Gaming America Jul/Aug 2020

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Jul/Aug 2020

INSIDE: WILL US GAMING NOW EMBRACE DIGITALIZATION DUE TO COVID-19?

OIGA MEMBERS CONFRONT LEGAL AND NATURAL CHALLENGES IN EQUAL MEASURE HOW INVESTORS SHOULD REACT TO THE US CASINO INDUSTRY REOPENING

With a little luck How operators are driven to get back to business 1 GAMINGAMERICA

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 LEAD DESIGNER Laura Fogar DESIGNERS Rebecca Lydamore, Olesya Adamska DESIGN ASSISTANTS Radostina Mihaylova, Aimee Matthews EVENTS MANAGER Mariya Savova WEBSITE MANAGER Tom Powling COMMERCIAL DIRECTOR Deepak Malkani Deepak.Malkani@gamblinginsider.com Tel: +44 (0)20 7729 6279 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 Richard Carr Richard.Carr@gamblinginsider.com Tel: +44 (0) 203 435 5624 Nitesh Patel Nitesh.Patel@gamblinginsider.com Tel: +44 (0) 207 739 5768 Sarah Croft Sarah.Croft@gamblinginsider.com Tel: +44 (0) 203 435 5628 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

JULIAN PERRY, COO, Editor in Chief

CARL FRIEDMANN, Editor

Old-time American folk singer Pete Seeger asked several times in the same song, “When will they ever learn?” It’s a refrain steeped in political despair, and was an emblem of counter protest during an era long gone. But as a rhetorical question, it still resonates today. For either side of the aisle in the Senate, you can freewrite for days on who needs to learn what, but in the confines of this page, I’ll have to stick to something more specific.

The US has a puzzling and inconsistent grasp of modernity. On the one hand, well, Silicon Valley. On the other, a morally confused interpretation of online gaming that is relatively dormant compared to other countries, and yet stands to gain the most. A lot of factions are in play here, one of them being the self-defeatism of the Coalition to Stop Internet Gambling as Tim Poole explains in his feature on missed opportunities in the US, starting on page 48. Despite strides made in New Jersey and Pennsylvania, he says, “retail operators have often seen online as the enemy.” Even with the knockout blow that hit land-based casinos during the pandemic, it’s easy to see through swollen eyes that online casino has thrived. “It’s a clear message to all retail operators to put aside perceptions against online and utilize the digital options now available to them in abundance,” he adds. In other words: carpe diem, folks! Of course, the flip side is that the more out of touch decision makers become, the more illicit operators thrive on the demand that already exists. Now is the time for a collective effort to capitalize on digital transformation of online gaming in the US. This is the central theme in this issue’s panel debate, starting on page 8.

Iqbal Johal explains that because sports betting is only available in Oregon through the lottery Scorecard app via the Chinook Winds tribal casino, it’s still in its infancy.

“Oregon State Lottery CEO Barry Pack said he believes the pandemic will force a digital transformation a lot quicker than it would have come previously,” says Johal. After all, state legislators face a $1bn shortfall so dismissing online and mobile gaming at a time like this isn’t a good strategy. Johal adds that Maryland Lottery and Gaming director Gordon Medenica agrees with Pack, who says, “this could be a sea change for the lottery industry” and that “we’re probably more capable of enforcing responsible gaming guidelines in a digital environment.” We can only stand to gain a strengthened industry if the US capitalizes on online opportunities. This much we know. Now we just have to act.

CONTRIBUTING THIS ISSUE

CREDIT MANAGER Rachel Voit WITH THANKS TO: Sheila Morago, Andrew Fenton, Adam McLaren, Gene Johnson, Bill Pascrell III Gambling Insider magazine ISSN 2043-9466 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.

SHEILA MORAGO

OIGA

ADAM MCLAREN

Moody’s Investor Service

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CONTENTS 06

FROM THE TOP

30

After the AGA’s call for US media outlets to stop promoting offshore sportsbooks, Tim Poole analyzes the difficulties posed by sports betting’s blurred lines.

08

DEBATE

The latest updates from the Global Gaming Awards Las Vegas 2020, with category sponsors and nominees confirmed.

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Will US gaming now truly embrace digitalization as a result of COVID-19?

Iqbal Johal, Owain Flanders and Tim Poole put their best cases forward.

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CASINO UPDATE

STAYING IN THE LOOP

34

ONLINE POKER: THE COMEBACK KID

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GAMING THE SYSTEM

38

RETRAINING FOR THE NEW NORMAL Industry experts from ICE NA Digital discuss the road back for casino employees post COVID-19, and how to create an enjoyable yet safe experience.

