugget is the market leader in New Jersey

out-of-state casinos—MGM and Golden Nugget—have applications pending.

But Pennsylvania’s high licensing fees—$10 million—and even higher tax rate on iGaming—an effective rate of 42 percent—make observers question whether the industry will be successful. A sports betting tax rate of 36 percent didn’t deter operators from setting up sports books, but it has yet to be determined if those operations will be profitable.

Ruddock says the unfavorable aspects of the law will make it difficult to make money in Pennsylvania.

“Those burdens have also turned off platform providers and outside entities that would have jumped at the opportunity to enter what is currently the largest legal online gambling market in the U.S., if its law was structured more like New Jersey or Michigan,” he says.

The vetoed Michigan bill had a much more reasonable tax rate and licensing fees, with a $200,000 application fee and an 8 percent tax rate (even lower than the tax rate for land-based gaming at 24 percent). Proponents of the bill said they set the tax rate low in order to allow the state’s online casinos to make a decent profit.

“At first blush, Michigan’s legislation looked to be well-crafted and ticks off three boxes every gambling expansion/reform measure should possess: provide strong regulations and consumer protections; support the state’s existing land-based gaming industry; and send revenue to the state,” says Schneider.

p. 38 igamingSportsbetting:Layout 1 1/10/19 1:51 PM Page 39

Status of Sports Betting Legalization in the U.S. 2019

“With a modest licensing fee, a single-digit taxrate, and no tax on free-play, companies will be beating down the door to gain access to the Michigan market. Those operators will have plenty of wiggle room to advertise and innovate.”

While the Michigan bill will likely be re-introduced into the next legislature featuring a more sympathetic governor, other states are already in line. Schneider says Michigan could still be the catalyst.

“There are a number of states that have dabbled with legalization for a number of years but haven’t brought it to fruition,” she says. “California is a perfect example of this. We’ve been watching efforts in Michigan for a number of years. Perhaps the successful launch (online and mobile) of the Michigan Lottery finally gave a comfort level to state legislators so that they could expand the offerings to other games. And, presumably, the industry must have come together to support these efforts.”

Ruddock says there are a few possibilities for legalization in 2019.

“The top candidates for online gambling legalization in 2019 are Illinois and West Virginia,” he says. “And there’s always the possibility of New York’s online poker efforts jumping back into the fray.

“Illinois and West Virginia are both looking for revenue and trying to figure out ways to bolster their land-based gaming industries.”

Schneider adds Connecticut to that list of states interested in legalizing iGaming, but adds that successful states legalizing sports betting must include mobile, which could lead to full iGaming.

“It seems that, given New Jersey’s experience where some 70 percent of revenues are coming via mobile, state legislators should take heed and move forward with adding mobile from the outset,” she says. “Mississippi is probably the only state which has exempted mobile, and I would think that they may fix that in the near future. And also, looking at the experiences of other states that have passed iGaming, it’s pretty clear that it has not cannibalized the clientele coming into the casino. In fact, some of the facts show that those new online clients may now be attracted to the land-based facilities.”

Looking at Lotteries While there are only a few states that have legalized the sale of online lottery tickets, there is a definite interest from state lotteries in iGaming. Ruddock says there’s a good reason for this.

“Online lotteries in states like Pennsylvania and Michigan already offer pseudo-online slots in the form of instant win games,” he says. In Pennsylvania, state casinos tried to shut down these games without success.

But Ruddock says in states where lotteries and casinos co-exist, there is bound to be some conflict if lotteries stray into the world of casino games.

“It would create vast regulatory issues,” he says, “the most obvious being, if both casinos and the state lottery are able to offer traditional online casino games, would gaming control oversee all of the operators, or would the lottery be omitted from gaming control’s oversight?

“As such, I would expect state lotteries to leave online casino games to

Source: Fantini’s 2019 National Legislative Preview

the casinos and focus on online lottery products and sports betting.”

In fact, in Rhode Island, the state lottery operates sports betting at parlors located in the state’s two casinos. The lottery also operates mobile sports betting on systems provided by supplier IGT. Schneider says there is no “one size fits all” model when it comes to lottery involvement in iGaming.

“The lottery involvement in iGaming will vary greatly state by state,” she says. “In some states, they may operate, in some regulate. We’ll probably see a lot of permutations. But, given the pressure to produce more revenues that most state lottery directors are under, we’ll see more states exploring this… especially those that may not have much in the way of a commercial or tribal casino infrastructure.”

GoinG Green New Jersey is the largest state with an active iGaming industry and stands today as the “gold standard” not only in regulations but also in increasing popularity of the business. Revenues have increased steadily over the last 36 months. In 2018—through November—iGaming revenues have soared almost 20 percent with more to come.

NEW JERSEY iGAMING REVENUES 2018* CASINO

2018

2017

% Change

Borgata

$49,042,288

$44,231,806

10.9%

Caesars Interactive NJ

41,118,560

39,200,857

4.9%

Golden Nugget

94,612,026

62,481,964

51.4%

Hard Rock

3,797,242

n/a

Ocean Resort

2,286,693

n/a

Resorts Digital

40,954,075

39,746,488

3.0%

Tropicana

37,881,755

39,187,222

(3.3%)

Total Casino Industry

$269,692,639 $224,848,337

19.9%

*Through November

FEBRUARY 2019 www.ggbmagazine.com

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Michigan Miss D

ave Waddell is a veteran gaming attorney in Michigan and a partner in Regulatory Management Counselors, based in East Lansing.

