Gaming America Jan/Feb 2021 by Gambling Insider

GamingAmerica.com

Jan/Feb 2021

Game Plan How New Jersey has drafted an effective blueprint for gaming success in the US

• CONVENTION CROSSROADS IN LAS VEGAS

• POST ELECTION GAMING PREDICTIONS

• ATLANTIC CITY'S EVOLVING C-SUITE

• THE SANDS: A STORIED CELEBRATION

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COO, EDITOR IN CHIEF Julian Perry EDITOR Carl Friedmann Carl.Friedmann@gamblinginsider.com Tel: +44 (0) 207 739 9908

EDITOR’S LETTER

SENIOR STAFF WRITER Tim Poole Tim.Poole@gamblinginsider.com STAFF WRITERS Owain Flanders Owain.Flanders@gamblinginsider.com Iqbal Johal Iqbal.Johal@gamblinginsider.com Ezra Amacher Ezra.Amacher@gamingamerica.com Peter Lynch Peter.Lynch@gamblinginsider.com LEAD DESIGNER Laura Fogar DESIGNER Olesya Adamska DESIGN ASSISTANTS Radostina Mihaylova, Aleksandra Cakikj, Veronika Fukita, Inna Shtereva MARKETING & EVENTS MANAGER Mariya Savova FINANCE & ADMINISTRATION ASSISTANT Dalia Ambrazaite IT MANAGER Tom Powling COMMERCIAL DIRECTOR Deepak Malkani Deepak.Malkani@gamblinginsider.com Tel: +44 (0)20 7729 6279 US BUSINESS DEVELOPMENT MANAGER Aaron Harvey Aaron.Harvey@playerspublishing.com Tel: +1 702 425 7818 US ACCOUNT MANAGER Erica Clark Erica.Clark@playerspublishing.com Tel: +1 702 430 1912 EVENTS SALES MANAGER Ryan Horwood Ryan@globalgamingawards.com +44 (0) 208 638 7610 SENIOR ACCOUNT MANAGER William Aderele William.Aderele@gamblinginsider.com Tel: +44 (0)20 7739 2062 ACCOUNT MANAGERS Michael Juqula Michael.Juqula@gamblinginsider.com Tel: +44 (0)20 3487 0498 Clive Waite Clive.Waite@gamblinginsider.com Tel: +44 (0)20 7729 0643 Nitesh Patel Nitesh.Patel@gamblinginsider.com Tel: +44 (0) 207 739 5768 Martin Dilleigh Martin.Dilleigh@gamblinginsider.com Tel: +44 (0) 203 435 5628 SENIOR ACCOUNT EXECUTIVE Sam Ford Samuel.Ford@GamblingInsider.com Tel: +44 (0) 207 739 9918 Joe O'Halloran Joe.OHalloran@GamblingInsider.com Tel: +44(0) 207 613 5863

JULIAN PERRY, COO, Editor in Chief

CARL FRIEDMANN, Editor

As stand-up comedian Dave Attell once said, “You know what I always say: New Year, new toothbrush.” While that sentiment might not be shared with you or anyone you know (hopefully not) we are hopeful for a fresh start after 2020. So far it’s been a mixed bag with a pandemic still raging and an unsettling political landscape. Despite a rocky start, there are some positives from which to draw inspiration. Most notable is our cover feature on the feel-good comeback story we all need right now. New Jersey has been headline news for years in terms of its motivation to turn gambling into a win-win, and with insight from The Innovation Group and the AGA, we examine this proverbial phoenix, starting on page 16, as it experiences a renaissance that brought in a record handle of $996m at sportsbooks in December, bringing the state’s annual 2020 handle to more than $6bn. Overall, the state itself generated $50m in tax revenue from sports wagering last year. Nothing to sneeze at. But if these numbers and trends are what other states are seeing and trying to emulate, a greater share of the country will inevitably catch the fever; New York, Colorado, Indiana, Pennsylvania and California already have the sniffles. Not to sound biased, but we have even more good things to tell about New Jersey. On page 24, we feature a couple of prominent leaders in Atlantic City. It just so happens they’re both women. This isn’t breaking news or some antiquated notion of a cultural or industry revolution (or revelation) but Borgata president & COO Melonie Johnson and Ocean Casino Resort CEO Terry Glebocki are shining examples of how to apply patience and perseverance in equal measure to ride out the pandemic, and come out of it stronger than before. But we can’t get ahead of ourselves, as we’re still in the throes of lockdowns, case spikes and vaccine admin, not to mention a new administration in Washington settling in. We’ll see how the New Jersey momentum builds across the country as democratic leadership interprets gambling opportunities. We also have to consider how the death of Sheldon Adelson might influence the Republican minority and its approach to gambling initiatives. He leaves the GOP without a primary source of donations that were integral to the party’s former success. We’re talking over $500m to campaigns and super PACs since 2010. There are a lot of moving parts still in play for US gambling. As much as it might hurt to admit, we could all benefit if we fall in line behind New Jersey.

CONTRIBUTING THIS ISSUE

CREDIT MANAGER Rachel Voit WITH THANKS TO: Brandon Walker, Bill Pascrell, Christopher Justice, Brian Wedderspoon, Doug Haddon, Joe Pappano, James Brendel, Ryan Reddy, Oliver Lovat, Jim Allen, Melonie Johnson, Terry Glebocki, Thomas Zitt, Brian Wyman, Jessica Feil, JeffSilver, Greg Gemignani, Patrick Sullivan Gaming America magazine ISSN 2632-766X Produced and published by Players Publishing Ltd All material is strictly copyrighted and all rights reserved. Reproduction without permission is forbidden. Every care is taken in compiling the contents of Gambling Insider but we assume no responsibility for the effects arising therefrom. The views expressed are not necessarily those of the publisher.

JIM ALLEN

CEO Hard Rock & Seminole Gaming

MELONIE JOHNSON

President & COO Borgata

READ EVERY EDITION ONLINE FOR FREE AT GAMINGAMERICA.COM

CONTENTS  06

FROM THE TOP

With New Jersey’s gaming figures for November showing huge sums, Tim Poole looks at the numbers consistently setting the bar in the Garden State.

TRANSITION TEAM EFFORT

Industry experts from Global Payments Gaming Solutions, Crane Payment Innovations, Sightline Payments, SuzoHapp and IGT discuss the appetite for contactless payments at land-based venues, and if the pandemic has accelerated its importance.

Dickinson Wright’s Jeff Silver, Of Counsel, and attorneys Greg Gemignani and Patrick Sullivan speak about severing ties with 2020 and assessing prospects during a new administration.

HARD ROCK HUDDLE

HIGH WIRE ACT

REVIVAL

SETTING THE EXAMPLE

WHERE THERE’S SMOKE Ezra Amacher examines the ongoing debate of whether smoking in casinos has overstayed its welcome, or if it’s still a fix to help maintain a bottom line.

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SANDS OF TIME Ezra Amacher pores over UNLV gaming historian David Schwartz’ book on the Sands and how the property anchored itself in Las Vegas royalty before its ultimate demise.

Tim Poole speaks with Borgata president and COO Melonie Johnson, and Ocean Casino Resort CEO Terry Glebocki, two of Atlantic City’s leaders at the forefront of gaming’s resilient stand during COVID-19.

2021: THE SPORTS BETTING OUTLOOK Brandon Walker, head of Amelco USA, gives his sports betting industry predictions for 2021, focusing on how player habits will change in the US.

With contributions from The Innovation Group and the AGA, we profile the revitalization of New Jersey’s gaming industry – a recovery that was far from certain not long ago.

POWER OF THE PEOPLE If you take gambling out of Las Vegas, the city would probably survive. Conventions are a different story. Oliver Lovat, of the Denstone Group consultancy, takes a deep dive into post-pandemic realities.

In December, G2E hosted a webinar on the post-election landscape for the gaming industry. Ezra Amacher analyzes what was discussed and what it means at the state and federal levels.

IN-PLAY HERE TO STAY Swedish start-up Triggy is expanding its personalized in-play sports wagering app to the US market as bettors are forced to consider new ways to engage.

Jim Allen, CEO of Seminole Gaming and chairman of Hard Rock International, reflects on 2020 with the GI Huddle and advises caution ahead.

ON TAP

FULL SPEED AHEAD Bill Pascrell, III, partner at Princeton Public Affairs group, gives an overview of what we can expect to see in the US sports betting market in 2021.

PRODUCT REVIEW Gaming America looks at the latest and most exciting innovations in gaming to be rolled out in 2021, as casinos and suppliers keep adapting to the new normal.

FROM THE TOP

FROM THE TOP: BREAKING RECORDS With New Jersey’s gaming figures for November demonstrating monumental sums, Tim Poole takes a closer look at the numbers consistently setting the bar in the Garden State. It's no wonder operator 5Dimes wants to enter the regulated sports betting market after years of offshore activity. Just look at the results being produced in New Jersey on a monthly basis, where a new record is broken with seemingly every new financial report. Back in September, black market brand 5Dimes reached a $46.8m settlement with the US Government, announcing its intentions to suspend US operations from 21 September and relaunch as a regulated sports wagering operator. In a past issue of From the Top, we analysed the media’s role in not promoting offshore operators like 5Dimes, inspired by an open letter from American Gaming Association CEO Bill Miller. His main message was that if players are not educated about 6 GAMINGAMERICA

the nature of illegal operators, not only are players left at risk but there is less of an incentive for companies to follow the law. The media’s role is understandably an important one, especially when national outlets possess such a wide reach. But another huge incentive for any business is, of course, profit. And November’s gaming figures for New Jersey offered perhaps the single biggest reason any offshore operator should turn to the regulated market. Sure, total gaming revenue was down to $288.9m, but only by 6% year-on-year, remarkable in itself considering Atlantic City casinos are operating at a restricted capacity. Online gaming win was $91.8m, almost doubling, while sports betting revenue was 9% up to $50.6m. Retail casino win was down 35% to $146.6m, showing just

FROM THE TOP

how much of the Garden State’s legwork is now being done by online wagering. New Jersey is at a point when online gaming forms just under a third of revenue and sports betting (predominantly online) forms around 17%. For the year to date, New Jersey gaming’s $2.57bn generated – most of it during a global pandemic – is 19% down. But online gaming revenue is up 101% to $870.9m, with sports betting revenue sitting at $332.1m, 23% up. And that’s without even mentioning New Jersey’s incredible sports betting handle, which is what really shows off the strength of its regulated market. In November, the Garden State very nearly saw $1bn in sports betting handle. In total, $931.6m was wagered on sports, with $872m of that coming digitally. For the year to date, $5.02bn has been bet on sport in New Jersey, and again it’s worth emphasizing this is in a year when a large share of sporting events were either postponed or cancelled. So why wouldn’t an offshore operator like 5Dimes be tempted into the regulated market when faced with a proposition like that? Crucially, these are numbers that will only grow with time. While the illegal market is still taking the majority share in the US, it’s also clear New Jersey is getting something right as it sets the bar so high. As we’ll explore in our cover features this issue, it’s a model other states can follow. Analysts have long championed the theory behind New Jersey’s fair tax rate and gaming framework. Now, though, the numerical evidence backing up that theory is unequivocal, especially the tax dollars collected during a time when any government would grasp new sources of revenue with both hands. Assessing individual properties, Fantini Research data shows that each Atlantic City online offering saw huge yearly uptake. Hard Rock and Borgata rose almost 200%, Resorts Digital was up 91%, Caesars and Ocean grew more than 70%, Tropicana 66% and Golden Nugget, generating the highest total, 37%. That revenue is incredibly timely when you consider all but one legacy casino saw table hold fall (only Hard Rock saw a 19% rise). Sports betting wise, all but three brands saw yearly growth: Resorts, Bally’s and Hard Rock. Yet these three all dealt with sixfigure totals, so high percentage falls constituted small actual totals. Elsewhere, Borgata generated a 5% growth and everyone else enjoyed a double-digit increase. Meadowlands, which grew

67%, generated $24.8m with FanDuel and Resorts Digital, which grew 60%, amassed $14.6m with DraftKings. What more of an invitation could ambitious brands need than the evidence of FanDuel and DraftKings’ success – even when all taxes and regulatory costs are added into the mix? For a long time, betting analysts have promoted New Jersey as a shining example of getting the legalization of online gaming and sports betting right. Never before have they been more vindicated, however, even if this is something they might have all foreseen. Another question this raises is perhaps how many antigambling policymakers can be swayed by such statistics? States that haven’t yet embraced sports betting (fewer these days) and online gaming (still plenty) might find themselves feeling more persuaded during a global pandemic, when they see just how much legal business is being conducted in New Jersey. Other states, too, are seeing soaring numbers, although New Jersey’s regulatory mix – tax rate, convergence between land-based and online, support from the New Jersey Division of Gaming Enforcement – have made it the poster child of regulated US gaming since PASPA was overturned. Perhaps the biggest indicator of a turning tide is in neighbouring New York, where Governor Andrew Cuomo recently spoke of sports betting in a more positive light than ever before. Kambi CEO Kristian Nylén once told Gaming America it was only a matter of time before mobile sports wagering landed in New York. That moment has still yet to arrive, with consistent opposition from lawmakers and namely Cuomo himself. And yet, with a torrid 2020 almost over, Cuomo uttered the words “how about sports betting?” when exploring how to create $15bn in revenue to shore up a widening deficit. Naturally, this was far from a green light for lawmakers or sports betting campaigners. But from one of mobile wagering’s biggest opponents? It was significant. State governments considering legalization of online gaming and sports betting may still be unsure when it comes to responsible gambling, and that in itself is a whole new conversation. Thanks to New Jersey, though, they will be convinced of the pastime’s popularity, its tax-generating potential and that a fair regulatory framework is far more effective than a restrictive one. Records will continue to be broken.

“ONLINE GAMING WIN FOR NOVEMBER WAS $91.8M, ALMOST DOUBLING, WHILE SPORTS BETTING REVENUE WAS $50.6M. RETAIL CASINO WIN WAS DOWN 35% TO $146.6M, SHOWING JUST HOW MUCH OF THE GARDEN STATE’S LEGWORK IS NOW BEING DONE BY ONLINE WAGERING.”

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DICKINSON WRIGHT

TRANSITION TEAM EFFORT  Dickinson Wright’s Jeff Silver, Of Counsel, and attorneys Greg Gemignani and Patrick Sullivan discuss severing ties with 2020, and assess the lay of the land in a new year and a new administration. Nobody was able to predict anything about 2020, but in the hopes of bringing some clarity back into our lives this year, I will try to discern how the Biden administration will view the gaming industry. Although there was more than $1bn wagered on the Presidential election by foreign nationals, President-elect Biden himself doesn't appear to have a personal appetite for gambling. Unlike Donald Trump, who has owned casinos and currently has real estate investment in Las Vegas (Trump Tower), President-elect Biden’s recent and frequent trips to Nevada were strictly campaign events, soliciting support from union members and pointing out how stimulus funds had been held up by his predecessor. At least for those in the hospitality industry, the focus of these visits underscored the desperation of beleaguered workers whose lives have been decimated by 8 GAMINGAMERICA

resort and restaurant closures, and convention and special event cancellations leading to dramatic declines in visitor volume and gaming revenues. The consensus was that President Trump understood and had empathy for brick-and-mortar casino operators like himself. However, it’s expected that the Biden administration would be more vocal about the plight of the average worker. That attitude will certainly be a mixed-bag for the gaming industry. Of greatest immediate importance to the resort sector is whether there will be a mandate to impose a national lockdown on non-essential businesses. While in most jurisdictions, liquor stores and marijuana dispensaries were deemed to be essential, as readers may recall, the casino industry was clothed by Washington bureaucrats in the trite and discredited, “sin industry” apparel.

DICKINSON WRIGHT

Surprisingly, casinos, with remarkable economic contributions to state economies, were not deemed essential. They were purposefully omitted from the initial guidelines for the $2trn Cares Act funding, and it took some forceful lobbying efforts by the American Gaming Association and individual gaming companies until the authors of the eligibility requirements partially relented. Even with that, Payroll Protection Plan (PPP) distributions were only allowed to the smaller and mid-sized properties. While some tribal casinos resisted closures based on their sovereign status, thankfully, some of the initial Cares Act funding also went to Tribal Governments in the form of block grants, which in some instances could be passed on to their tribal gaming outlets. Will a Biden administration be able to break the logjam on additional financial assistance? The most recent proposal currently under consideration is for $908bn, far less than amounts bandied about in late summer. The proposed new “stimulus” provides some relief in the form of unemployment compensation benefits for furloughed workers and a supplemental $300 per week stipend for four months, but the draft did not contain a forgivable PPP loan component, except for small businesses with fewer than 300 employees that have suffered revenue declines of 30% or more. One of the biggest concerns for the Biden administration will be the national economy. He inherited the remnants of a bustling business climate, and although there is rhetoric about a nationwide mask mandate, for that reason alone, it’s unlikely that a Biden administration will impose a nationwide lockdown on casinos, especially now with a vaccine beginning its distribution. However, that doesn’t mean that occupancy restrictions or selective closures will not continue, as these measures originate from directives by State Governors as they perceive the need to address health concerns within their borders. As an example, Nevada’s Governor continued 25% capacity restrictions for casinos and required reservations-only for in-person dining at area restaurants through mid-January 2021. On a worldwide basis, casino revenues have shown some slight improvement. But revenue numbers are dramatically lower than 2019. Most significantly impacted is the VIP side of the business. While most travel restrictions have been lifted between the Peoples Republic of China (PRC) and its satellite Macau, and considering the strident relationship between the Trump administration and the PRC, it may take some time for the governments in both nations to allow for the free-flow of gaming customers. While everyone expects President-elect Biden to attempt to improve relations between the two countries, at least for the foreseeable future, travel to the United States by PRC residents, including prized VIP customers, will not resume any time soon. It’s likely that other worldwide visitation will be similarly sluggish as international airline flights slowly readjust and COVID-19 travel restrictions are re-examined. Las Vegasbased casino companies with properties in Macau may find

some needed relief for their bottom lines as Macau slowly returns to its pre-COVID-19 pre-eminence.

MINIMUM WAGE, MAXIMUM IMPACT As mentioned earlier, the Biden administration’s emphasis on the worker could pose a difficult financial burden on the gaming industry. President-elect Biden pledged to raise the minimum wage to $15 per hour. Many casino jobs and those in the service sector are supplemented by customer gratuities and for that reason, employees are paid substantially less. A $15 minimum wage will mean an immediate jump from the current $9 an hour minimum wage in Nevada ($8 if health insurance is provided), making it nearly twice as costly to provide the same level of service to its customers, especially in a resort setting. Added to the total will be increased employer contributions for Social Security, workman’s compensation, health insurance, meals and many other benefits, which are predicated on total wages. The result will be a brick-and-mortar gaming industry either scrambling to adjust to lower profit expectations or actions to reduce full-time equivalents (FTE), perhaps using more part-time workers without benefits. We have already seen the automation of lower skill jobs at fast-food restaurants and kiosks used for hotel check-in that can handle the entire process, including ending of the room key. What is certain is that resort operators will lean more heavily on the available online activities for gaming revenue.

HIGH WIRE ACT From 1961 to 2011, the US Department of Justice (DOJ) through the Office of Legal Counsel, maintained that the Federal Wire Act, which prohibited interstate transmission of wagering information, applied to all forms of gaming including wagering on all sporting events and contests conducted in interstate and foreign commerce. Despite this broad interpretation, the DOJ applied the Wire Act nearly exclusively to bookmakers and sports betting activities, asserting that, with notable exceptions in 2011 when operators in the offshore poker industry were charged (Black Friday), the reason for non-enforcement was based solely on a lower prosecutorial priority. However, also in 2011, the DOJ recognized that a few courts were beginning to take exception to the DOJ’s expansive reading of the Wire Act. Consequently, the DOJ reversed their prior stance by affirming that the Wire Act only applied to sports wagering in interstate and foreign commerce. That view persisted until late 2018 when in a tortured opinion from the Office of Legal Counsel, the DOJ reversed its 2011 stance back to the view that it held beginning in 1961 when the Wire Act was first adopted, making transactions using electronic communications illegal even where the bettor and betting service provider were in the same state. This caused an uproar among state lotteries, which could no longer rely on the 2011 opinion to conduct remote intrastate lottery product sales. Cheered on by other online interests, they challenged the 2018 GAMINGAMERICA 9

DICKINSON WRIGHT

opinion in a New Hampshire Federal District Court, which ruled in their favor, confirming at least for that judicial circuit that the DOJ’s 2018 rewrite was flawed and the Wire Act only applied to sports wagering. The DOJ has since appealed that decision. However, it’s anticipated that the Biden administration, under new leadership, will both rescind the 2018 opinion and withdraw its appeal. This should provide a clear path for expanded use of internet communications for other gaming products such as intrastate online games, interstate online games (other than sports) where conducted by licensed gaming operators in each state, and expanded uses of interstate-wide area progressives by commercial and tribal gaming operators.

KEY DRIVERS With expanded gaming nationally following New Jersey’s successful effort to invalidate the Professional and Amateur Sports Protection Act, there will be increased pressure on the DOJ to use its enforcement powers to limit the market presence of illegal bookmakers; as legal operators are becoming significant contributors to state economies, particularly in the recent economic downturn. With more states legalizing that form of gaming, regulated sports wagering handle in October 2020 alone was $3bn, the highest it has ever been. And despite the economic downturn, each month seems to produce new wagering records. Because these new legal sports wagering options seemed to have captured the interest and excitement of so many US customers, we can expect to see some increased effort by the DOJ in the next administration to enforce existing federal laws against foreign sports wagering operations that flout US law at the expense of legitimate regulated gaming markets in the US.

TRIBAL CONSIDERATIONS The Biden Presidential campaign included a promise to appoint Native Americans to high-level government positions; but at press time, he has yet to name his pick for Secretary of the Interior, which is a pivotal role for Native Americans, or Assistant Secretary-Indian Affairs (AS-IA), a job which also includes running the Bureau of Indian Affairs. A Native American has never served as Secretary, but Mr. Biden is under great pressure from Indian Country to name Native American or Alaska Native individuals for both roles. Former AS-IA and Chickasaw Nation citizen Kevin Washburn, the Dean of the University of Iowa College of Law, is running Mr. Biden’s Interior transition team, and is well-versed in Indian gaming as he previously served as the General Counsel to the National Indian Gaming Commission. Of primary interest to Indian country is the US Supreme Court’s 2009 Carcieri v. Salazar decision, which disallowed the United States from accepting new trust land for many tribes. The decision disqualified tribes that could not document that they were a recognized Indian tribe since the1934 enactment 10 GAMINGAMERICA

of the Indian Reorganization Act. President-elect Biden has repeatedly expressed support for a “clean” legislative fix that would not impose additional conditions on tribes seeking gaming approvals. A new trust-land policy will immediately impact at least one major tribal gaming project, the Mashpee Wampanoag Tribe’s proposed casino project in Taunton, Massachusetts. In 2015, the Obama administration placed the casino site into trust status and declared it eligible for gaming. In 2018, the Trump Interior reversed the decision. The Tribe sued the Department, but earlier this year, Interior declared it was planning to record transfer of the land out of trust, revoke the reservation proclamation, and annul the gaming eligibility determinations. In June, a federal court ordered Interior to reconsider and enjoined its decision to take the land out of trust. Under Democrat control again, the agency will likely drop its litigating position and reissue the decision, allowing the project to go forward. However, administrative trust land acquisitions are always subject to litigation threats, and a more “originalist” Supreme Court may determine that Interior’s interpretation falls outside the boundaries of its Carcieri decision.

LIVING IN A FANTASY If you ask the daily fantasy sports (DFS) industry, they will tell you they are strictly skill-based and not engaged in gaming. However, the IRS recently issued two memos stating that chance pervades, making the entry fees received from players on DFS activities subject to taxation because they are gambling. A federal excise tax has long been imposed on gaming with three original exemptions for table games, slots and pari-mutuel racing, and later in the 1980s for state lotteries. For all other gaming activities, particularly sports wagering, there’s a .25% federal excise tax on the betting handle. However, if the activity has not been authorized by the state, the excise tax is 2%. As an example, the Attorney General of Texas has declared that DFS is gambling and is therefore illegal under Texas statutes. To the extent that other states have not acted to license DFS, the 2% tax could be imposed, but at the very least, the IRS would claim that the .25% excise tax would be owed. This is the predicament in which DFS finds itself, and although there’s still the possibility of settlement or a tax court reversal, it’s highly unlikely the Biden administration will intervene. The gaming industry is very nimble and can always find a way to work well with any Presidential administration. The challenges faced by the gaming sector have more to do with the health risks caused by COVID-19, the impact of a weaker economy on disposable income, the recovery of the transportation industry and the willingness of people to congregate in large groups at event settings. We have already seen there is pent-up demand to enjoy life to the fullest, an outlook impervious to federal policy decisions but driven by conquering our own insecurities, real or imagined.

SEMINOLE HARD ROCK

A year of caution Jim Allen, CEO of Seminole Gaming and chairman of Hard Rock International, speaks to Tim Poole about 2020 and looking ahead as part of the GI Huddle podcast What are your reflections on such a tumultuous and challenging year for the gaming industry? Well, I think your adjectives are certainly appropriate. Obviously, COVID-19 changed the way we look at business, in any sector. When we think about the hotel, casino and most importantly the restaurant business, they were probably the three hardest hit categories. There are also airlines and cruise ships, so it’s been a real challenge. But the good news is business is coming back from the casino side. Restaurants are still extremely challenged, but we continue to move forward, as most important is the safety of our guests, employees and members of the Seminole Tribe. How does Seminole Gaming look ahead to 2021, given recent vaccine news, pent-up demand and uplift in gaming levels? One of the tremendous assets of the Hard Rock brand is its global footprint, being in 76 countries around the world. So until we see the airline industry, tourism and travel start to rebound in a healthy way, I think we need to be very cautious. Markets like here in South Florida, where I’m based, are a little bit more regional, with Florida having 21 million people in the state. I think that business model can remain moving in the proper direction, with one trying to be somewhat optimistic. But certainly in destination locations like Times Square, New York, we’re still closed at the moment. The hotels are nearly empty, there’s not much airlift and the district is closed until further notice, so we are extremely concerned about that business on a long-term basis. Focusing on your mention of caution, how do you exercise that on a day-to-day basis, and when it comes to short-term and medium-term planning? I think all businesses now, and some operators better than others, are looking at margins and fixed costs such as labour, rent, trying to work with our landlords; trying to recognize it’s a two-way street. It’s about looking at all those overhead challenges and how can we be smarter. Utilizing technology, certainly in the Cafe division, things like Uber, Grubhub and delivery are some of the tools we’re trying to utilize. 12 GAMING GAMINGAMERICA AMERICA

On a more positive note than any pandemic-related discussions, we spoke at the Global Gaming Awards Las Vegas 2020, where you won Land-based Operator of the Year and Property of the Year with the Guitar Hotel in Florida. How hopeful are you of a strong year for the Guitar Hotel in 2021? Certainly COVID-19 has hit Florida like all other states. But from a business perspective, Governor [Ron] DeSantis is still trying to keep an open mind to allow businesses to stay open without tremendous restrictions. The hotel is meeting or actually exceeding our expectations from a profitability standpoint, though traffic counts are certainly down from where we had hoped, based on foot traffic and tourism into Florida and South Florida. When it comes to other Seminole and Hard Rock properties in 2021, what are your general hopes? We think there are some bright spots starting to develop but I think 2021 will be a year of caution. We do believe 2022 has some real upsides though, as you mentioned, assuming the vaccines have proper distribution, what percentage of the population is going to take the vaccine, and what happens with the perception from the media around COVID-19. A lot of those things need to fall into place. Unfortunately for others but somewhat good for us is a lot of other restaurants are closing permanently. In many cases, we hear up to 60% of restaurants that were open pre-COVID will not be in existence by the start of 2022. We know we will close some of our locations permanently but the majority of them will be open. Therefore, maybe we can reap the benefits of less competition in certain marketplaces. Do you have any new developments in the pipeline and, if not, is that a result of the current climate? Interestingly enough, that’s the one division that is extremely busy. There has been zero slowdown with deals in the hotel area and zero slowdown with our casino and destination resorts. I will tell you that we’re not looking to open any new Hard Rock Cafes domestically. But on a global basis where we would normally open 15 to 25 in a high year, those numbers have probably come down to 10 to15.

POST-ELECTION LANDSCAPE

HIGH WIRE ACT In December, G2E hosted a webinar on the post-election landscape for the gaming industry. Ezra Amacher analyzes what was discussed and what it means at state and federal levels as a new administration gets sworn in. The world’s focus turned even more to the United States last November as the country voted for its next President, Joseph Biden. Though the election itself earned the lion’s share of attention, the gaming industry was eager to follow Congressional and Senate races, which would determine control of the nation’s Capitol, as well as state and local elections with potentially significant implications for individual markets. To break down the election results, Global Gaming Expo partnered with the American Gaming Association (AGA) for a G2E Insider Live Webinar, “What’s Next: The Post-Election Landscape and Implications for Gaming.” Moderated by the AGA’s Chris Cylke, the panel methodically broke down the election’s impact at the national, state and tribal level. At the time of the webinar on 10 December, control of the US Senate remained in the balance pending the results of the Georgia Senate runoffs in the first week of January. Even without 14 GAMINGAMERICA

knowing who would possess a majority in the Senate, the 2020 election offered some clear takeaways for our industry, beginning with the new President’s attitude toward gaming-related issues. The most significant influence Biden might have over the gaming industry is his administration’s stance on the Federal Wire Act. Created in 1961, the original Wire Act prohibited all forms of interstate gambling as a shield to prevent the mob from betting on rigged sporting events. In 2011 the Department of Justice (DOJ) clarified the act, stating: “Interstate transmissions of wire communications that do not relate to a sporting event or contest fall outside the reach of the Wire Act.” This paved the way for Nevada and New Jersey to legalize online poker, and for New Jersey, Pennsylvania, West Virginia and soon Michigan to allow online casinos. But two years ago, under President Trump’s Attorney General William Barr, the DOJ reversed the 2011 decision, arguing

POST-ELECTION LANDSCAPE

that the Wire Act’s prohibitions are “not uniformly limited to gambling on sporting events or contests.” That led the New Hampshire Lottery Commission to file a suit against Barr in the First District Court of Appeals seeking to vacate the most recent DOJ ruling. Then in June 2020, a three-judge panel heard arguments on the scope of the Wire Act. A verdict is supposed to arrive in early 2021, but the untimely death of Judge Juan Torruella could complicate things if and when a ruling is delivered. The court case could all come to nothing if Biden’s Attorney General pick decides to drop the DOJ’s position. Biden said on the campaign trail that he disagrees with the Trump administration’s reinterpretation of a more stringent Wire Act. Biden’s DOJ could also potentially ask to dismantle the Wire Act altogether. “Joe Biden is from a gaming state, the state of Delaware, which has sports betting at three different properties,” said Todd Webster, principal at Cornerstone Government Affairs and former Chief of Staff to Delaware Senator Chris Coons. “That will inform his perspective, his outlook, and should be more receptive to the gaming industry.” By loosening or even flat out disassembling the Wire Act, the Federal Government would be in effect granting states permission to move forward with online poker and casinos, which draw on interstate play. It would be easier for states with online gaming to share player data with another as well. While the AGA is in favor of a more relaxed Wire Act, it sees some drawbacks to the Federal Government getting overly invested in gaming regulation. “While there’s clearly some upside potential for creating efficiencies across the industry as we do approach a more national marketplace for sports betting, there’s also some significant downside risk to inviting any kind of federal legislation that touches on gaming,” Cylke said. “I’d imagine that the posture of the industry will continue to be focused at the state level on getting sports betting authorized and to put off a big federal discussion around amendments to the Wire Act or any other federal legislation until a later date.” The big action in the next few years is almost certainly to come at the state level, where two dozen state legislatures are set to consider a sports betting bill of some form. Phil Cox, co-founder of bipartisan government and public affairs firm 50 State, said there’s a pathway toward legalization in about half those states. “The bottom line is that states are looking for new sources of revenue,” Cox said. “For new sources of revenue that haven't existed before, in a lot of these states it really comes down to two things: one is marijuana, and we’re seeing a lot of action on that, and two is gaming. Those are both fairly limited in scope when you're dealing with multi-billion-dollar budget gaps. They can only get you so far.”