Waddell gives some behind-the-scenes observations about the passage of a bill legalizing iGaming by the legislature and the veto by outgoing Governor Rick Snyder, as well as the possible future of a revived iGaming bill.

GGB: Michigan has been considering iGaming for a few years, but the legislature finally pulled the trigger. Did that surprise you?

Waddell: It was not a huge surprise that a legislative compromise came together, as support had been slowly growing over time. The Michigan Lottery had moved pretty aggressively in adding online games with success, which eliminated some of the fear of the concept within the state. Additionally, there were multiple interests involved, each of which wanted different types of gaming legislation to pass (ADW for horse racing, charity gaming law amendments, and fantasy sports operators).

During the course of discussion on all these bills, it became clear that to get the needed votes, all the bills would need to be addressed at the same time. The “lame duck” legislative session (after the election) provided a good window to seek to finally get these bills passed. Thus, it was not a big surprise that the legislature acted during this year-end period to seek to address the concerns of all these various members of the gaming industry in Michigan. To us, the bigger surprise was that outgoing Governor Snyder vetoed the legislation in an apparent effort to protect the lottery from competition online.

It also appears that the proposed regulations are very favorable to companies that will offer the wager. The tax rate is even lower than in the physical casinos. How would that have impacted the companies and tribes that would have been eligible to offer iGaming in Michigan?

The lawmakers in Michigan did a very good job with regard to learning the dynamics involved with sports wagering and online gaming. They realized that to be competitive, a realistic tax rate needed to be utilized for these activities. The bill that passed both houses but was vetoed limited the eligible companies that can seek a license to offer iGaming to the three Detroit casinos and any Indian tribes located in Michigan that currently conduct Class III gaming. It also built in a 15-month period for the Michigan Gaming Control Board to develop and promulgate regulations governing the iGaming.

Under the bill, the operators would all have been able to offer iGaming throughout the entire state. Thus, there would have been a healthy level of competition between operators to try to establish brand-name recognition either by partnering with companies that have well-established brand recognition or by using their own brand.

We would think that companies offering iGaming in Michigan would likely be looking to partner with those that can help them win over the

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Global Gaming Business FEBRUARY 2019

largest customer base, and the tax rate was set at a rational level to allow for this to be done in a way that would lead to success to both the operators and their partners.

All of the operators were also hopeful that through cross marketing, they would have been able to generate additional casino visits to their brick-and-mortar casinos.

Do you believe Michigan will add mobile and online sports betting to its gaming options if the bill is considered again?

Despite the outgoing governor’s veto, there seems to be a widespread consensus that mobile and online sports wagering will be coming to Michigan. The iGaming bill that passed in Michigan but was vetoed provided, in part: “The division may permit internet gaming operators licensed by the division to accept internet wagers under this act on any amateur or professional sporting event or contest.”

In addition to the iGaming bill, the Michigan legislature passed another bill (also vetoed by the governor) that amended the Michigan Gaming Control Act stating that the 8 percent wagering tax imposed on iGaming will also be imposed on sports betting (presumably either at the casino or online). State Rep. Brandt Iden, who previously sponsored a bill that expressly authorized sports wagering, has gone on record saying he will reintroduce the bill in the next legislative session to provide a statutory framework for the sports wagering activity.

What does the potential future legalization of iGaming in Michigan mean for the legalization of iGaming in more states?

If the legislature takes action to re-introduce and pass the legislation that the governor just vetoed, Michigan could become a model state for other states to emulate when it comes to iGaming. With a new governor just taking office, and with a new crop of legislators also coming into office, it likely will take several months for the bills to be reintroduced and passed.

In developing the bills that were just vetoed, Michigan took a realistic approach in setting its tax rate to allow operators to be successful while generating additional revenue for state and local interests. Based on prior history, the Michigan regulators would be likely to make sure they use best practices when it comes to developing a practical, yet robust regulatory environment. Once other states see that iGaming can be introduced in a way that enhances the gaming experience and provides additional streams of revenue, it is easy to envision that other states will want to follow suit.

Thus, we believe that the legalization of iGaming in Michigan would likely lead to further expansion into other states.

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EMERGING LEADERS Glass Half Full Gena Caviness Auditor, National Indian Gaming Commission, Tulsa Region ena Caviness is no stranger to hard work, having begun her career at just 20 years old as a promotions representative for a small casino. Two years later, her responsibilities tripled when she found herself juggling work, school and motherhood.

Says Caviness, “It wasn’t always easy, but I tried to tackle every chal“It wasn’t always lenge that approached by staying positive, making the most out of the experience, and growing with it.” Her relentless optimism enabled her to easy, but I tried view such challenges instead as opportunities, and in time, she acquired to tackle every knowledge and experience on both the operations and regulatory sides of gaming, climbing the corporate ladder until she reached a managerial challenge that role in 2014 with the Cherokee Nation Gaming Commission. approached by A Cherokee citizen, Caviness credits her tribe for the invaluable exstaying positive, perience she gained, remaining ever thankful to such mentors at the Cherokee Nation Gaming Commission as Kelly Myers, Traci Asher and making the Jamie Hummingbird, who all taught her patience, gave her chances, and most out of the trusted her to make the right decisions. experience, and But the person who impacted her the most? Her sister, Jennifer Sanders, assistant athletic director for Tulsa Public Schools, someone growing with it.”