New York Governor Andrew Cuomo raised eyebrows in December by floating sports betting as a potential way to shore up $50bn in debt between state and local governments. Cuomo’s comments sent off a frenzy of speculation that New York could be the first of the ‘Big Four’ – Florida, California and Texas the others – to legalize online sports wagering. The late Las Vegas Sands Corp. CEO Sheldon Adelson was keen for Texas to support casinos and sports betting. Adelson invested millions in Texas races during the 2020 election cycle to ensure the Republican Party held on to its majority in the legislature. With political victory secured, Adelson deployed an army of lobbyists to the Lonestar State in hopes of persuading lawmakers to bring full-scale gaming to a conservative market. Adelson’s efforts didn't appear to be making enough inroads, according to Cox. “My read right now, and I’ve talked to the Governor about this, is he could potentially go along with it,” he said. “He doesn’t love it, but he could go along with it. The issue is the Lieutenant Governor, who has a lot of influence in the Senate, and is not in favor right now and will likely block it.” In the short term, sports betting legalization faces a more realistic path in Connecticut, Massachusetts and Ohio, where lawmakers have previously come close to passing bills. The biggest wild card of the 2021 legislative sessions may be whether southern states like Georgia, Florida and Alabama inch closer to legalization. The success of Tennessee’s online sports betting market could influence lawmakers in neighboring states to take a closer look. The 2020 election also held major implications for tribes, who will feel more empowered with Biden in the White House and Native American Deb Haaland leading the Department of Interior. “By and large Indian country supported Biden because of his extensive tribal agenda,” said Aurene Martin, president of Spirit Rock Consulting. “I think what tribes saw in Biden was a return to normalcy. They are familiar with him from the Obama administration.” Another encouraging development is new bipartisan leadership for the US Senate Committee on Indian Affairs. Alaska Republican Senator Lisa Murkowski will head the committee with either Brian Schatz of Hawaii or Nevada’s Catherine Cortez Masto. Martin said the committee will raise support for tribal COVID-19 relief funds and bring attention to tribes’ business operations, including gaming. “There hasn’t been a lot of activity in the tribal sphere on gaming issues in recent years,” Martin said. “I don’t know that we’re going to see a lot of change on that.” After a historic election that saw Americans turn out to vote in record numbers, the hope among gaming leaders is that Washington will return to a more traditional way of operating. Slim majorities in the House and Senate, and a moderate president, could do away with some of the hyper-partisanship that has defined the Government over the last dozen years. GAMINGAMERICA 15

16 GAMINGAMERICA

NEW JERSEY GAMING

REVIVAL With contributions from The Innovation Group and the American Gaming Association, Tim Poole profiles the revitalization of New Jersey’s gaming industry – a recovery that was far from certain in the not-too-distant past.

As detailed in this issue’s From the Top column, New Jersey gaming is currently thriving. Online gambling and sports betting growth statewide is such that land-based casino revenue declines – unavoidable due to the COVID-19 pandemic – are being almost completely offset. Before coronavirus, New Jersey was on a sharp upward trajectory – and since, it has done as well as any other major gaming jurisdiction to stand tall during such an unprecedented era. Given the restrictions and limitations imposed by a global pandemic, the performance of Atlantic City casinos has been extremely strong on a relative scale. But there was a time when such financial solidity was nowhere near guaranteed. While executives we have spoken to have pointed out “rags to riches” is perhaps an unfair reflection – Atlantic City has traditionally been the second-biggest US gaming hub after Las Vegas – it’s no secret the Garden State has undergone a complete revival over the last few years. If you think gaming percentage falls have been bad during COVID-19, just think how much higher they would have been had the pandemic hit a decade ago, when New Jersey gaming had a far bleaker outlook. In many ways, a fairer comparison would look at New Jersey before coronavirus, when it was leading regulated gaming’s charge across the US. Even during the pandemic, though, records have tumbled for its digital casinos and sportsbooks; a feat it would have been difficult to foresee during a period when property closures were the biggest news items on Atlantic City’s agenda. So how did the jurisdiction turn things around and recover so well? And can the region offer a blueprint to other states looking to generate extra tax revenue to help recover from the devastation of COVID-19?

AN ALL-TIME LOW In examining the New Jersey story, several key factors stand out, like the overturning of PASPA, the role of the regulator and the rise of online gaming. But to fully understand the

state’s recent journey, we must first ascertain exactly where New Jersey gaming was historically. At The Innovation Group, Thomas Zitt, EVP and Brian Wyman, SVP, operations & data analytics, have collaborated with Gaming America to evaluate New Jersey’s modern history. Following positive projections in the 1990s, they conclude that by 2006, the market’s downward trend meant a confidence crash. Initially, the outlook for New Jersey’s gaming hub was positive from the mid-1990s, when gaming revenue was in the $3.5bn range through the mid-2000s and a high water mark of $5.2bn was reached in 2006. According to The Innovation Group, much of the lift during this period resulted in substantial capital investment in the market, disproportionately stimulated by Borgata’s market entry in 2003 as the region’s first modern destination resort, whose president & COO, Melonie Johnson, features later in this issue. A 7.5% market lift that year can largely be attributed to the property. But as Zitt and Wyman tell Gaming America, the reality of future regional competition subsequently set in: “Concerns about the market were most substantial as Pennsylvania began opening properties in 2006. This new competitive market next door resulted in a 4.6% decline that year and a 5% decline the following year. 2006 ultimately was followed by 10 consecutive years of decline exacerbated by the Great Recession beginning in 2009, and then Maryland and New York City opening their first casinos between 2010 and 2012. “During these years of competitive expansion, The Innovation Group predicted the market would drop by nearly $1.5bn to $3.8bn as a result of initial competition from Pennsylvania, New York and Maryland. But then came the Great Recession, and by 2015 the full impact of regional competition and economic devastation was felt. 2014 brought the closures of the Atlantic Club, Showboat and Trump Plaza, and the proverbial nail in the coffin came in September 2014 when Revel, meant to be the new shiny object in Atlantic City, closed its doors. Declines of 14.7% in 2014 and 21.3% in 2015 left GAMINGAMERICA 17

NEW JERSEY GAMING

Atlantic City gaming revenue at a mere $2.4bn, a more than 50% decline from its 2006 peak of $5.2bn. Confidence in the market was at an all-time low.” It is perhaps poetic that Revel has since been reborn as the Ocean Casino Resort, now under the leadership of Terry Glebocki, who will also feature later in this edition. In our US CEO Special in the fall last year, Glebocki spoke of Ocean’s revival, something that has mirrored the wider New Jersey recovery. And yet, as The Innovation Group’s research shows, New Jersey’s odds of rising above its neighbors as a beacon for regulated gaming looked rather slim 15 years ago. Contrast that near-$3bn revenue drop to the state’s latest figures and you paint an entirely different picture.

PASPA: A BRIGHT SPOT FOR THE ENTIRE INDUSTRY So where did the recovery begin? Was it when PASPA was overturned in May 2018, the most historic event in modern US gaming, which paved the way for the legalization of sports wagering? Thanks to the campaigning of then-New Jersey Governor Chris Christie, among others, it was not as though this landmark event happened overnight. Several executives have spoken to Gaming America about following this case throughout and judging the mood enough to expect a positive outcome, thereby being ready to launch as soon as possible. The success of sports betting markets across the US since has

THOMAS ZITT

18 GAMINGAMERICA

BRIAN WYMAN

demonstrated the ruling’s significance, despite the gavel only landing two and a half years ago. “The overturning of PASPA has been a bright spot for the entire industry,” comment Zitt and Wyman. “We’ve gone from commentators subtly dancing around betting lines to a media frenzy around sports wagering. Ten years ago it was inconceivable there would be betting-oriented segments on SportsCenter or programming on The MSG Network focused on in-game wagering. New Jersey certainly benefitted from being one of the first states to market, particularly by bringing guests to Atlantic City from the greater Philadelphia market, where sports betting wasn’t yet legal. New York bettors also crossed the border to wager, but they had the Meadowlands as a closer option, so the benefit to Atlantic City was disproportionately from Pennsylvania.” It’s worth noting that the openings of Ocean and Hard Rock (formerly the Taj Mahal) coincided with the introduction of legalized sports betting, providing a significant boost to Atlantic City visitation. The Innovation Group analysts note that even going into early 2020, year-on-year average growth was still in the high single digits. But that doesn’t detract from sports betting’s impact, they conclude: “We’d say Atlantic City has benefitted greatly from property openings, but the availability of sports betting made it a lot easier for people to decide to go ‘down the shore’ to check out the new properties. This has had a lasting impact and really launched a revitalization of the Atlantic City market.”

NEW JERSEY GAMING

Revitalization certainly seems the key word here. And sports wagering has played a massive role in that process, mirroring its impact across the US as a whole. For land-based properties, the appeal is both obvious and wide-ranging. Televising major sports events and offering lines on them creates a whole new audience for casinos. Rather than cannibalizing table game revenue, casinos have found this new audience not only creates a segment in itself (sports betting) but adds revenue across all other segments: table games (for those who can be cross-sold), food & beverage, entertainment and, fundamentally, hotel visitation. All in all, it’s difficult to downplay the role of sports betting in the New Jersey revival. Jessica Feil, senior director, government relations at the American Gaming Association, feels this importance should be underlined. She tells Gaming America: “Not specific to Atlantic City but generally, what we see in our research is sports betting attracts a different and newer consumer to products. So there’s really an opportunity to grow that consumer into other areas of gaming and entertainment, eating out and other things like that at properties.”

THE ROLE OF THE REGULATOR

“DECLINES OF 14.7% IN 2014 AND 21.3% IN 2015 LEFT ATLANTIC CITY GAMING REVENUE AT A MERE $2.4BN, A MORE THAN 50% DECLINE FROM ITS 2006 PEAK OF $5.2BN. CONFIDENCE IN THE MARKET WAS AT AN ALL-TIME LOW.” – ZITT AND WYMAN

Yet without the state’s regulator and lawmakers, there can be no sports betting, no gambling of any kind and even no Atlantic City. While this is true of any gaming jurisdiction, New Jersey’s regulator specifically, the New Jersey Division of Gaming Enforcement (DGE), has aided market growth as much as possible, arguably the very purpose of a regulator. As Feil explains, this brings us to another crucial factor in the region’s recovery. “The one thing I have to say about New Jersey overall is that the regulator’s focused on being leaders in the industry and partners with the industry overall,” Feil says. “They understand how the gaming industry supports communities, local economies and the economic force we are. They also understand the need to balance regulation of the industry with the regulatory flexibility to innovate, create new product and be first in class in what we do. Their efforts to make the state a leader have put them to the front of the pack in so many ways.” Throughout the world, regulators have developed contrasting reputations. Great Britain’s Gambling 20 GAMINGAMERICA

Commission and the Swedish Gambling Authority are seen as some of the industry’s toughest, while the Malta Gaming Authority is viewed as more pro-industry. Across the US, meanwhile, attitudes toward gaming can vary from full embrace to reluctant acceptance and even total opposition. But there is a key distinction worth making: while several states have legalized gaming under more stringent conditions, they may have lacked the foresight to actually help their market thrive. That’s not to say all gambling policy should be laissez-faire – far from it – but there is a balance to be struck. Feil says: “I think what the DGE really does well is balance their regulation with being part of an industry that is an economic driver, tax revenue generator and employer. They’ve balanced the need to ensure certain regulations are in place, like diligent licensing, background checks, compliance recording, and those sorts of regulatory standards that give the consumer and public confidence in our industry with the ability for the industry to work with them directly. They learn from one another about what the industry is looking to do, but also their regulatory policies and objectives as well. They are always so receptive to the industry in terms of us educating them on priorities and new initiatives.” The key characteristics of the framework are notable, with credit due to New Jersey’s lawmakers and not just its regulator here. Companies that operate online must be aligned with a land-based casino (a simple policy that has had tremendous benefits for casinos), while sports betting licences are priced at $100,000. By comparison, Illinois offers some of the most expensive licence fees in the country, with online-only licences costing operators $20m. Retail sports betting revenue is taxed at 9.75%, with mobile revenue taxed at 14.25%. Again, it’s worth comparing this to neighboring Pennsylvania, where gross sports gaming revenue tax adds up to 36%. Outside of sports wagering, New Jersey casino gross revenue is taxed at 8%. “The tax rate is absolutely key,” Feil observes. “That’s a testament to the legislator’s understanding of the gaming industry and sports betting on a deeper level, putting a tax rate in place that drives tax revenue but leaves the industry space to reinvest in and innovate sports betting. Both the legislators

NEW JERSEY GAMING

and DGE are very thoughtful about ways to create a competitive marketplace and create opportunities for operators, land-based and online alike. More generally, on the regulatory side, DGE is very focused on an outcomesbased approach. They set forth regulations that outline the objectives and goals of the regulatory system, rather than dictating certain processes that should be in place; and then give operators and suppliers the ability to create the best way for them to meet those objectives.”