Caviness looked up to all her life, and who pushed her to excel. And with the added support of her husband, mother and children, Caviness has felt continually empowered to achieve her goals and advance her career.

Now with talented leaders such as National Indian Gaming Commission Chairman Jonodev Chaudhuri to look up to, Caviness is tackling her new position as auditor at the NIGC with the same determination and edge that has served her well for the past 13 years.

Known for her honesty, trustworthiness and optimism, her outgoing personality and propensity for voicing her opinion are both traits that have benefited Caviness despite her original lack of experience, and have gotten her on the road to senior management. Caviness has also benefited from taking on unconventional roles and stepping outside of the box, noting that such experiences have educated her on different aspects of the gaming industry.

Caviness continues to learn from those around her, and she takes pride in her ability to maintain both confidence and a positive outlook.

“There have been some challenging times in both my personal and professional life,” she says, “but keeping my head up, being true to myself and working hard have all kept me pushing on with my career.”

Her “everything happens for a reason” family motto has also played a part in her career choices, and whether good or bad, the decisions she made allowed her to grow and to learn. She believes, “There is a plan in place for all of us, and it’s just up to us to make the most of it.”

Caviness’ success has given her a natural passion for mentoring, as she loves sharing her knowledge of the gaming industry with other young professionals, her truthfulness about the hard work that goes into climbing the ladder being one of her main methods of support.

“I believe that providing people with expectations and challenges helps them prepare for the future and what’s to come,” Caviness says.

She was particularly excited to be named among the Emerging Leaders of Gaming “40 Under 40” Class of 2018-2019, calling the program “an honor that represents hard work and passion for the gaming industry.”

In looking back on her career journey, she offers advice to other eager, young professionals looking to move up. “It’s OK to be patient,” she says, “Listen to the leaders around you, and take chances. Those chances are what provide future opportunities.”

—Marie Casias, Manager, Marketing & Administration, The Innovation Group

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Gaming Law Leader Tamara Malvin Attorney & Partner, Litigation Practice Group, Akerman LLP amara “Tammy” Malvin is a partner at Akerman LLP with a focus on gaming and hospitality. Leveraging her base in South Florida, Malvin has expanded Akerman’s gaming practice over the last several years, focusing on casino and parimutuel clients in the United States and internationally. As an emerging leader, Malvin continues to build an extensive network of peers and industry contacts involving her in a myriad of professional associations and causes.

Malvin joined Akerman after receiving her law degree at the University of Miami School of Law following her undergraduate degree from Tufts University. Over the past decade, Malvin has worked extensively in federal, state and appellate courts in a variety of litigation matters, ranging from fiduciary duty claims to contract disputes to premises liability defense.

In addition to her courtroom advocacy, her clients turn to her for regulatory analysis and risk management advice. Malvin routinely defends foreign clients in the hospitality and gaming spaces facing lawsuits in the United States, and helps them to establish best practices. As gaming and hospitality become more dependent on technology-driven developments, Malvin has kept pace, expanding her credentials in cybersecurity and emerging technologies.

Malvin’s interest in gaming, and the parimutuel industry in particular, is no accident. Her father, Scott Savin, has been involved in Florida’s parimutuel slot industry since its inception, and has held senior positions at multiple Florida parimutuel facilities and racinos. While crediting her father as the

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Making the Magic Jennifer Kearns Executive Director of Marketing, Maryland Live!

Casino

quintessential mentor and Akerman for providing a supportive landscape, Malvin has forged her own unique path in gaming law.

Malvin considers the evolving nature of gaming law the most fascinating and rewarding part of her work. Assisting her clients in interpreting and influencing the literal “letter of the law” in gaming occupies much of her professional time. Malvin points to trends such as the convergence of online gaming and sports betting, and the regulatory challenges they present, as inflection points that will shape the industry for generations to come. The potential interactivity between federal and state law in this area will change the nature of gaming law, and Malvin is front and center in the discussion.

During her tenure at Akerman, Malvin has received notable honors including her distinction as a “Rising Star” in business litigation in Super Lawyers magazine in multiple years, and “Up & Comer” in Florida Trend’s “Legal Elite.”

Malvin chaired and presented the ABA Business Law Section program titled “Sports Gambling in America: Showdown at the United States Supreme Court” and its followup webinar “Sports Gambling in the U.S. in a Post-PASPA World.”

Additionally, she is a member of Global Gaming Women, contributed the Florida section of the Lex Mundi Global Gaming Law Guide, and co-authored an article published by Law360 on litigation avoidance tips for international hotel operators. Malvin is currently working on co-authoring a gaming law book for business attorneys and is slated to speak at several conferences in 2019.

Whether through her client representations, topical speaking engagements and publications, or ability to cultivate true and meaningful relationships, Malvin is leading by example. Her dedication to her clients, unique perspective and innovative thinking as an attorney, and commitment to progress in both law and gaming make her a true Emerging Leader of Gaming.