DIGITALIZATION: MOVING WITH THE TIMES It’s not just sports betting that has surged in New Jersey, however, with online betting more specifically helping transform performance levels. In embracing mobile wagering, the state has shown a foresight others have fallen well short of. Throughout past issues of Gaming America, we have assessed American attitudes toward digitalization. It’s not the future – it’s the here and now. But the issue is accepting this reality. In New Jersey, that acceptance has been resolute, with online sports betting accounting for the vast majority of handle. Online casino win, meanwhile, has come as an absolute revelation to anyone doubting its worth. Two prime examples

JESSICA FEIL

22 GAMINGAMERICA

came in November: Borgata’s internet gaming win was $23.4m (a 185% year-on-year rise) while land-based win was $36.6m (down 38%). Golden Nugget’s online success was even more emphatic: internet gaming win grew 38% to $26m, while landbased casino win was $8.7m, down 49%. In both November 2019 and 2020, Golden Nugget’s internet gaming win exceeded its retail casino revenue. Zitt and Wyman explain: “New Jersey has been a great success story for online gaming, particularly during the pandemic. Online gaming, including online sports betting, gave brands a way to connect with guests and generate revenue while physical casinos were shut down. In general, operators in New Jersey have indicated little to no cannibalization of brick-and-mortar guests, suggesting online gaming is viewed as an entirely different bucket of entertainment spend than physically visiting casinos. The online channel also allows operators to interact with those who don’t physically go to casinos and to bring their brick-and-mortar offerings to the top of guests’ minds through advertising. It’s a huge win for the industry and we expect the online channel to continue to grow both within New Jersey and into other gaming markets.” The impact of mobile and online gaming, as such, cannot be underplayed. This is especially emphasized by New York’s lack of mobile betting, an increasing source of frustration for campaigners who feel they’re losing heavy revenue to the Garden State. As Feil remarks, the success of mobile gaming and New Jersey’s wider framework has absolutely persuaded other states to legalize sports betting already, and will continue to do so. She adds: “It’s impossible not to look at New Jersey and see the opportunity for other states. They’ve had a couple of really good months in terms of handle and revenue, despite restrictions on land-based openings and things like that. They’ve really shown how their online sports betting market – especially with the unusual professional sports schedule the last few months – has given a lot of opportunity and helped support the rest of the business.” The end result of this blend? A thriving New Jersey sector that is almost unrecognizable from the dwindling marketplace that befell the Atlantic City Boardwalk and its surrounding areas only a few years back. Naturally, landbased success has been somewhat deemphasized due to the coronavirus pandemic, but The Innovation Group is now far more optimistic about New Jersey and Atlantic City than it was a decade ago. As Zitt and Wyman point out, challenges will remain for the region: additional competition from New York, the pandemic’s impact on destination properties and the overall national economic fallout to come. But the state is now fit to face those challenges head on. Whatever the future holds, it has been some revival for New Jersey gaming, giving it the tools to be competitive during one of the most difficult times in its history.

EXECUTIVE SPOTLIGHT

SETTING THE EXAMPLE Tim Poole speaks with Borgata president & COO Melonie Johnson and Ocean Casino Resort CEO Terry Glebocki, two of Atlantic City’s leaders at the forefront of gaming’s resilient stand during the COVID-19 pandemic.

TERRY GLEBOCKI

When looking at the senior management teams of Atlantic City casinos, it’s impossible not to observe that of nine properties, three are now led by women. It was previously four, too, until Bally’s Atlantic City Hotel & Casino was sold to Bally’s Corporation, which meant the recent departure of Karie Hall. Still, it’s a significantly encouraging number when you consider gaming boardrooms have traditionally been dominated by men. As Ocean Casino Resort CEO Terry Glebocki told us as part of Gaming America’s US CEO Special in the fall, “things have changed a lot.” So often in her career, she said, she had been the only woman at the table. And the important distinction she went on to make was that, now, female executives are not in positions just because they’re women – “they just happen to be women,” she says. That means talent is finding its way to the top on merit, pushing the gaming industry to become a fairer and more inclusive place to work at elite levels. 24 GAMINGAMERICA

There is still a long way to go, of course, when it comes to diversity in the boardroom – and not just when it comes to gender. AGS CEO David Lopez was open and forthright in telling Gambling Insider there is still plenty of room for improvement in that same US CEO Special edition. But the senior positions of Jacqueline Grace, SVP and general manager for Tropicana Atlantic City, Glebocki and Melonie Johnson, president & COO at Borgata Hotel Casino & Spa, prove there is now room for the women of gaming to assume roles at the very peak of the sector. As part of our Atlantic City focus, both Glebocki and Johnson spoke exclusively to Gaming America, and the former feels the business case for diversity is being illuminated by the success of women in modern boardrooms. “I think more and more boards, including gaming boards, are realizing the benefits of inclusion of females,” Glebocki says. “I think it’s unlikely you'll find many boards, in any industry, that are predominantly female, but given time I think you'll see more females being invited into the boardroom. There are some amazing female gaming professionals out there that would be very beneficial for boards to consider. Diversity around the table is always beneficial.”

EXECUTIVE SPOTLIGHT

Glebocki’s career path to becoming Ocean CEO is inspiring, and when advising young female executives who aspire to become an SVP or CEO, her mantra is “the numbers never lie.” She explains: “Treat the business as if it is your own and utilize your entrepreneurial skills. Learn as much of the business as you can and offer to work on special projects whenever possible. Also, learn from your successes and failures as there is a lesson in each one of them. Understand the numbers and use them as a tool to grow the business. Don’t be afraid of the numbers. In the end, the numbers never lie.” For Atlantic City’s top brass, learning from both successes and failures is an important theme. Johnson, for instance, believes some of her best learnings have come from her biggest mistakes. Her journey has been a tough one, she reflects, but she has no regrets looking back on her ascension to the Borgata president’s seat. Her appointment materialized in August, when she became the first ever African American woman to lead an Atlantic City casino. "I graduated from college at 21 years old and grew up in a very small town, so I didn't have a lot of exposure,” she says. “The one thing that helped me in my career is relationships: establishing relationships in the work environment and outside of the work environment, and having that network of people to shore me up. So to be successful, and to achieve this level of success, you've got to have the correct foundation. That’s the educational background, it's the on-the-job experience and then having your support group that can help you. You can bounce things off of people.” Again, Johnson emphasizes the message of reacting to setbacks. For the Borgata president, it’s about accepting negative news in a positive manner and learning how to deliver messages where the individual will not take everything personally. Taking feedback personally is something you really can’t do, she says, which is a lesson we can all learn – in any industry. To move forward, Johnson encourages processing a setback and not wallowing in it or allowing it to become all-consuming. Completing her recipe, she focuses on the way she delivers messages herself, because everyone’s perception is their own reality. These are lessons any executive, male or female, could heed. They are also lessons that have helped Johnson navigate the opening months of her role at Borgata; and there are few challenges more daunting than taking over a land-based property during the COVID-19 pandemic, when sudden closure is always an imminent threat and restrictions mean you’re unable to operate at 100% even when safely open. “By far, the first three or four months has been the most challenging period in my career, I must say,” Johnson admits. “And it’s not necessarily because of the technical aspect of the work or transitioning from one 26 GAMINGAMERICA

MELONIE JOHNSON

property to another, because that’s been part of my career. I’ve worked in multiple gaming jurisdictions and moving is just part of my natural journey. “But the challenge with this was leaving a property during COVID-19 when we had all of these restrictions, coming to a property that had been closed and the employees had been here 20 years. They are very seasoned staff but the property’s closed, with a very limited number of individuals working here, and then moving into a role where other senior leaders were no longer here. I'm unknown to the staff; the staff is unknown to me. We're worried about health, we're worried about safety and we’re trying to figure out how we will reopen this property.” Despite the obstacles, earning respect was something Johnson focused on early. Having worked at MGM Resorts International, Gold Strike Casino Resort, Tunica Mississippi, MGM National Harbor and National Harbor, Maryland, Johnson needed to now prove herself at Borgata, a property she describes as the flagship of Atlantic City. There were big shoes to fill, in her eyes, and combined with managing health and safety protocols and uncertainty regarding jobs and employees, 2020 became a year “no one could have ever imagined in our lifetime,” she says. Yet, as part one of our Atlantic City focus established, New Jersey’s revival in recent years left the Garden State’s casinos in the best place possible to deal with this pandemic. And with the help of Atlantic City’s leaders, the outlook remains optimistic in the long term – certainly far more

EXECUTIVE SPOTLIGHT

positive than just a few years ago, now that record online gaming and sportsbook numbers are offering a lifeline to land-based revenue decline during COVID-19. The overall picture leaves Glebocki, for one, confident about Ocean’s future. “It’s difficult to speak for the other properties but we believe our future here at Ocean is bright,” she says. “I'm optimistic. We had tremendous momentum prior to this crisis, as a property and as a market. Businesses are dynamic by nature. They adapt to changing situations to survive. Atlantic City has seen challenging times before and we will continue to adapt to meet the challenges of tomorrow.” For Johnson, adapting to these new, unprecedented obstacles has meant utilizing the personal touch. As a “people person,” she loves to talk, meet the staff and get to know everyone. It’s about far more than just the business level; she is a firm believer in building a family atmosphere to be effective and efficient (although here, ultimately the business level also benefits). Johnson spent as much time as she could walking across Borgata’s floors, being amazed by the scale of it, and we were lucky enough to speak with her on the GI Huddle live from the hotel casino, by far the best Skype background we have seen so far. Learning the lay of the land, Johnson asserts that she still has a lot to take on. By no means is her job done, an attitude that perhaps embodies the Atlantic City leadership when the going gets tough. Overall, Johnson believes she has embraced her new challenges, falling in love with living in South Jersey. “Our customers and employees are so friendly and it feels like a natural fit right now,” she adds. Resilience is certainly a word that comes to mind for New Jersey gaming in recent years – especially during the pandemic. The same can be said of the women of New Jersey gaming, who have shown their value to the industry through their determination and aptitude, helping the sector move on from a time when only male executives could run some of the best-known properties in the world. For Glebocki, resilience and the ability to change course quickly and adapt to the current business environment are two factors behind the success of New Jersey casinos. “Whether going through a recession, decrease in market share, increased competition or a pandemic, the ability of Atlantic City casinos to adapt to change has allowed casinos to survive and then eventually thrive in the changed business environment,” she concludes. “By way of example, the importance of online gaming, and the revenue generated by online gaming, demonstrates the ability of the casinos to adapt to a changing business environment. This ability to adapt has never been more important to the casinos than during this current year with the closures of the bricks-and-mortar operations in Atlantic City due to the pandemic.” While it is important to recognize the contribution of Glebocki, Johnson and company to gaming, and to

strengthening the position of women in business, it’s equally important to note the merit in their achievements. As Glebocki says, this isn’t about being in their roles because they are female. They just happen to be women who are the best candidates for their jobs. Women in gaming shouldn’t be an on-trend topic trivialized to generate a few clicks or page views, and no woman should be featured to lead a publication just because she is a woman (the same applies for men, of course). Française des Jeux CEO Stéphane Pallez, for instance, features on the current cover of Gambling Insider completely on merit. Speaking with Glebocki and Johnson has been a privilege for Gaming America, with their wisdom and honesty a breath of fresh air, balanced with a sense of authority that makes you sit up and take notice. For anyone looking to emulate the journeys of these Atlantic City leaders, Johnson urges the need for patience above all other qualities. “Right now I'm mentoring quite a few young people,” she says. “They graduate from college and they've got their degree and all the education, but there’s a rush to ‘I should be a property president or vice president in 12 months.’ It doesn't happen that way. You've got to stay the course. It’s not a sprint, it’s a marathon. And you’ve got to learn. Book knowledge is one type of knowledge, but on-the-job experience goes a long way. And the only way you can learn certain aspects of your job is to have hands-on experience. The book knowledge is definitely important, but you’ve got to have on-the-job experience; you've got to stay the course, establish those relationships and be patient. Patience truly is a virtue.”

GAMINGAMERICA 27

CASINO SMOKING

WHERE THERE’S SMOKE Ezra Amacher examines the ongoing debate of whether smoking in casinos has overstayed its welcome, or if it’s still a fix to help maintain a bottom line.

When Park MGM reopened last September as the first smoke-free casino on the Las Vegas Strip, speculation arose over whether COVID-19 could push out smoking at gaming properties for good. Earlier that month, New Jersey Governor Phil Murphy extended a smoking ban at Atlantic City casinos, deeming the activity too risky amid an airborne pandemic. New Jersey joined Pennsylvania and Michigan as the most prominent states to temporarily prohibit smoking at commercial casinos, while several tribal casinos implemented smoke-free policies upon reopening as well. Yet it was MGM Resorts’ decision to go smoke-free at Park MGM that drew the most national attention. Even in the middle of the pandemic, for a major operator to ban smoking at a Strip casino seemed, to some, an infringement on what makes Las Vegas … Las Vegas. The city, after all, built its reputation on allowing people to do (nearly) whatever they want, whenever they want. “There have been a couple of attempts at smoke-free casinos, but they failed,” says Michael Green, a historian at the University of Nevada Las Vegas. “Granting that more people are aware of the dangers of tobacco, smoking seemed for many to go with drinking and other ways we abuse ourselves for fun.” Vices are subject to cost-benefit analysis like anything else, and for decades state gaming regulators and operators have 28 GAMINGAMERICA

studied whether indoor smoking brings in customers or sends them out the door. Only in the past year have decision makers also been forced to factor in where smoking fits into the COVID-19 pandemic, including what additional risks it brings to guests and casino employees. Before the pandemic, 20 states had laws requiring casinos to operate smoke-free indoors. In response to COVID-19, New Jersey, Pennsylvania and Michigan enforced temporary smoke-free policies last year, while Indiana regulators declared that Hoosier State casinos must designate an area for socially distanced smoking, eating and drinking. Several dozen tribal casinos reopened under smoke-free conditions, as did a few commercial casinos like Bally’s Corp. properties Tiverton and Twin River in Rhode Island. “I would say the pandemic has accelerated the smoke-free trend that was already well underway,” says Bronson Frick, director of advocacy for the California-based American Nonsmokers’ Rights Foundation. “Prior to 2020, there were already nearly 800 smoke-free casinos and other gambling venues in the United States. Major gaming companies had already invested many billions of dollars into smoke-free gaming markets and they wanted those investments to succeed, and they have.” Still, hundreds more gaming properties reopened with smoking allowed. That includes nearly all of Nevada’s 440-plus establishments that offer gaming, a testament to smoking’s influence in the Silver State. Nevada is one of 19 states without regulated smoking laws, and most of those states are in culturally conservative areas of the country. Though smoking is widely recognized as a hazardous activity that can cause cancer, heart and lung disease and other longterm health ailments, approximately 14% of US adults smoke, according to the Center for Disease Control (CDC). The CDC warns that being a tobacco smoker increases your risk of severe illness upon catching COVID-19, but researchers have found little evidence that smoking itself increases the spread of the disease. However, “Second-hand smoke can propel viruses into the air from the nose and throat,” writes Panagis Galiatsatos, director of the Tobacco Treatment Clinic at Johns Hopkins University. Also, people who smoke indoors or outdoors must remove their mask, which enhances the chances that they will breathe or