—Michael Soll, President, The Innovation Group

ennifer Kearns is the assistant director of advertising and partnerships at Live! Casino & Hotel in Maryland. She was recruited by Live! from Philadelphia’s SugarHouse Casino in January 2016 as director of relationship marketing, and to spearhead the launch of its customer relationship management (CRM) system. Since then, Kearns has proven herself to be a driven leader, quickly rising from her role as director to executive director, and then being promoted into “Finding a balance her current role in the summer of 2018.

After graduating from Hussian College in Philadelphia, between fiscal Kearns began her career working in graphic design and adversoundness and guest tising. She joined SugarHouse Casino as a member of the grand opening team, having only visited a casino once before. experience is Kearns immersed herself in all aspects of the casino’s opdifficult, but when erations, always listening closely to and learning from her colleagues as well as guests of the property. As a result of her achieved, results in paying close attention to customer feedback, as well as the guidance of more senior executives, Kearns quickly proa win-win for gressed through several roles including slots, VIP services, everyone.” casino host, CRM manager, executive host and casino marketing manager. Through a new CRM strategy, Kearns dramatically increased customer service survey scores, resulting in two consecutive years of quarterly max bonus achievement, property-wide.

Kearns ascribes her analytical personality to help drive her career development.

“Finding a balance between fiscal soundness and guest experience is difficult, but when achieved, results in a win-win for everyone,” she says.

She also credits mentor Penny Parayo, with whom she had the opportunity to work for two years at Live!, for teaching her about how to be a great leader and a positive mentor, and to always encourage others to strive for more.

Applying those lessons in her day-to-day activities, Kearns endeavors to continually pay it forward. For example, she works with her VIP services team and hosts, counseling them to find opportunities to take active leadership roles in projects that meet their skill set and interests.

An avid Disney fan, Kearns embodies the commitment of Live! parent company, The Cordish Companies, to create an unforgettable experience for guests, and has always tried to infuse that “magic” into every guest experience. She appreciates the freedom she has to exercise creative liberty and agility with her programming and enjoys being in a position to positively impact her local community.

For example, in 2017, with only two months’ lead time, Kearns planned and executed a silent and live auction, featuring hundreds of gifts donated from several regional partners, with more than 600 guests in attendance. Ultimately, the event grossed far more than expected, and Live! was able to donate a substantial portion of the proceeds to Toys for Tots.

Kearns believes that the passing of sports betting regionally, and the growth of social casinos will open doors for a younger generation of casino professionals who grew up “online” and with social media, and their comfort with technology and social engagement will position them as experts in these developing areas.

As an Emerging Leader of Gaming, Kearns hopes to be a role model for these future leaders, and is continually reminded to always challenge herself. Her advice: be kind and positive; always listen to what people are truly saying, and always take notes!

—Allison McCoy, Vice President, Business Development, The Innovation Group

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FEBRUARY 2019 www.ggbmagazine.com

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FRANKLY SPEAKING

by Frank Legato

Sammy Davis Meets John Bon Jovi

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hen I started doing this (whatever this is) in the mid 1980s, casino entertainment was fairly simple to explain. Sinatra, Sammy and the like were in the big showrooms, comedians were in the smaller showrooms, and there were revue shows featuring athletic women wearing large feathers.

That was about it.

But then, the baby boom generation took over the showrooms. Now, casino entertainment is all over the place with rock shows—at least one concentrating on a single, vile decade in the history of pop music; others a collection of “tribute” acts like those Beatles impersonators in period costumes; still other “residencies” like Elton John and Celine Dion at Caesars Palace.

Now that Celine and Elton are wrapping up their residencies, things are getting a little nutty in the let’s-pretend-we’re-still-young-by-clingingto-our-rock-music-like-grim-death genre of casino entertainment.

The latest entry in this genre is exemplified by how they rang in the new year at the Spa Resort Casino in Palm Springs, erstwhile home of Sinatra and Bob Hope (though in different houses). The Spa Resort featured a “Rockin’ ’80s New Year’s Eve Party” with ’80s lookalikes and tunes from Bon Jovi, Foreigner, Journey, Styx, REO Speedwagon, and... Oh, never mind. You get the drift. Big hair and monotonous synth bass.

I think they even had Duran. (They had wanted Duran Duran, but could only find half the band.)

There were... let’s see... 10 decades in the 20th century. I can’t think of a single one that is less suited for a showcase of pop music than the 1980s.

OK, Michael Jackson, Tom Petty and Elvis Costello did some good stuff.

Some Springsteen. And I kind of liked The Cars. But the rest was crap. I’d rather watch an Eddie Cantor tribute.

I apologize if I offend; it’s only my opinion. (Luckily, it’s also my column.)

This year, the rock residencies are getting crazy. According to Thrillist.com, new Las Vegas residencies for 2019 include Billy Idol—Las Vegas 2019 at the Palms, Britney Spears Domination at Park MGM, Aerosmith Deuces Wild, also at Park MGM, John Fogerty—My 50-Year Trip at the Wynn, and James Taylor—mercifully, just the name of the performer— at Caesars Palace.

The purpose of these residencies is partly to allow us, aging casino showgoers, to relive the music of our youth. But they also serve a purpose for the performers involved, who can stay in one place—instead of running around to catch private planes, or even, you know, walking across the street.

I mean, let’s admit it. Other than Britney, I’ve seen younger faces on cash.

But there they are, preserved as if in amber, to perform the roles of younger versions of themselves. And the better they are at that—some, like Fogerty, are freaks of nature—the more we like it.

In other words, expect more of the same.

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Guns ‘N Roses—DoRag. The Rolling Stones— Beyond the Grave.

The Who— Who’s Left.

The Grass Roots’ Midnight Confessions.

(Actually, I wouldn’t mind seeing that last one.)

Oh, and expect more of the rock tribute acts as well.

Some are very good. I remember enjoying the one Beatles tribute act I ever attended, even though the “John” guy was a little chubby and looked sort of ridiculous in the Sgt. Pepper suit. (To their benefit, I got no flak for referring to them in a column as the “Fat Four.”)

The tribute acts are still making their way through the decades.

As one more indicator of my age, there are now several Nirvana tribute bands—music my children would have heard when they were in high school (had I not trained them to listen exclusively to Bach, Mozart and Miles Davis). Pretty soon, there will be tribute-band tribute bands.

Of course, there is still a sliver of the old style of Las Vegas entertainment to be had. While some of it is in the form of tributes like the Rat Pack shows, there still is at least one living, breathing relic of the old days.

In January, Wayne Newton switched his retrospective show from the Bally’s showroom to Cleopatra’s Barge in Caesars Palace (a nightclub where I spent a few rum-soaked evenings over the years). While his voice is a few octaves lower than when he sang “Danke Schoen,” it’s still Wayne in the flesh—or as Doctor John used to say down in New Orleans, “in the meat.”

In the end, Wayne Newton is the only Vegas entertainment story appearing last month that would have made any sense to my 1985 self.

Hey, how about a Doctor John residency? Doctor John—In the Meat. Now that, I’d go see.

The American Gaming Association (AGA) is more than an advocacy organization.

The AGA is committed to delivering value for our members and the broader industry beyond advocacy with initiatives like AGA Elevate.

AGA Elevate is an interactive, educational peer exchange of information around critical gaming and business topics.

Through a combination of face-to-face and virtual learning opportunities, AGA Elevate offers year-round engagement experiences for actionable learning to promote comprehensive, problem-solving approaches that confront today’s challenges and prepare for tomorrow.

AGA Elevate is built around the following themes: AGA Elevate | Discuss and debate emerging trends, business growth and development and new or potential market expansion opportunities for the industry.

Topics include sports betting, esports, payments and more.

AGA Elevate | Explore opportunities to maximize operations through technology.

Topics include automation, robotics, the Internet of Things (IoT) and more.

AGA Elevate | Build and sharpen essential leadership and professional skills. Topics include strategic thinking, organizational productivity, emotional intelligence and more.

AGA Elevate | Promote expertise around crisis management and emergency preparedness. Topics include security threats, human rights, natural disasters and more.

To learn more about AGA Elevate programs and opportunities, please contact: Rachna J. Raniga, director, industry programs 202.552.8902 rraniga@americangaming.org

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NEW GAME REVIEW

by Frank Legato

Emerald Princess AGS

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his game, featured on the new AGS Orion Slant cabinet, is part of the Fa Cai Shu family of progressive slots, which means the top progressive jackpot can be linked to any other Fa Cai Shu games on the floor for a jackpot that grows rapidly. The top progressive in this link resets at $8,800, a nod to the Chinese lucky number 8.

The base game is a five-reel (four symbols per reel), 50-line video slot featuring three progressive jackpots—a Minor resetting at $50 and a Major starting at $500 in addition to the top Grand prize. A mystery feature in the primary game randomly causes all wilds on the screen to transform into full wild reels.

The progressives are won through a

randomly triggered picking bonus after a spin in which one or more wild symbols appear. This triggers a picking bonus screen displaying 12 coins.

The player picks until matching three coins corresponding to jackpots or three “Free Spin” symbols.

In addition to the progressive picking feature, the Free Spin bonus can be triggered with three or more bonus symbols in the base game.

This awards 10 free games, and the feature can be re-triggered with bonus symbols in a free game. During the free spins, all wild symbols carry multipliers.

Manufacturer: AGS Platform: Orion Slant Format: Five-reel, 50-line video slot Denomination: .01 Max Bet: 600 Top Award: Progressive; $8,800 reset Hit Frequency: Approximately 50% Theoretical Hold: 2.9%-13.87%

Smokin’ Hot Stuff Wicked Wheel Everi

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his latest game in Everi’s series based on Warren Kremer’s “Hot Stuff the Little Devil” comic book character utilizes the supplier’s new marquee-style Empire 5527 cabinet—the numbers indicate the 55-inch size of the giant flatscreen monitor and the 27-inch main game screen.

The “Wicked Wheel” in the name refers to a giant top-monitor wheel used in a picking bonus that can result in one of six levels of progressive jackpots. The base game is a five-reel scatterpay video slot, with no paylines and wins registered by adjacent symbols. This array features 243 ways to win on every spin.

During the base game, when a Hot Stuff symbol is part of a winning combination on reels 2, 3 or 4, it multiplies the winning pay by 2X, 3X or 4X. There are two separate bonus events involving the big wheel.

Three bonus symbols trigger the Wicked Wheel Bonus, in which the wheel displays bonus awards ranging from 1,600 credits to 8,000 credits, plus the four top progressives—the Major resetting at $40, the Mega starting at $100, the Ultra resetting at $800 and the top Grand, resetting at $10,000.