CASINO SMOKING

cough on another person. Casinos that permit smoking can fight the spread of second-hand smoke, however, through upgraded heating, ventilation, and air conditioning (HVAC) systems. When Circa Resort & Casino opened last October, Derek Stevens touted his property’s clear air system as an attraction for guests who smoke or don’t mind the presence of it. “Circa features the first HVAC system in a Las Vegas casino that cools the property from the ground up,” a Circa spokesperson told Gaming America. “The floor was raised 18 inches to allow for this system and the technique reduces energy usage and permits the resort to have a natural flow of air. The system also brings in 100% fresh air from the outside at all times and rarely recirculates indoor air.” Smoke-free advocates like Frick say an improved HVAC system simply isn’t enough. “Ventilation systems don’t address the hazards of second-hand smoke,” Frick states. “So reducing but not eliminating the smoke doesn’t necessarily make it safer, it just gives the appearance that something has been done, or it might reduce the odor, but not address the health hazards.” For decades operators assumed that casino goers were willing to accept the risk of spending hours in an indoor environment where smoking was allowed, if it meant they could indulge in gaming. Big gamblers have often been portrayed in popular culture as smokers, and to this day there remains the public perception that smoking and gaming go hand in hand. Academic studies as well as public polls have put that perception under the microscope in recent years, with results that challenge the long-held assumption of smoking’s popularity among gamblers. In a landmark 2008 study, University of Nevada, Reno professor Chris Pritsos observed approximately 14,000 gamblers at three Nevada sites and found four out of five were non-smokers. More recently, the American Lung Association conducted a survey in Indiana last year that showed 70% of state voters approve of prohibiting smoking in public places including casinos. But when it comes to lawmakers and voters deciding whether to ban smoking at casinos, smoke-free supporters still find the chips stacked against them. In 2006 Nevadans passed a Clean Indoor Air Act that included prohibiting smoking tobacco in most indoor places like schools, restaurants and movie theaters. The bill excluded casinos. “There really has been no concerted effort to ban smoking in casinos,” Green, the UNLV historian, says. “The most we have done was a ballot question in 2006. That year, casino operators, worried about the implications, backed another initiative question that essentially contradicted that one. The voters turned it down.” Operators in Nevada feared that by removing smoking from casinos, they would see a sharp drop in revenue. Four years earlier, Delaware implemented a smoke-free law at its gaming properties as part of a 2002 Clean Air Act. The Federal Reserve Bank of St. Louis reported that Delaware’s three gaming properties saw average monthly revenue fall 13% relative to the year preceding the ban. When Illinois implemented a smoke-free

policy at commercial casinos in 2008, the same Federal Reserve Bank later filed a report that the state saw a 20% revenue drop following the ban. For years operators and state regulators have weighed enforcing smoke-free policies that could diminish revenue, versus maintaining the status quo and exposing casino workers to second-hand smoke. These days, they must also take COVID-19 into account. “The business model has traditionally built in worker exposure to second-hand smoke, worker sickness, disease, death, and it doesn’t have to be this way,” Frick says. “By moving smoking to outdoor areas, it’s good for health and also good for business.” When MGM Resorts decided to enforce such a philosophy at Park MGM last fall, the move generated mixed feelings in Las Vegas, even though the operator has already gone smoke-free at six other properties. The operator incorporated feedback from its guests when deciding to take smoke-free to one of its marquee Strip casinos, says Jenn Michaels, senior VP of public relations at the operator. “The initial response from guests has been very positive as they enjoy having the option of a smoke-free casino-resort, which wasn’t previously available to them,” says Michaels. “Las Vegas has always been focused on offering a wide variety of options, which makes the destination so attractive to so many, and offering a smoke-free option creates yet another way for guests to experience the city in the ways they prefer.” If Park MGM reports consistent or improved business as a smoke-free resort, it could encourage other operators to imitate MGM’s policies in Las Vegas, a city that up until a year ago never considered banning smoking at its casinos. “The accelerated trend for smoke-free air has been one of the few silver linings during the pandemic,” Frick says. “It has reminded businesses of the importance of respiratory health.”

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ROUNDTABLE

ROUNDTABLE: ON TAP Industry experts from Global Payments Gaming Solutions, Crane Payment Innovations, Sightline Payments, SuzoHapp and IGT discuss the appetite for contactless payments at land-based venues, and if the pandemic has accelerated its importance.

CHRISTOPHER JUSTICE

Global Payments Gaming Solutions president

BRIAN WEDDERSPOON & DOUG HADDON:

BRIAN WEDDERSPOON, DOUG HADDON

Crane Payment Innovations VP of gaming and VP of connectivity

Not only contactless payment, but the need for alternate payment forms in general has been accelerated by COVID-19 because of the perceptions of cash use. While there is no increased risk associated with cash and the transmission of COVID-19, the pandemic did highlight the need for alternate payment methods for multiple reasons, including the reduction of touchpoints, as well as accommodating for reductions in workforce. By enabling alternate payment methods at slots and table games, like contactless card or mobile payment, you eliminate the need to travel to the cage, cash out and redeposit money to your bank account. Alleviating these processes means lessening human touchpoints and interactions, and it’s a huge boost to customer convenience. This in turn has pushed the gaming industry one step closer to modernization and in the direction of the payment options consumers experience in their daily lives.

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CHRISTOPHER JUSTICE:

Yes. COVID-19 has created a public health mandate to touch as little as possible. Due to this, we are seeing roughly 60% of consumers shifting to self-service in order to social distance, and 30% leveraging contactless forms of payments. Patrons want to play in a safe environment, and we will see higher play and frequency directed to properties that do the best job to make the guest feel comfortable.

JOE PAPPANO

Sightline Payments CEO

SuzoHapp president and CEO

RYAN REDDY:

Both traditional cash and cashless will continue to have a place in the gaming industry, but we’re seeing an ongoing progression of digital formats like electronic wallets being used along with cash. COVID-19 has definitely created a disruption point for this technology in the gaming industry. Pre-pandemic, we saw progressive operators moving toward cashless gaming. Since COVID-19, however, we’ve experienced an increase in demand for our Resort Wallet cashless solution, because reduced contact, sanitation and social distancing have become casinos’ highest priorities, and are top-of-mind for consumers.

JAMES BRENDEL:

HAS THE NEED FOR CONTACTLESS PAYMENTS BECOME ESSENTIAL IN THE GAMING INDUSTRY AMID THE CURRENT PANDEMIC SITUATION?

JAMES BRENDEL

RYAN REDDY

IGT VP of VLT systems and payments products

If the pandemic has taught us anything, it’s that we can only succeed if we’re able to adapt and be flexible. In this case, that adaptability means providing more options for our customers. of What customers want is the flexibility to take whatever level in safety precautions they feel most comfortable with and pay nts whatever format they would like, making contactless payme just as important as cashless, ticketing, or cash payments. Players today come from all demographics and all walks of life. ia For many, cash is still king as it reignites that sense of nostalg secure more as ed perceiv is and playing while that they enjoy and private. On the other side of the spectrum, contactless holds a lot of appeal after digital gaming during the lockdowns made payments seem effortless. But what is important is the choices available onsite for everyone to be happy.

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JOE PAPPANO: HAS THE NEED FOR CONTACTLESS PAYMENTS BECOME ESSENTIAL IN THE GAMING INDUSTRY AMID THE CURRENT PANDEMIC SITUATION?

While much of the business world shifts to a cashless and contactless society, the casino industry today is still heavily cash-based and substantially underpenetrated by digital payment systems. The pandemic has created an urgency for our industry to adapt to a cashless and contactless payments system. During the pandemic of 2020, cashless and contactless payment solutions have gained a lot of momentum, and the demand for contactless increased significantly. We’ve seen interest in a cashless wallet for casinos and related gaming gain momentum with resort operators and patrons for its critical safety advantages. Many industries, including gaming, sports betting and lottery are moving away from cash and evolving and adapting to new cashless payment technologies from a health perspective or to accommodate the next generation. The pandemic has only sped up and accelerated this process. Even before the pandemic, the use of cash had been steadily declining. The new generation of gaming and sports betting patrons want a seamless, instant solution and payments have finally infiltrated into the casino and resort operators. Our goal, along with others in the industry, is to create that framework that ultimately protects the integrity of the operators, the networks, key ancillary service providers and, most importantly, the patron.

HAS THE PANDEMIC ACCELERATED CUSTOMERS USING CONTACTLESS PAYMENTS ACROSS LAND-BASED CASINOS, QUICKER THAN EXPECTED?

CHRISTOPHER JUSTICE:

It has. Before the pandemic, patrons were adopting contactless payment options at a rapid pace beyond the gaming industry. Due to COVID-19, contactless payment adoption was fueled as patrons needed safer, mobiledriven options to meet their needs and expectations. Today, we expect these behaviors to remain. Patrons have grown accustomed to the cashless gaming experience. As such, land-based operators will need to continue to provide and enhance these contactless and cashless services after the pandemic and move into the future.

BRIAN WEDDERSPOON & DOUG HADDON: Yes and no. For the time being,

operators are still limited in their offering of alternate payment methods for customers, mostly due to regulatory constraints and infrastructure. However, following initial installations in casinos where Crane Payment Innovations (CPI) has worked with operators to implement contactless payment options – namely through our Bluetooth-enabled mobile payment solution driven via our bill acceptors – not only has patron adoption been positive, but it has exceeded expectations. Repeat patron use, in addition to quick adoption, signals to us that the move toward cashless payment methods will not be a one-off trend, but will hold far beyond the timeline of the pandemic. We’re seeing quite clearly that casino patrons are ready to take advantage of the convenience of cashless payment they know elsewhere, in retail, for example, into their gaming experience.

RYAN REDDY: Yes, we’re seeing

JOE PAPPANO: The issues with cash on the gaming floor has always been there I suppose, but 2020 certainly put a spotlight on the potential health concerns and everyone is more attuned to those concerns in today’s world. Wherever contactless payment options are available, we have definitely seen patrons increasingly choose that route, but I think more than anything we’re seeing them demand more capabilities from the operators, which in turn is accelerating demand for solutions like ours.

increasing momentum as a result of COVID-19. In the US alone, IGT has one casino cashless solution that is live, and another just approved in a Nevada field trial, with additional deployments in process. Our Resort Wallet cashless solution marked the debut of cashless gaming in the state of New York when it recently went live at Resorts World Catskills. We also recently deployed a custom cashless solution for Svenska Spel’s VLTs in Sweden, which has driven an increase in new player registrations, mostly among a younger demographic. Four months after launch, cashless activity had driven nearly 20% of Svenska Spel’s VLT revenue.

JAMES BRENDEL: COVID-19 has definitely initiated a more expedited shift toward contactless payments than we likely would have had the pandemic not occurred. By force of require ment, innovation had to occur to minimize interactions. One examp le was that we saw many restaurants switch to digital QR code menus and online payments that allowed for the transaction to occur completely without waitstaff. It was a natural progre ssion then for availability of these payment methods to becom e an expectation of customers in the gaming industry as well. As experts in the cash handling arena, early on we looked at the science behind the safety of cash and spreading the virus. Although cash and paper tickets have been shown to have a lower likelihood of transmission than credit cards given their smoot h plastic surface, the perception of cash, and really all payme nt interactions except contactless, took a nosedive in terms of viral safety regardless of the science. As many have stated, one of the most crucial requirements of rebuilding the economy is making customers feel safe in their day-to-day interactions, so percep tion holds a lot of power in this situation. Therefore, it makes sense that we’ve seen more contactless payment options emerge. GAMINGAMERICA 31

ROUNDTABLE

CHRISTOPHER JUSTICE: Cashless payments mitigate the need for cash. Think of payment cards, mobile wallets, in-app purchasing and other forms of payment channels that enable a patron, or any consumer, to exchange money for goods or services without cash. Contactless payments take cashless payments a step further and mitigate the need for the payment method to contact a physical point-of-sale (POS) device. Again, we can think of mobile wallets, in-app purchasing and some payment cards. As an example, let us look at payment cards in particular. Most payment cards are cashless, but not contactless, as they require consumers to insert the card’s chip into the POS device. However, some cards are contactless as well, as they only need to be held near the POS reader to transact instead of being inserted. Another good example of a contactless and cashless payment channel is VIP Mobility. It enables a true cashless and contactless casino gaming and resort experience while providing an easier, more efficient way to fund play. VIP Mobility gives casino operators the flexibility and opportunity to reduce costs while facilitating a seamless player experience from funding through cash-out. It surpasses traditional forms of wagering and betting by enabling casinos to connect to existing responsible gaming systems while equipping patrons with the technology to better track, manage and control expenditures across both gaming and non-gaming outlets.

JAMES BRENDEL: There’s a lot of grey area in defining cashless and contactless as there is significant overlap between the two. Contactless includes a physical card that uses near field communication technology to make a payment, meaning proximity is required. The pandemic brought to light how many touchpoints we have in a day and begs the question about whether or not that surface is sanitary and if there has been any transference from that surface to ourselves. Cashless, though, includes not only credit cards (swiped or inserted), but also online banking payments via apps including custom solutions, depending on the need. A casino offering a cashless payment method via an app has the ability to host customer profiles, track customer spending behavior, give rewards and unify data points. This could also work, however, in a contactless form such as Apple Pay or Google Pay, which still require proximity for a payment to occur.

BRIAN WEDDERSPOON & DOUG HADDON: A contactless payment is simply an

enabler of cashless payment technology. Whereas some cashless payment is facilitated via magnetic swipe or chipand-PIN technology, contactless payment is any cashless payment enabled by technologies like Bluetooth Low Energy (BLE), NFC, RFID and mobile payment.

RYAN REDDY: The TITO (Ticket-in, Ticket-Out) solution was an early version of cashless gaming, but it’s not contactless because it still requires the handling of physical vouchers. While it’s cleaner than cash, it’s still a less sanitary option than contactless. TITO also requires line-ups at the cashier or kiosk for ticket redemption, whereas IGT’s Resort Wallet eliminates contact with vouchers or cash and promotes social distancing by eliminating those line-ups. For the player, the TITO solution also involves the risks of a printer malfunction, or loss or damage to the voucher. For the operator, TITO requires machine maintenance that contactless payments don’t. A truly contactless cashless experience, where currency is transferred digitally using our Resort Wallet solution, carries the greatest player convenience and operational efficiencies with the least risk. 32 GAMINGAMERICA

HOW WOULD YOU DESCRIBE THE DIFFERENCE BETWEEN CASHLESS AND CONTACTLESS PAYMENTS?

JOE PAPPANO: Any type of payment that is made

without using cash is considered a cashless payment method. Examples are credit card payments, bank transfers, debit card payments, mobile payments and digital wallets. Contactless payments are payments done that do not require a PIN or signature to complete the purchase. You can simply tap and go.

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RYAN REDDY: External funds payment, or digitally drawing funds from a bank account, debit and credit card accounts or eWallets, and loading them into a cashless wagering account, is the newest frontier for cashless wagering; and we’ve been leading the charge in payments gateway technology with our proven IGTPay funding solution. IGTPay is fully integrated into the IGT Advantage system for a truly turnkey, end-to-end solution, which is unique to the industry. Other gaming suppliers need to connect players’ cashless wagering accounts to a third-party gateway technology to access external funds. However, because our secure IGTPay funding gateway is fully integrated into IGT Advantage, day-to day operations are significantly streamlined, which greatly enhances cashless implementation and adoption. Another unique benefit is the full-service aspect of our cashless solution. Our experienced payments team supports operators in all aspects of paymentrelated services, including acting as the Merchant of Record, which means IGT manages the relationship with payment service providers. Without that level of day-to-day support, operators take on the risk, red tape and intensive work hours needed to manage the set-up and administration of foundational external payment services, such as vendor and funds management; as well as essential ongoing requirements for fraud and security, player identification and player support.

CHRISTOPHER JUSTICE: Payment solutions must be system agnostic and able to be interoperable with the infrastructure that’s already in place on the casino floor, allowing current systems to operate as they do. So our VIP Mobility utilizes this insight by creating seamless, digital experiences during every step in the funding process. It leverages existing casino systems and infrastructure to enable guests to easily fund casino play from their personal accounts, play slots and tables using digital vouchers, and cash out in several self-service ways to create a contactless commerce environment that supports proper social distancing. What’s more, as a guest moves from casino to casino, there’s no need for multiple sign-ups or enrollments with VIP Mobility. It’s one balance of funds that seamlessly follows the guest, even for online gaming. Also, VIP Financial Center fosters a seamless experience as it’s the industry’s first true full-service solution that provides convenient self-service TITO, bill breaking, e-check, ATM and cash advance capabilities to casino guests. VIP Financial Center not only enhances the player experience, but it also helps casinos maximize spend across all physical and digital properties.

JOE PAPPANO:

Sightline’s flagship solution, Play+, is the first fully integrated cashless payment technology platform in the US gaming industry, and is a responsible, fast, safe, and convenient alternative for patrons to transact using their mobile devices, both inside and outside of the gaming industry. Play+ is a seamless and secure pay-and-play mechanism to safely and easily store money and fund entertainment, and gaming apps, on the gaming floor and on sports platforms with instant access to their money from a smartphone. In 2020, Sightline launched the ability for patrons to add their Play+ funds to the Apple Wallet, enabling Apple Pay transactions at retail stores. This benefit reinforces the credibility and value of the Play+ account to our B2B clients – the resort, online gaming and mobile sports operators – as well as the individual account holders (B2B2C). The Play+ and Apple Pay combination is the type of innovative thinking that will continue to drive digital transformation in the gaming and entertainment industry. Play+ solves the issue of portability of funds and offers a truly cashless and contactless experience, which doesn’t require interaction with cash, personnel, ATMs, a kiosk device or a gaming device.

JAMES BRENDEL: The biggest obstacles that face contactless payments are connectivity and security. A contactless transaction absolutely cannot take more time to process than a swipe or a cash intake otherwise it’ll create customer frustration, and currently it often does. If an ApplePay customer has to tap multiple times, it not only frustrates and embarrasses them, it also frustrates the people behind them in line, encouraging all to then resort to “tried and true” methods. With varying levels of connectivity and interference in many casinos, this will pose a problem. It must work without frustration for it to continue its growth trajectory. More important is security. With machines having close proximities and in large crowds (postpandemic, of course), customers might not feel their data and money is secure. RFID security is a known, substantial threat and until customers know their money is safe, the growth of contactless payments is unknown.

HOW CAN PAYMENT SOLUTIONS MAKE THE CONTACTLESS PAYMENTS PROCESS MORE SEAMLESS IN THE GAMING INDUSTRY?

BRIAN WEDDERSPOON & DOUG HADDON: To get to a retail-like experience on

the casino floor, the gaming industry will face the hurdles of regulatory compliance, as well as the challenge of updating proprietary systems and hardware. In other words, it’ll require serious time and investments to reach a sophisticated cashless experience across the casino floor. While the Nevada Gaming Board has removed language that prohibits electronic transfer of funds, there’s still no defined solution of how that technology can be implemented. What this means is that, for the time being, until the industry has more guidance and regulations on how to implement standalone cashless solutions, operators need to focus on solutions that comply with known and widely adopted regulations; and ones that can be implemented with existing slot and system configurations, providing a seamless and intuitive solution for patrons. The winner, in the short term, will be solutions that can be implemented quickly and economically using existing casino technology, versus solutions that would require major systemic upgrades. CPI has already developed and implemented such solutions, working with gaming and financial partners to meet criteria for success and long-term adoption and use. As always, we encourage operators to think ahead in terms of technology when they’re planning to invest or upgrade their slot floors. This means asking your payment supplier what their technology roadmap looks like, how they plan to develop alternate payment solutions, and how the payment technology you’re investing in now can be updated or adapted down the line to accommodate alternate payment methods.

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IN-PLAY BETTING

IN-PLAY MAKES STRIDES Swedish start-up Triggy is expanding its personalized in-play sports wagering products to the US market, as the pandemic forces bettors to consider new ways to engage.

BJÖRN NILSSON

Among the many changes the COVID-19 pandemic brought to the gaming industry was an increased awareness for in-play sports betting in the United States. Before the pandemic, sports bettors often had dozens of games a day to wager on between professional and college leagues. Pre-game wagers and the occasional prop bet often sufficed for the casual bettor. Then came the sudden postponement of leagues in mid-March, leaving wagerers desperate to find any action at all. Though popular sports like European soccer, NASCAR, the NBA and MLB incrementally returned during the summer months, the stark drop-off in offerings from last spring created an important shift in American sports betting behavior. A presentation from Kambi’s chief commercial officer Max Meltzer at the 2019 G2E reported in-play betting grew 38% during the lockdown period of 34 GAMINGAMERICA

mid-March to mid-July, up from 26% pre-lockdown, but dropped to 30% between mid-July and the end of September. As American sports bettors slowly migrated to in-play wagering, Triggy, an information technology and services company based in Stockholm, Sweden, took note. Launched in 2017 by Swedish-start up Flax Innovations, Triggy is a B2B2C company that offers data-driven live-score products for the sports betting industry; it aims to let the sportsbook own the whole customer experience through unique features that give players a better and faster experience via relevant, personalized notifications, either by using its white label app or integrated solution. In 2019, Malta-based venture capital fund Vereeni Investments acquired a reported six-figure stake in parent Flax Innovations. By then, Triggy’s customers included LeoVegas and Sportsbet. io. The company, which partners with Sportradar and Kambi, recently launched Pinnacle’s Live Soccer Scores app. And this past October, Triggy made strides by hiring banking and finance veteran Martina Akerlund as its new CEO. She will oversee the company’s expansion into the US market with the support of Darran Miner, Triggy’s vice president, North America, and formerly senior marketing director at the New York Racing Association (NYRA). With the US blowing past $3bn in legal sports wagers per month, expanding across the Atlantic was too good an opportunity to pass up, says Triggy co-founder Björn Nilsson. “There is so much I’m excited about and looking forward to in the US market,” Nilsson tells Gaming America. “I believe casual and experienced bettors want quality, user-friendly products that enable faster and enhanced betting options. I also believe operators are looking for similar assets to increase engagement and revenue pre-game and in the in-play market. Our Triggy suite of products and technology really solves a need within the industry while bringing the bettor and operator close together like never before.” When Triggy was launched four years ago, Nilsson and Flax co-founders Stefan Thunberg and Daniel Svenson couldn’t have envisioned a day like last March when sports betting came to a screeching halt. Triggy used the downtime to hire more people, raise capital and expand its app’s coverage of American football. All the while, the pandemic left bettors with more incentive,

IN-PLAY BETTING

and time, to explore new wagering avenues. By the time sports picked up to its pre-pandemic speed, Triggy was better positioned to capitalize on the growth of in-play. “That’s something I found really impressive when I joined Triggy because if you’re a company looking to thrive in the long run, you will have to adjust and be innovative in this ever changing business landscape, whether it be tougher periods, changing regulatory requirements or meeting new customer demands,” Akerlund says. “Triggy’s way of adjusting business operations in the pandemic is quite impressive. To invest in the future and choose to grow the company when revenues halt due to a total cancellation of sporting events takes great courage. We took that opportunity to expand, build and be ready to capitalize on the growing US market.” Akerlund spent over two decades in banking and finance, industries she says love planning and structure; sometimes even too much, she admits. Akerlund credits Triggy’s entrepreneurial mindset for creating clear goals and fostering a strong environment. In her role with Triggy, she plans to improve efficiency along with developing partnerships with operators, media companies, affiliates and sports teams. “Most businesses and companies are facing the same demands at the moment: automated processes, personalization, data usage, customer experience, innovation capacity, scalable processes and high delivering teams,” Akerlund says. “This is something I have worked with for a long time. The golden days of banking are over, though, and it's all about cost efficiency going forward while the gaming industry is just in the beginning of a new era, which is extremely interesting to be part of. There is a tremendous opportunity within areas such as customer experience, data and innovation where I really see the technology of Triggy can contribute.” Triggy is confident the timing is right for US expansion as more Americans than ever are not only betting on sports legally but participating in in-play wagers. Triggy is currently demoing its US live sports products, which aims to separate itself from the competition by giving customers a specialized experience. The products allow players to subscribe to their favorite teams and receive push notifications and alerts on starting odds, lineups and in-play game events. “When a customer follows a team, they will receive push notifications with game updates containing suggested bets [NextBets],” says Miner. “When they click on the suggested bet, they are brought right into a betting slip on the operator’s site. It makes the process streamlined and smooth for the customer and the operator. Also, bettors can set triggers for each game they are following. This allows them to set the odds they want to place a bet at. When the odds hit the sportsbook, the customer is notified and is offered up a NextBet.” As Triggy’s top US-based employee, Miner is tasked with developing marketing strategies for in-play, which comes with some significant hurdles. In-play betting makes up 75% of bets

in Europe and around the world, says Miner, but in the US it’s between 20 to 30%. Customers in newly legalized markets may be unfamiliar with in-play wagering or lack user-friendly products. Miner says it’s on operators to educate their players about pre-game and in-play betting opportunities. “While US sports betting as a whole is in its infancy, the in-play market is really just beginning to emerge,” Miner says. “Sports betting operators see the value in getting their existing customers to bet more often and our products not only help them engage and retain players, we make it easy for the customers through our NextBet Technology.” Miner relies on his five years of experience at NYRA, where he gained an understanding of what customers want. He was part of a team that launched NYRA Bets’ national online wagering platform. In that role he developed relationships with operators in recently legalized markets and worked to acquire market share. Triggy affords operators in emerging markets a similar opportunity, he says. “For years, bettors, casual bettors in particular, only knew of pre-game bets and maybe some of the prop bets for big events like the Super Bowl,” he says. “Operators are educating customers within newly legalized states who have probably never placed a legal bet before let alone a bet while the game is going on.” Once Triggy and its partners are able to raise awareness for in-play, the Triggy team is sure its products will increase consumer acquisition and generate revenue. “Our products are engaging,” Nilsson says. “Our idea is to grow even further by adding all the US sports. We already have soccer and football and are looking to add basketball before March Madness, baseball in the spring and summer, and hockey in late summer of 2021. It is going to be a busy time.”

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CONVENTIONS

POWER OF THE PEOPLE The truth is, if you take gambling out of Las Vegas, the city would probably survive. But if you took conventions away, the city would have a serious problem. Oliver Lovat of the Denstone Group consultancy, which has a focus on casino resorts, details the extent of the reality that post-pandemic numbers might not return.

36 GAMINGAMERICA

The Las Vegas Visitors and Convention Authority was established in 1955 with the aim of operating the Las Vegas Convention Center, which opened in 1959. The mission of the LVCVA is to get “heads on beds,” that is to support the constituent owners, that is the local resorts and the Chamber of Commerce. The rationale of building a convention center was to meet the strategic problem facing the resorts at that time: how do we get people to come to Las Vegas midweek? The Convention Center was a citywide, communal amenity, hosting events that the resorts could not host, not just meetings but sporting events and large concerts that could not fit in the showrooms, most notably hosting The Beatles in 1964. The Convention Center saw steady business, it slowly expanded over the next 20 years, but it was not until the 1980s when conventions really started to have an impact on the market. As reported in my previous column, early ‘80s Las Vegas was hit by a triple crisis: economic recession, the proliferation of gaming in Atlantic City and The MGM and Hilton fires. Visitation, especially midweek, declined alarmingly. Turning to past solutions, the operators turned to encouraging the growing conventions business, marketing large-scale events midweek.

CONVENTIONS

Throughout the decade, convention delegates grew by 130%. Without this midweek business, the viability of the city would have been in question as gamblers fled to Atlantic City. In 1989, a consortium of convention organizers, including the late Sheldon Adelson, acquired the Sands Hotel and set about building The Sands Convention Center as a place to host their own events and leasing space to others. Adelsonâ&#x20AC;&#x2122;s investment in Las Vegas was to be a turning point in the city. As The Sands proved, the convention center was not an amenity but the primary driver of business. In the 1990s, the number of convention delegates was to grow by a further 117%. The decade closed with the opening of Adelsonâ&#x20AC;&#x2122;s Venetian resort, the business model of which was not predicated on casino revenues, but convention and hotel room sales, and was designed against much of the perceived wisdom that had evolved from the pit to the boardroom. With the thesis firmly proved, Las Vegas expanded with the

convention and meeting provision underpinning investment and growth forecasts, rather than traditional gaming revenues from high-end players. As the next generation of resorts and expansion plans were developed after the turn of the millennium, the business strategy was not in growing gaming revenues, but how to grow average daily rates, occupancy and revenue per available room; noting that the average spend for the typical convention customer was about $200 greater for a convention guest than a leisure customer. Between 2000 and 2019, room inventory and customer visitation grew on par, but there was a 73% increase in convention delegates. Alarmingly, there was a warning sign after The Great Recession of 2007. When the US moved into recession, the number of convention delegates dropped from 6.3m in 2006 to 4.4m in 2010, only rising above 6.3m again in 2016. The recovery period for 2m lost guests was a decade.

Breakdown of Las Vegas visitation volumes from 2000 to 2019. Source: LVCVA Year

Visitation

Room Inventory

Occupancy

Convention Delegates

2000

35,849,691

124,270

89.10%

3,853,363

2001

35,017,317

126,610

84.70%

5,014,240

2002

35,071,504

126,787

84.00%

5,105,450

2003

35,540,126

130,482

85.00%

5,657,796

2004

37,388,781

131,503

88.60%

5,724,864

2005

38,566,717

133,186

89.20%

6,166,194

2006

38,914,889

132,605

89.70%

6,307,961

2007

39,196,761

132,947

90.40%

6,209,253

2008

37,481,552

140,529

86.00%

5,899,725

2009

36,351,469

148,941

81.50%

4,492,275

2010

37,335,436

148,935

80.40%

4,473,134

2011

38,928,708

150,161

83.80%

4,865,272

2012

39,727,022

150,481

84.40%

4,944,014

2013

39,668,221

150,593

84.30%

5,107,416

2014

41,126,512

150,544

86.80%

5,169,054

2015

42,312,216

149,213

87.70%

5,891,151

2016

42,936,109

149,339

89.10%

6,310,616

2017

42,208,200

148,896

88.60%

6,646,200

2018

42,116,800

147,238

88.20%

6,501,800

2019

42,523,700

149,422

88.90%

6,649,100 GAMINGAMERICA 37

CONVENTIONS

HOW BIG IS THE PROBLEM? Las Vegas has bet big on business travel. LVCVA reported that 6.6m conventioneers visited Las Vegas in 2019 and directly supported approximately 45,000 jobs, $2bn in wages and economic output of $6.6bn. Including indirect and induced impacts, the totals increase to 70,700 jobs, $3bn in wages and $11.1bn of total economic output. There is currently over 3.2m square feet of pure convention space in Las Vegas and 5.3m square feet of event space. The Venetian is enhancing its own 2m square feet of convention and meeting space with the MSG Sphere, an 18,000 seated arena. And the LVCVA Convention District with 1,000,000 square feet of new space will be complete in 2021. At press time, large gatherings are not permitted in the State of Nevada despite the various steps taken by operators to reduce risks for those seeking to meet at a resort; all the major convention operators have instituted measures to mitigate potential risk and have elevated their safety procedures. However, the return to record levels of convention visitors will have little to do with the steps taken by operators. It would rather be dictated by a dual outcome of how COVID-19 evolves and macroeconomic trends, which affect the need of businesses to hold meetings and conventions. This leaves the current business model adopted by Las Vegas operators – midweek convention business, supplemented by weekend leisure customers – needing urgent revision. There are only three viable solutions to this problem. The first is to try and actively stimulate meeting and convention business for when these events are viable; however, success is not determined by individual efforts. This strategy involves carrying the burden for employees and ensuring facilities are maintained, which may cause some of the larger operators with multiple venues to fill problems. But by shedding these employees, it’s harder to ramp up as conditions change.