The Progressive Pick Bonus can be triggered randomly after any base game spin, triggering a picking bonus that can lead to

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one of the six progressives—the top four plus the Minor progressive resetting at $20 and the Mini resetting at $10. When the random bonus is triggered, a field of 25 coins is displayed on the screen. The player picks until matching three progressive prizes or revealing a pitchfork to end the bonus.

Manufacturer: Everi Holdings Platform: Empire 5527 Format: Five-reel, ways-to-win video slot Denomination: .01, .02, .05 Max Bet: 320 Top Award: Progressive; $10,000 reset Hit Frequency: 31.45%-35.98% Theoretical Hold: 2%-12%

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GOODS&SERVICES AGS TO ACQUIRE INTEGRITY GAMING

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aming supplier AGS had two big announcements last month.

First, AGS announced it will acquire Integrity Gaming Corporation, a Vancouver, Canada-based route operator with a footprint of 2,700 Class II and Class III games in Oklahoma and Texas, for a cash payment of $49 million, or 46 cents per share. The price includes repayment of $36 million in outstanding debt for Integrity.

The transaction is expected to be funded with cash on the balance sheet and to close in the first half of 2019, subject to approval by Integrity’s shareholders, receipt of applicable regulatory, court and third-party approvals, and other customary closing conditions.

In fiscal 2017, Integrity generated revenue of approximately $16 million and pre-synergy EBITDA of approximately $9 million. As a result of revenue optimization and other efficiencies, AGS expects that adjusted EBITDA will grow at approximately 15 percent on an annualized basis, beginning in fiscal 2019.

Integrity owns slot machines manufactured by various slot suppliers, including AGS, in approximately 30 tribal casinos in Oklahoma and Texas, and also offers direct sales of other gaming products and supplies.

The second announcement was an agreement for AGS to provide third-party slot content to the Rank Group covering its Mecca Bingo and Grosvenor Casino brands.

Under the agreement, AGS’s iGaming Platform will provide the Rank Group with an aggregation solution, as well as access to AGS’ full library of content partners, including more than 600 games from developers like 1×2 Gaming, Ainsworth Game Technology, Gaming Realms and Reflex Gaming, among others.

JCM ISSUED PATENTS FOR FUZION

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eading transaction technology supplier JCM Global has received additional patents for its innovative Fuzion slot technology, which adds kiosk-like capabilities to slot machines.

JCM has been aggressively pursuing comprehensive patent protection on the Fuzion system, and U.S. Patent No. 10,140,817 is the latest in a long line of patents JCM has earned for its groundbreaking products.

JCM executives accept gold medal in GGB’s Gaming & Technology Awards

Fuzion was first unveiled to the gaming industry at the Global Gaming Expo 2017, and earned immediate and widespread accolades from attendees for its abilities to greatly enhance functionality at an electronic gaming machine, including a gold medal in GGB magazine’s Gaming & Technology Awards.

2018 and is expected to grow to $108 million by 2020 and $208 million by 2021.

With Grand Casino, which later became Lakes Entertainment, Berman was a pioneer in the Indian gaming industry, developing Grand Casinos in Minnesota, as well as casinos in Mississippi and elsewhere. In 2016, Berman’s Lakes Entertainment merged with Golden Gaming to form Las Vegasbased Golden Entertainment Inc. Berman remains a director of the company and a minority shareholder.

Allied Esports is well-known in the esports sector, having developed the HyperX Esports Arena in Las Vegas. WPT, which stages the World Poker Tour, an event co-founded by Berman and formerly part of Lakes Entertainment. According to the report in the Star Tribune, Allied Esports Entertainment will use efforts pioneered by WPT, including in-person experiences, multi-platform content creation and interactive services to gain ground in the esports industry.

BERMAN FORMS ESPORTS COMPANY

SCIENTIFIC GAMES, HASBRO EXTEND LICENSING AGREEMENT

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aming legend Lyle Berman, co-founder of Grand Casinos Inc. and a member of the American Gaming Association’s Gaming Hall of Fame, has formed a new company to take advantage of the burgeoning business in esports.

Lyle Berman Berman formed a specialpurpose acquisition company based in Minnesota, Black Ridge Acquisition Corp., to acquire World Poker Tour (WPT) Enterprises and the assets of Allied Sports International. The merged company, to be called Allied Esports Entertainment, will trade on the Nasdaq exchange under the symbol AESE. Black Ridge will acquire Allied Esports International from China-based Ourgame International Holdings. The new company will issue about 11.6 million shares, valued at $118 million, to Ourgame, plus additional warrants and $50 million in milestone payments. The debt and equity deal is valued at $213.8 million by Thomson Reuters.

Berman, a director of Black Ridge, is expected to be chairman of Allied Esports Entertainment.

Frank Ng, CEO of Ourgame, is expected to be named CEO of AESE. The new company will have a presence in Minneapolis but will move its headquarters to Irvine, California, and will initially have 100 employees, according to the Star Tribune.

The combined revenue for WPT and Allied Esports International will be about $35.1 million in

cientific Games Corporation has extended its long-term license agreement with Hasbro, Inc. and Hasbro International, Inc. through 2025 for the exclusive use of Monopoly and more than 15 other iconic game brands.