Enhancements can be made to convention and meeting space to meet changing customer needs, such as increased broadcast production facilities, but those resorts advocating this strategy are surely aware the market will return incrementally over a long period. The second is to close resorts midweek, with the aim of cutting operating costs until the return of systemic midweek growth and diverting business to key properties. This is the fate of MGM Resorts' portfolio, especially older resorts, such as The Mirage and Mandalay Bay, which in recent years have been repositioned away from leisure and to convention centric customers. The third, and perhaps the most controversial, is to acknowledge that there’s an oversupply of convention and meeting space. Legacy space has been supplemented by newer rooms and based on past trends, 2019 levels will not return anytime soon. If this is the diagnosis, then there needs to be fresh thinking to redevelop these spaces as revenue-producing areas. Executive efforts are currently still on managing phase 1 of the pandemic crisis, which is keeping the doors open and managing expenses. However in mid-2021, the thought process into managing legacy conventions and meeting space will begin – and expect to see this as the beginning of the next cycle of innovation and targeted attractions. Las Vegas has historically innovated to find unmet customer demand, so post-COVID, who are the midweek customers if not conventioneers? One hypothesis is that resorts should investigate active programing, as seen in other traditional vacation resorts and cruise ships. Program events for the morning, lectures, art galleries, focused midweek festivals and unique experiential retail for invited guests would hopefully drive occupancy, rates, visitation and all revenues. It may even be that the responsibility for sourcing, attracting and coordinating this next generation of attractions is led by LVCVA, which would seem an obvious choice to lead coordinated innovation. But despite all the theorizing, one thing remains clear. Taking conventions away from Las Vegas is not an option. It’s time to problem solve.

“THE RETURN TO RECORD LEVELS OF CONVENTION VISITORS WILL HAVE LITTLE TO DO WITH THE STEPS TAKEN BY OPERATORS. IT WOULD RATHER BE DICTATED BY A DUAL OUTCOME OF HOW COVID-19 EVOLVES AND MACROECONOMIC TRENDS, WHICH AFFECT THE NEED OF BUSINESSES TO HOLD MEETINGS AND CONVENTIONS.”

38 GAMINGAMERICA

AMELCO

2021: THE SPORTS BETTING OUTLOOK Brandon Walker, head of Amelco USA, gives Gaming America his sports betting industry predictions for 2021, focusing on how player habits will change in the US. What major trends does Amelco foresee in 2021 for US sports bettors?

BRANDON WALKER

While US sports betting has been a hot topic ever since PASPA was overturned in May 2018, there is still much to ponder for suppliers and operators thanks to new challenges brought on by the coronavirus pandemic. Brandon Walker, head of Amelco USA, sees plenty of potential for change when it comes to player habits, especially prop bets. The gaming executive spoke exclusively to Gaming America to tell us more, discussing the major trends he expects in 2021, player behaviour and not being out of the woods just yet when it comes to COVID-19. 40 GAMINGAMERICA

We’re in for another whirlwind year for the US sports betting scene, as more states look to regulate online and get in on the action. New Jersey alone continues to break its own records almost on a monthly basis, with some serious growth that is generating a hefty portion of tax revenue, which I’m sure plenty of other states are starting to notice. I also believe there will be a more open attitude toward online casino, which has proven itself as a hugely reliable pandemic-proof alternative to sports betting. Up to this point, Pennsylvania and New Jersey were the only two states to really capitalize on offering an online casino experience. The likes of Colorado, Tennessee and Indiana are set to be left out in the cold if we see another repeat of fixture cancellations in 2021, and they’d do well to speed up the process. Prop bets are also going to continue with the momentum they’ve already been building with US audiences. This is in effect inevitable, as the market was always set up to be stat-heavy for the big four sports, because it’s what we knew US sports fans would demand. Last but not least, it’s been a very interesting few months in terms of commercial deals between big US operator groups and major sports teams, and 2021 will certainly be a time when these agreements begin to manifest themselves and show their effectiveness. Big-name involvement has the potential to really change the game and I look forward to seeing what other deals can be made, and how they’re activated to appeal to US audiences.

How will player betting habits change compared to previous years? We’re on an exponential trajectory here and as more US audiences become engaged with the world of online and

AMELCO

discover what’s available, we’re going to continue seeing great change. As anyone who’s been to Las Vegas or Atlantic City will know, US sports betting is hugely geared toward stats. So much that punters arguably follow the player far more than the team. In baseball, for instance, we typically see more bets placed on a player’s average number of points, assists or RBIs than actual team results, which makes the US such a unique betting environment. I also believe that as we see more spectrums of demographics getting familiar with online sportsbooks, we’ll see an even greater surge in stats-based prop betting. This is going to have a very broad customer base, from traditional daily fantasy sports players who want to transfer their knowledge to sportsbook, or even younger players who know their college football teams inside-out and want to test their skills in real money gaming. When it comes to adoption and evolution of habits, a lot of this for me is based on educating the market on what’s out there. As legal sports betting continues to grow and the online experience will become more familiar, punters will be able to navigate through, find markets and better understand just how many options there are available. The knowledge is already there given the passion for sport, but they’ve only just begun to apply it to betting. In many ways we’re only just getting started, which again shows how much untapped potential the US really has.

How important do you think player props will be? They’ll be a game changer. Take college football. In sheer numbers, it’s one of the biggest sports in the world, and in the majority of states, college teams are better supported and play in bigger stadiums than their professional counterparts. Students and fans know their teams very well and devote hours of their time to analysing the form, and they now have an opportunity to bet on that for the first time online. It’s a completely new world that we can’t compare to anywhere else. The potential in terms of customer base is huge. We all know US fans may not care if the LA Lakers win or lose – it’s more about how well LeBron James plays and what he achieves. It’s the same with Patrick Mahomes and the Kansas City Chiefs. Superstar players transcend their teams, and punters will look to wager on their performance and numbers rather than the team as a whole. This is especially the case for basketball, where one player can be so instrumental. In a soccer match over in the UK, it’s completely different. If you lose a key player, that doesn’t mean the wheels come off. That’s not the same over here. This opens the door to a whole catalogue of alternative betting markets and the entertainment potential for that. And the way it will resonate with US fans is going to be immense. A match result may be decided by the first half

in some cases, but by betting on player props, even garbage time points or runs, the most uninspiring games can turn into a rollercoaster experience for punters.

Can states progress with just sports betting or are alternative verticals needed? It’s really a case of putting all your eggs in one basket. Yes, US sports betting has huge potential for growth in 2021 as well as a chance for providers to really get creative in what they offer, but we need to remember we’re not out of the woods with COVID yet. As any analyst will tell you, that means plenty of risk. The logic of a ‘safe’ hedge dictates that alternative product ranges, such as online casino, are going to be essential. From first-hand experience we’ve seen that play out in 2020 and poker, esports and live dealer have been real lifesavers when sports were cancelled; we could very well see a repeat. As a platform provider across six US states, I can tell you having pandemic-proof alternatives are essential; and the broader demographics of customer you attract (as after all, online casino customers are very different to sports punters), the safer you’ll be with any major shifts related to COVID restrictions. While technically sports betting, I also believe horse racing is a massively untapped vertical that has plenty of opportunity as an alternative betting option. It’s a lot easier to hold behind closed doors, which enables it to be a great option to have on hand to keep sports punters engaged. The US has some great domestic races in the calendar and while it’s been drowned out in the last few years by the big four, we’re seeing plenty of increased interest in this space. With the right operator marketing strategies, there’s certainly room to grow in the year ahead.

“HAVING PANDEMICPROOF ALTERNATIVES ARE ESSENTIAL, AND THE BROADER DEMOGRAPHICS OF CUSTOMER YOU ATTRACT, THE SAFER YOU’LL BE WITH ANY MAJOR SHIFTS RELATED TO COVID RESTRICTIONS.” GAMINGAMERICA 41

THE SANDS

SANDS OF TIME Ezra Amacher pores over UNLV gaming historian David Schwartz’s book on the Sands and how the property anchored itself in Las Vegas royalty and became the template for future properties in the city. Readers of this magazine have likely stepped foot in the Sands Expo and Convention Center, either for a Global Gaming Expo or another event. The 1.1 million-square foot facility is a testament to the ambition of Las Vegas Sands Corp. founder and CEO Sheldon Adelson, who himself was a convention organizer before entering the casino business. Adelson, who died in January, envisioned a Las Vegas that would attract millions of visitors a year to conventions, a prophecy that has held the test of time. Now, more than three decades after Adelson and his partners purchased the Sands Hotel & Casino, he was reportedly seeking to sell the three properties before he died that stand where the Sands once was: the Palazzo, the Venetian and the Sands Expo. 42 GAMINGAMERICA

All the uncertainty regarding one of the Strip’s most historic brands makes this a good time to revisit how the Sands became what it is today – a multi-continent casino empire. David Schwartz, associate vice provost for faculty affairs at UNLV and gaming historian, has us covered. Last year, Schwartz published At The Sands: The Casino That Shaped Classic Las Vegas, Brought the Rat Pack Together, And Went Out With a Bang, a deservingly long title for such a detailed account of the original Sands. Like most good Vegas stories, the book begins with a gambler trying to strike it big. Billy Wilkerson was a Hollywood café owner and trade magazine publisher with a knack for the craps table. His gambling habits inevitably led him to Vegas, where he soon established an outpost of LA’s LaRue Restaurant. The

THE SANDS

Vegas LaRue opened in late 1950 but never took off; attracting the rich and famous to the Mojave Desert wasn’t as easy a sell as the Sunset Strip. Nevertheless, the property laid the foundations for future businessmen to build a casino at the site. Mack Kufferman, a millionaire who made his fortune in New Jersey’s bootleg liquor business, was the first to try his luck, but his East Coast ties worked against him from the start. Nevada gaming leaders decried Kufferman’s reported connections to the New York mafia, which they feared would catch the attention of Estes Kefauver, an up-and-coming Tennessee Senator with eyes on the White House. Between 1950 and 1951, Kefauver led a Senate Committee on organized crime. The Kefauver Committee threatened to tarnish the reputation of Nevada casinos if word got out that the mafia was funding the state’s legalized gambling enterprise. The Kefauver Committee also served another significant if unintended purpose: its crackdown on illegal gaming operations led gamblers to flock to Nevada, where they’d be protected by state law. One of those gamblers to seek refuge was Jack Freedman, a Russian immigrant who’d built a successful gambling house in Houston. In 1952, Freedman arrived in Vegas and soon became the perfect front man for the LaRue site. Freedman, like Kufferman, had connections to Meyer Lansky and other members of organized crime, but his Texas upbringing gave off a Western persona that appealed to the cowboys of Nevada. Freedman promised the state Tax Commission that Kufferman and the

MEYER LANSKY

44 GAMINGAMERICA

JACK ENTRATTER (LEFT), RITA HAYWORTH AND DICK HAYMES

mafia wouldn’t be involved in direct operations of the casino. Reluctantly, the Commission agreed to award Freedman a license. Of course, the mafia would become very much involved in the casino business through the ‘50s and ‘60s. Lansky, Doc Stacher and other members of organized crime funneled money into Freedman’s business. Under the direction of designer Wayne McAllister, the casino renamed itself the Sands, “A Place in the Sun.” As Schwartz points out, the phrase comes from Theodore Dreiser’s 1925 novel An American Tragedy, which involves a love triangle ending in murder. “Divorced of its cinematic context, though, ‘A Place in the Sun’ perfectly describes just what the Sands was to be: an oasis of relaxation, entertainment and gambling, in the exotic desert,” Schwartz writes. One of the great joys of the book is that Schwartz captures in great detail what made the Sands of the ‘50s unique. Operating under a considerable bankroll with investors showing little concern for the margins, the Sands staff had the freedom to employ extravagance at a time when most casinos were just trying to go black. Opened in December 1952, the Sands entryway incorporated Italian marble while the complex used a “fusion of sleek lines and tropical sensibilities.” The Sands consciously marketed itself to gamblers, a term we now call high-rollers. In those early days of legalized gambling, gamblers were men whose reputation was won or lost at the table. “Being called a gambler meant you had not just the means and the fortitude to bet big, but also the confidence that, if you lost big, you were good for it,” Schwartz writes.

THE SANDS

At the Sands, gambling was the main source of revenue but far from the main attraction. That would be the Copa Room, named after the Copacabana Nightclub in New York City. Its boss, Jack Entratter, was general manager of the Copacabana before joining Freedman in Vegas. Entratter receives the most attention of any character in the book and for good reason. He was the man responsible for bringing the Rat Pack together and, subsequently, elevating Vegas into one of the world’s premier entertainment destinations. Frank Sinatra began playing at the Sands in October 1953, and his success and salary caught the attention of Dean Martin and Sammy Davis Jr., who wanted in on the Copa. The Sands also brought in non-performing celebrities including film stars Humphrey Bogart, Lauren Bacall and Marlene Dietrich. The presence of Hollywood A-listers helped the Sands attract regular people who could realistically rub shoulders with celebrities. This being the 1950s, the Sands wasn’t open to everyone. Blacks were excluded as guests, and Black entertainers like Sammy Davis Jr. were forced to stay off property. Schwartz includes the story of James Gay III, a Black Sands employee who assisted in hiring personnel. Gay was an active member of the segregated Westside of Vegas, where he and Black leaders threatened a protest in the late ‘50s of the discrimination their community faced from casinos. Fearful of the negative publicity the protests would bring, the casinos agreed to integrate in March 1960. The early 1960s posed significant challenges for the original Sands team. Though the casino supported John Kennedy’s campaign for President, the new administration came down hard on organized crime. Robert Kennedy led an FBI spying campaign against Sands leadership, which Schwartz humorously recounts led to no real discoveries. However, Sinatra’s ties to the mafia ultimately led to his ouster from the Copa, ending the Rat Pack era. Between Sinatra’s departure and the untimely passing of Freedman, the Sands identity began to crumble and its business tanked. By the mid ‘60s, the Sands was looking for a new owner just as business magnate Howard Hughes was seeking a new landing spot. Within months of arriving in Vegas, Hughes went on a casino shopping spree that included the Sands. Hughes’ team made immediate changes to the Sands business structure, none more significant than requiring gamblers to sign for the money they were lent. Moreover, guests had to show picture ID to receive credit. Since opening 1952, Sands had promised gamblers easy credit and anonymity. When those privileges went away, so did the casino’s top clientele. It didn’t help that the Sands was now competing against some emerging heavyweights like the Caesars Palace. Lots has been written about Hughes’ influence in Vegas,

SANDS HOTEL, CREDIT DESERT SUPPLY COMPANY, LAS VEGAS

which is why it’s disappointing that such a significant character is shoved out of the picture (partly by his own doing) almost as quickly as he enters. The Hughes-backed Summa Corporation owned the Sands from the late ‘60s to 1983, when it was sold to the Pratt Corporation. That ownership faded quickly, leading Summa to reestablish control until MGM Grand Inc. took the reins in 1988, but that experiment dissipated within a month, at which point owners of the Adelson-funded Interface Group took over. The casino’s rapid changing of hands reflected the growing corporate trend in Vegas by the late ‘80s. No one better resembled a corporate identity than Adelson, who had made his presence felt at trade shows all over town. From the start, Adelson prized conventions and hotel occupancy above gambling. “As always, he was happy to demonstrate, with charts and graphs, why conventions were going to be the next big thing in Las Vegas, making Sunday through Thursday as profitable as the weekend,” Schwartz writes. With convention business booming, Adelson had enough capital to buy out his Sands partners and become sole owner by 1995. That year, Adelson hired William Weidner as president of the Las Vegas Sands Corp. Weidner realized the Sands Hotel & Casino’s location was ideal for housing a $1.5bn megaresort. “In the end, Las Vegas wanted 6,000 brand new suites, 200,000 square feet of casino space, 150 shops, 30 restaurants and more convention space… more than it wanted the old Sands,” Schwartz writes. In earnest, the old Sands had been gone for decades. Its 1996 demolition made it reality. Gratefully, the stories of the casino live on thanks to Schwartz’ At The Sands. GAMINGAMERICA 45