“Since 1998, Scientific Games has worked collaboratively with Hasbro in using the Monopoly brand as a pillar for innovation, leveraging its popularity to become one of the industry’s top game brands,” said Scientific Games President and CEO Barry Cottle. “This new agreement signifies the strength of a great collaboration and celebrates the global endearment of the Monopoly brand as a leading slot brand and the top-selling licensed brand for lottery tickets.”

The new extended agreement runs through 2025 and enables Scientific Games to use Monopoly-branded content, and games based on many of Hasbro’s iconic and extensive line of household favorites such as Game Of Life, Battleship, Clue, Ouija and Yahtzee globally, and Scrabble in the U.S. and Canada. The terms allow these gaming brands to be used for slots, systems, online digital gaming, lottery, social casino, e-tables, and expand the usage rights to include table games.

FEBRUARY 2019 www.ggbmagazine.com

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PEOPLE AGA OFFICIALLY NAMES MILLER PRESIDENT AND CEO

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he American Gaming Association’s board of directors officially named veteran Capitol Hill lobbyist Bill Miller as the trade association’s new president and chief executive officer, effective January 14, followBill Miller ing a comprehensive search and selection process.

Miller is the third CEO of the main trade association of the U.S. casino industry, replacing Geoff Freeman, who resigned to accept the top post at the trade association for the grocery industry. Freeman had succeeded founding chairman Frank Fahrenkopf.

During his tenure as senior vice president at the Business Roundtable, Miller helped grow the organization’s brand and advocacy footprint in Washington, leading the association’s outreach to Capitol Hill and the presidential administration.

A broad, seven-member search committee was formed in June, led by Tim Wilmott, CEO of Penn National Gaming and chairman of the AGA Board of Directors.

SCIENTIFIC GAMES ANNOUNCES KEY PROMOTIONS

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cientific Games Corporation announced three executive promotions to solidify the company’s leadership team.

Jim Kennedy, currently executive vice president and group chief executive, lottery, will become chairman, lottery; and Patrick McHugh, who currently serves as senior vice president, global lottery systems, has been elevated to Kennedy’s former post.

Jim Kennedy

Jordan Levin

In addition, Jordan Levin has been named the new executive vice president and group chief executive, digital. Levin has extensive experience in interactive, digital gaming and sports betting, and is

currently senior vice president for corporate development, where he led the acquisition and integration of NYX Gaming Group and previously launched and served as president of SG Interactive.

SBTECH NAMES ISAACS NON-EXECUTIVE CHAIRMAN

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ondon-based SBTech, a leading sports betting and gaming technology supplier, has appointed former Scientific Games CEO and Vice Chairman Gavin Isaacs as its new non-executive chairman.

Isaacs, who joined SBTech in January, will use his 20 years of gaming experience across a series of senior management positions to further grow the company’s rapidly expanding U.S. presence. Since the market opened in mid-2018, SBTech has completed and gone live with several partnership agreements with leading casinos in Gavin Isaacs regulated states including New Jersey and Mississippi.

Isaacs spent four years as CEO and board member of Scientific Games and was responsible for championing game-changing mergers and acquisitions and growing the global lottery and gaming supplier from $1.3 billion to $2.9 billion in revenues in just two years, before moving to the position of vice chairman of the board.

MGM NAMES NEW CITYCENTER, EMPIRE CITY, BEAU RIVAGE LEADERS

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GM Resorts International has named a trio of industry veterans to head its CityCenter resort complex in Las Vegas, the Beau Rivage in Biloxi, Mississippi, and its newest acquisition, Empire City Casino in Yonkers, New York.

Steve Zanella took up the post of president and chief operating officer of CityCenter on January 1, assuming duties that include daily operational oversight of Aria Resort and Casino and the non-gaming Vdara Hotel & Spa and providing strategic direction for both properties.

He succeeds Bobby Baldwin, who announced his retirement in October after Steve Zanella 18 years with MGM. Prior to joining CityCenter, Zanella was president of MGM’s Core Properties group in Las Vegas, which includes New York-New York, Luxor,

Excalibur, Circus Circus Las Vegas and the new Park MGM, where he played a key role in the transformation and retheming of the resort, formerly the Monte Carlo.

At Empire City, Uri Clinton, a longtime gaming attorUri Clinton ney specializing in the Northeast market, will serve as the first president and CEO under MGM’s ownership.

MGM announced its acquisition of the racino and harness racing complex just outside New York City in May, and expects to close on the Travis Lunn $850 million purchase in the next few months under terms that call for MGM’s majority-held REIT partner, MGM Growth Properties, to own the land and buildings and lease their operations back to MGM. Clinton joined MGM as a vice president and deputy general counsel in 2014 and helped lead the company through its exploration of a number of development opportunities in Connecticut and New York. He was promoted to senior vice president and legal counsel in 2016 and moved into global development for the company last year.

At Beau Rivage Resort & Casino in Biloxi, Mississippi, Travis Lunn has been named president and chief operating officer. Most recently, Lunn was general manager and senior vice president of operations at MGM Grand Las Vegas. Lunn’s gaming industry career began at the Golden Nugget Las Vegas. Prior to joining MGM Resorts, he served as vice president of operations at the Hard Rock Hotel & Casino in Las Vegas and as general manager of hotel operations at the Venetian and the Palazzo resorts.