SPORTS BETTING MARKET

FULL SPEED AHEAD  Bill Pascrell, III, partner at Princeton Public Affairs Group, has also been a strategic gaming advisor and consultant across the US, Canada Europe and Australia. Here, he gives an overview of what we can expect to see in the US sports betting market this year. I think there are two verticals that are going to have a very good year in 2021. The first is esports. There’s been a lot of movement, legislators are coming in and out of session, and while they’ve been focused on COVID-19, I believe it’s only a matter of time before esports takes off in multiple jurisdictions, including New Jersey, which hasn’t fully embraced it yet although legislation is propping up there. There are about a dozen states where esports is starting to get some traction and I think we’ll have a good home for it next year. More importantly, the pièce de résistance I’m working on is fixed-odds horse racing. It’s going to be a bonanza in the new calendar year. I’m working in 10 states now, and probably five more by the end of 2020, and have just been to Mississippi and Texas. We’ve spoken with Governors and the legislators about the value of fixed-odds horse racing. There’s legislation that’s going to move rapidly in New Jersey. We’ve talked to Michigan, Oklahoma and Ohio to name a few, which are all exploring the power of fixed-odds horse racing. Part of it is horse racing is diminishing in the US with the old parimutuel tote system. It’s been struggling and year-on-year it’s 46 GAMINGAMERICA

been reducing 2 or 3%. If something doesn’t change soon then horse racing is going to become a thing of the past. Fixed-odds has a benefit in a couple of ways. First of all, before 1930, US horse racing was all fixed-odds. The tote parimutuel system was introduced in multiple states in the early 1930s then fixed-odds went away. The parimutuel system is antiquated, not innovative and it doesn’t capture the imagination of the younger punter, the 20 and 30-year-olds. The 21 to 39-yearolds are the bulk of sports betting and the fixed-odds horse race bet is similar to a sports bet, straight up with a spread fixed. We believe, much like what’s happened in New Zealand, Australia, London and Germany, fixed-odds is going to help stabilize the tote without diminishing it and then it’ll grow to where you’ll see bets where for every dollar bet, 70 cents will be on fixed-odds and 30 cents on the tote. We think that’s the direction it’s going in but it’s going to take legalization and regulation, and marketing, for the vertical to get to the predicted heights.

SPORTS BETTING WILL CONTINUE TO GROW Sports betting in the US is a monster. No one believed me when I

SPORTS BETTING MARKET

predicted in 2018 when New Jersey first launched that we would exceed Las Vegas in 18 months and we did. New Jersey had another record month in October, collecting $803m in sports betting handle (growing again in Nov and Dec). Sports betting is continually growing because people are becoming increasingly more comfortable betting on either mobile or in-person sports bets, as opposed to going to the local street bookmaker because they feel it’s a much more user and customer friendly experience. We’ve had a great year despite the fact COVID-19 shut down the majority of sport for many months. As we continue to go into the end of college and professional football season before basketball starts, the vertical will continue to gain traction. In terms of the next states to legalize sports betting, it’s a little unpredictable because the pandemic has taken a lot of the oxygen out of the room. I’m currently talking to multiple states that already have sports betting that are interested in doing mobile and online, and I think there’s going to be some surprises there. The three primary states that everybody is watching but haven’t moved yet are Texas, Florida and California, each one with its own set of challenges. Looking at Texas, the state doesn’t really have casinos but their citizens are going over the border to Colorado and Oklahoma to go to casinos and place sports bets. I believe in Texas, which has sessions every other year, meaning they didn’t have a legislative session in 2020 but they will have one in 2021, there’s some room for movement. New York is definitely focused on reviewing the value of online sports betting, and Governor Andrew Cuomo is trying to understand it more and appreciate that a lot of his citizens are going over the border to New Jersey, which is about 20-25% of the New Jersey market. I think he wants to capture that audience because there’s tax revenue and jobs that can be created there. Both California and Florida have their internal struggles. In California, Governor Gavin Newsom has been trying to work carefully behind the scenes with the race tracks, card rooms and the tribes to try to get their heads around sports betting; those organizations are nervous about getting sports betting in because they think it’s going to cannibalize their existing systems, which it won’t. I think California is the major crown jewel because we’re about a year or two away from California popping, in regard to sports betting. Conversely in Florida, Governor Ron DeSantis, who is having his own problems with the pandemic, has been in constant conversations with the Hard Rock Seminole Tribe, which has the compact in the state and they’re trying to sort that out. When Florida, Texas and California go, however, look out since that’s going to be a major boom for sports betting in the US. I do believe that the sports betting market will continue to grow in New Jersey in 2021. There’s some things we’re working on to help and continue that growth, including regulation and tax structure. New Jersey has got it right and it’s now the third-largest online gaming jurisdiction in the world. It’s had no issues with money-laundering, cyber-related crime breaches or geolocation

BILL PASCRELL, III

breaches, and the more that continues the better, along with content, which is important, of course. I think the month to watch out for will be February when the Super Bowl is over and when we’re getting into the full-blown NBA and NHL calendar, and then MLB will start a little later in March or April. In 2021, I also foresee exchange wagering starting to take off. Peer-to-peer betting, which allows users to lay selections rather than only back them as with a traditional sportsbook, hasn’t been utilized outside of horse racing, but I think it’s an operator model that will make strides heading into the new year. The future of the online and sports betting industry is very strong; statistics and figures have shown that. There’s going to be a new governmental alignment that will embrace what this industry represents.

SPORTS BETTING IN A NORMAL WORLD The new sports environment will continue to have an impact of the sports betting industry. The way operators have been trying to be more innovative with focusing on the customer has been positive. Data is more powerful than ever as well as having a good data analytics team that can utilize it to push through to a customer’s different offerings. In terms of entry into the market, registrations are becoming more expeditious. Early on in the market, it took about 30 minutes to sign-up but now it’s roughly 12 to 15 minutes and I think that will continue to shrink, which is powerful and important. The player experiences, once we get back to normality when we can go to pubs, taverns and sporting events, will only have a huge positive impact on sports betting. If we’re able to do this well under a huge COVID-19 spike in the US, we’re going to be fine. I’m confident that the vaccines being administered will continue to allow us to get back to normal and create a stable environment that everyone can swim in, and grow if they have a good offering. I think this time next year you’re going to see a more robust market that continues to grow, and I’m incredibly optimistic about the online and sports betting industry going forward, both in mobile and retail. GAMINGAMERICA 47

PRODUCT REVIEWS

NEW YEAR, NEW GAMES Gaming America looks at some of the latest products on the market from some of the industry's biggest suppliers.

BLUBERI: CASH ROLLER

INCREDIBLE TECHOLOGIES: PRIZE POOL FIERCE DRAGON AND CACTUS CASH

CASH ROLLER

Bluberi presents Cash Roller, one of its most anticipated new releases. The low-volatility game, which is available on b49 cabinets, has five reels and 20 paylines and features a single progressive jackpot for each denomination, with a higher hit frequency than most games on the market. Built around the quest to offer the best entertainment experience for players, Cash Roller has all it takes to create a buzz and become a hit. Cash Roller is an amusing game in which a character in the shape of a bundle of bills is willing to open ways to incredible wins in a colorful and highly entertaining environment. The animated cash is the personification of money itself: a bundle of bills with a smiling face setting the way to a whirlwind of exciting bonuses. Bluberi taps into its more than 25 years of industry experience to bring together classic features, plus a new and exciting cash machine bonus. Cash Roller offers the excitement of a possibility to win the jackpot at each bonus round, along with sounds and designs that will keep players on the edge of their seat. 48 GAMINGAMERICA

New Prize Pool titles from Incredible Technologies feature a vibrant overhead grid of credit awards that grow until they are won. Both Prize Pool Fierce Dragon and Prize Pool Cactus Cash deliver a bonus event to slot players looking for an anticipation-building instant award feature. Fierce Dragon features 40 lines filled with Golden Ingots and ancient lucky symbols, while Cactus Cash brings the fiesta with a Southwestern celebration of cacti and hot sauce. The overhead Prize Pool grid is what brings the heat to slot floors. The Prize Pool displays credit amounts in vibrant cubes which can be won with four or more Prize Pool scatters. The win potential is huge, as the credit amounts above the reelset are upgraded when gold Prize Pool scatters land â&#x20AC;&#x201C; increasing the pool credits for larger and larger rewards. All prizes remain and grow until they are won. Once four Prize Pool scatters of any color land, players are awarded the credits in the corresponding cube above. Once a prize is won it disappears and cubes are added to take its place. The winning gets wild within free spins as Wild symbols substitute for Prize Pool scatters. Any combination of four Prize Pool scatters and Wild symbols award the corresponding prizes above for crazy cash. Trigger and retrigger free spins with Free Spins scatters to continue the fun. Both Prize Pool titles have been field tested and are now available for placement. Contact your IT Account Manager to learn more.

PRIZE POOL

PRODUCT REVIEWS

JCM GLOBAL: NFC MOBILE IO

JCM selected NFC technology for the device because the short-range connection that is inherent in NFC provides enhanced security, seamless communication and zero interference with other devices. NFC technology has been globally proven as convenient and versatile, and it is the industry standard for mobile payment providers.

PACE-O-MATIC: DRAGON'S ASCENT

NFC MOBILE IO JCM Global continually creates technologies to help operators take their guest experience to the next level. The latest is JCM’s new NFC Mobile IO device. The long definition of NFC Mobile IO is “Near-Field Communication Mobile Input/Output.” The unit is a small form factor networked module that is mounted to the front exterior of an EGM. This enables contactless transactions at any EGM operating with JCM’s iVIZION bill validator, GEN5 printer, and FUZION technology. When JCM’s NFC Mobile IO is installed, players can interact with the EGM using a secure mobile connection, primarily to enable contactless financial transactions. In addition, the device gives operators multiple options to use it with other applications developed by third-party providers. For example, any application can interface with NFC Mobile IO through secure APIs. This allows operators to bring enhanced mobile interaction to players while they are on property. Operators can further future-proof their floors by establishing NFC Mobile IO as the mobile transaction portal for current and future casino applications. With NFC Mobile IO connecting to the player’s mobile device, applications can notify players of available mobile marketing and promotions, expiring player funds, or specific events, greatly enhancing the property’s marketing abilities as well as the player experience. In addition to player convenience, JCM says its NFC Mobile IO enhances operator security. It allows for location-based services and geolocation validation, so as a user interacts with NFC Mobile IO, operators can verify the identity and location of every transaction (financial, promotional, gaming, etc.), and suspicious activity and money laundering can be tracked back directly to all user accounts.

Dragon's Ascent, a classic Aim-and-Shoot video game that awards cash rewards based on player performance, is the latest game from Pace-O-Matic. Layers of skill and strategy combine to create a game that complies with the most stringent laws and regulations, yet is incredibly fun and easy to play. Work together or compete with other players sharing the same playfield. Capture Dragons to save the Kingdom and be rewarded with riches. The game is regulated in D.C., operates in Kansas and Texas, and is certified by Eclipse Compliance Testing as a true game of skill. This makes capturing dragons your most profitable venture. Pace-O-Matic games provide an opportunity to capture new customers and expand venues, while generating additional revenue for local business owners. Their values of integrity, innovation and compliance drives support of small business and unprecedented customer loyalty, and their mission is to build the best-earning games that are legal and defensible. Pace-O-Matic is celebrating over 20 years of innovation and creating games of skill. Since its founding in 2000, the company has built a talented leadership team that always approaches work with honesty and respect. Pace-O-Matic proudly partners with the coin-op industry in each state and employs a team of compliance officers, consisting of former state police officers and liquor control agents, who oversee our games' operation in the market.

DRAGON'S ASCENT

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PRODUCT REVIEWS

NOVOMATIC: LUCKY TWIST LINKED PROGRESSIVE

Eclipse Gaming creates entertaining and memorable gaming experiences that connect with the player. With a focus on the Native American gaming market, as well as select commercial and international gaming markets, we develop top-performing games and innovative solutions that engage the audience and deliver measurable results for our casino, social and casual gaming partners.

LUCKY TWIST These two Asian progressive titles thrill players, each with its own explosive Lucky Twist for the Link: Dynamite Dragon and Money Ki Neko present two distinct games on 30 lines with an electrifying array of bonuses, features and chances for the progressives. Dynamite Dragon comes with scattered dragons, wilds on the three centre reels and a pick & win feature for instant bonus prizes. Three Lucky Twist symbols trigger the Lucky Twist Matrix feature with a central prize collection wheel for extra spins, awards and prizes up to 100 times the total bet and jackpot segments for the major and grand. Money Ki Neko features the traditional Chinese Lucky Cat that keeps its paws crossed as a wild symbol while random Xtra Stax add additional thrills for each base game spin. A mini bonus feature yields instant prizes and three Lucky Twist symbols on the centre reels trigger the Lucky Twist wheel feature that grants up to three prizes for each spin: extra spins, awards and prizes up to 100 times the total bet and jackpot segments for the major and grand. The Lucky Twist linked offer is available for the latest Novomatic single and curved screen cabinets.

ECLIPSE GAMING: CASH LANTERNS Light the way to riches with Cash Lanterns, the first game in Eclipse Gaming’s new Anyline Progressive series. Cash Lanterns features nine rapidly growing line-based progressives, a top progressive that can hit on any payline, and high-hit frequencies when banked together. The Anyline Progressive series features nine shuffling progressives awarded at any bet level. The top progressive is awarded with five jackpot symbols on any active payline at max bet. Scatter symbols on reels two, three and four award five free spins. Lantern Wilds are awarded on three of five free spins. Cash Lanterns is available in two color palettes for added variety. 50 GAMINGAMERICA

CASH LANTERNS

FABICASHLESS SOLUTIONS As a cash access and compliance solutions provider, FABI recognizes the new reality of responsible gaming. The company is dedicated to supporting casinos’ need for contactless and cashless service by enhancing its current offerings and developing new solutions to reduce person-to-person contact within the casino, provide contactless access to funds, and facilitate cashless flow of transactions across the gaming floor. FABIWallet can be funded in a wallet mobile app from the player’s bank account by using a credit or debit card, or by cashing an eCheck, all without having to go to the cage. FABI also can load all kiosk transactions and cage transactions directly into the wallet for a fully cashless experience. FABI Mobile PIN Debit uses a secure, PCI-compliant mobile payment device (Clover) that allows a purchase of chips at the table by processing a PIN debit transaction, hence eliminating the exchange of cash for chips. Once the transaction is processed, a drop copy and customer receipt will print, and the dealer will issue the chips purchased. With all transactions integrated into our compliance Title 31 tracking solution, FABITrack, we are proud to provide the industry’s only true omnichannel cash access, mobile wallet and compliance solution that offers savings, operational efficiency and an improved gaming experience.

Gaming America Jan/Feb 2021

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