GGB

February 2019 Index of Advertisers

AGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 AGEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 Agilysys . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Fabicash . . . . . . . . . . . . . . . . . . . . . . . . . . .31 Fantini Research . . . . . . . . . . . . . . . . . . . . .31 GLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 Greenberg Traurig . . . . . . . . . . . . . . . . . . .25 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 JCM Golf Tournament . . . . . . . . . . . . . . . .29 Konami . . . . . . . . . . . . . . . . . . . . .Back Cover Merkur . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 National Indian Gaming Association . . . . . .37 Novomatic . . . . . . . . . . . . . . . . . . . . . . . . .17 RPM Advertising . . . . . . . . . . . . . . . . . . . .10 Scientific Games . . . . . . . . . . . . . . . . . . . . .11 Southern Gaming Summit . . . . . . . . . . . . .41 UNLV Foundation . . . . . . . . . . . . . . . . . . . .33 World Game Protection . . . . . . . . . . . . . . .51

FEBRUARY 2019 www.ggbmagazine.com

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CASINO COMMUNICATIONS

Q

&A

Tony Rodio

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ony Rodio joined Affinity Gaming in late 2018, directly after directing the sale of Tropicana Entertainment to Eldorado Resorts. At Tropicana, Rodio increased overall financial results with net revenue increasing more than 50 percent through both operational improvements and further expansion into regional markets. Rodio also has experience with Harrah’s Entertainment and Hollywood Casinos. At Affinity, Rodio takes the helm of a company that operates 11 casinos, five of which are located in Nevada, three in Colorado, two in Missouri and one in Iowa.

He spoke with GGB Publisher Roger Gros from the Affinity Gaming offices in Las Vegas in December. To listen to the full podcast of the interview, where Rodio talks about the individual properties, his strategies and the potential for sports betting at the regional properties, visit GGBMagazine.com.

GGB: Tell us about the sale of Tropicana Entertainment to Eldorado Resorts. Why did you get back into the business so quickly after the sale closed?

Rodio: Well, it was a six-month process,

from the time the transaction was announced until the time it closed. The Eldorado folks were wonderful. They offered me a position to stay on. But I thought it was time for me to move on.

I’m too young to retire. I love the industry; I’m passionate about it. So, I felt like I had one more good run in me, and this was one of a number of opportunities that I looked at. This one seemed to fit me best.

What was it about Affinity that really attracted you?

I think there are a lot of similarities between Affinity today and where Tropicana was 50

Global Gaming Business FEBRUARY 2019

Chief Executive Officer, Affinity Gaming

when I first got there, seven or eight years ago—a regional gaming company, operations throughout the Midwest, and no real cohesion within the company. I really look to draw from my experience at Tropicana of building a company and creating a new culture, and discovering some new ways of looking at things—with a fresh set of eyes.

You worked for a pretty demanding billionaire in Carl Icahn at Tropicana. Now you’ll be working with another one, Jim Zenni, the head of Z Capital, which is a majority owner of Affinity.

There are similarities, and there are some differences. Tropicana was publicly traded, but Mr. Icahn owned 80 percent of the company, so there was only one vote that mattered. So, for all practical purposes, it was privately held.

They’re both very passionate, obviously both great investors. I think the difference is, Mr. Icahn didn’t get involved in the day-today operations. Given how this company has been operating before I got here—it was four or five months without a CEO—Mr. Zenni was, in essence, the CEO. So, he’s much more intimately aware of each of the properties, each of the businesses, and the positives, the negatives, and what we need to do to move forward. So, that is a big difference. He’s passionate about it, I think his leadership is certainly a big support, and you know, he’s looking for us to grow the company.

In that sense, they’re both identical. They want me to add value. That’s why I’m here.

Affinity has so many different parts, not an overarching brand and diverse operations.

Well, they are diverse. I’ve now visited each and every business, and they are unique in the customers that they serve, the markets that they operate in, and the size of the facilities.

Some of our properties have hotels, some

don’t. But the philosophy that I used at Tropicana is going to be the same philosophy that I use here, which is a little different than previous management. I believe in more of a decentralized model. I will give a lot more autonomy to the general managers and the local business leaders. And I think it certainly plays well with this company, because they are so diverse. What works at Primm, at Stateline, isn’t necessarily going to work at Rail City in Sparks, outside of Reno. So, I’m getting to know each of the businesses, and again, we’re going to operate in a more decentralized function.

What do you consider the strengths of the company at this point?

I’m pleasantly surprised by the strength of the corporate staff and the management teams at each of the individual businesses. The GMs that I’ve gotten to know, I think they all do a great job. We’ve brought in some additional talent to support the people that are already here: Eric Fiocco is on board and we’re bringing in the CFO from Tropicana, Joe Long, as well.

So, the talent that was here, and really long-term loyal employees, interact with customers, and you can see that it’s a family atmosphere, in those respects.

How about the shape of the properties? Do you need a little more capital investment, or were they in pretty good shape?

They’re in good shape from a physical standpoint, but similar to what I did at Tropicana— and I think what’s incumbent upon all of this in this industry—we have to diversify the experience. You no longer can just offer slot machines and table games. We have to look for opportunities and ways to partner with brands, and to diversify the experience. It’s more challenging in smaller, regional markets, but there are definitely little things that we can do to tweak the experience and add new amenities.

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