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WHAT NEXT FOR G2E In a Gaming America exclusive, Tim Poole speaks with G2E, event director Korbi Carrison and AGA SVP for industry relations Allie Barth to discuss the cancellation of this year’s G2E and remaining options to explore.

GAME CHANGERS We highlight some of the key products hitting the market and casino floors as new regulations dictate a safety-first landscape.

44

Andrew Fenton, SVP of sales for Silent Eight, a Singapore-based RegTech, discusses how one growing area – AI – can help address another growing concern – AML.

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OPENING THE MARKET A panel at SBC Digital Summit North America discussed the current state of affairs with regulation in the US, and what’s key to overcoming the challenges to pass sports betting in certain states.

Gaming America assesses the significance of online poker’s resurgence during the pandemic by looking into its recent history in the US.

24

A TIMEFRAME FOR RECOVERY Industry experts speak at ICE North America Digital about the effects of COVID-19 on the US gaming industry and when the market might recover.

Iqbal Johal provides an update into the tribal gaming sports betting landscape, and the importance of tribal interests being considered in proposed legislation.

22

INVESTOR’S CORNER Tim Poole speaks to Adam McLaren, VP and senior analyst at Moody’s Investor Service, about how investors should react to the US casino industry’s reopening.

Across the country, the pandemic is still forcing casino closures, and in some cases re-closures, as steps to get back on an even footing are being tripped up.

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GGA SHORTLIST

STATE OF PLAY Sheila Morago, executive director of OIGA, calls for increased flexibility as tribal members confront legal and natural challenges in equal measure.

48

PUTTING IT ON THE LINE Tim Poole explores the outdated notion that digital gaming hinders its land-based counterpart, urging a hastening of online adoption within the US market.

FROM THE TOP

FROM THE TOP: OFFSHORE? UNSURE After the American Gaming Association’s call for US media outlets to stop promoting offshore sportsbooks, Tim Poole analyzes the difficulties posed by sports betting’s blurred lines.

In a previous edition of Gaming America, I examined whether US operators should address the issue of offshore competition head on through aggressive advertising, educating the customer and informing them of the various cons of using an illegal sportsbook.

Since then, American Gaming Association CEO (AGA) Bill Miller has also written about the illegal market and what’s needed to drive it out. Right now, as Miller points out, the offshore industry’s existence isn’t the most immediate problem – it’s that mainstream media outlets across the US are promoting it.

How can a US bettor know a product is illegal if it is mass marketed on mainstream TV channels? This is the very juxtaposition perpetually facing the regulated sports betting market in the US. While regulated companies will aim to follow the rules dictated by their license, and crucially pay taxes on their earnings, offshore 6 GAMINGAMERICA

operators have an unfair and illegal advantage by fulfilling neither.

But how can a player distinguish between right and wrong if both are advertised by the likes of Fox Sports, Reuters, Yahoo Sports, the Wall Street Journal and more?

That’s why Miller is correct to call on the mainstream, or any form, of media first and foremost. How can dismantling the illegal market, difficult enough as it is, be achieved with widespread disregard from national media outlets reaching millions of fans across the US? According to the AGA CEO, an estimated 100 million American adults will be able to place a legal sports bet in their home state by the end of 2020. Yet the sum of illegal wagering remains a considerable threat to the regulated market share.

He wrote: “PASPA never came close to doing what policymakers intended. Instead of protecting competition, the failed law

FROM THE TOP

perpetuated a massive, $150 billion-a-year illegal marketplace that left athletes and consumers vulnerable. Those protections only exist when sports betting can come out of the shadows and under the watchful eyes of experienced gaming regulators, which is why the American Gaming Association remains committed to expanding these safeguards today.

“Unfortunately, many consumers are still unable to distinguish between safe, legal US sportsbooks and unregulated offshore operators. This becomes especially difficult when mainstream publications continue to legitimize the dangerous illegal market, blurring the lines between legal, regulated sports betting and the predatory, unregulated offshore market. One doesn’t have to look too far to find national outlets citing offshore books in their recent coverage, with some pieces reading like they’re copied and pasted from a PR pitch.”

The distinction between legal and illegal operators is “essential,” according to Miller, with the sports betting space one of the most highly regulated industries in the US. The illegal sports betting market, by comparison, “funds nefarious activity like money laundering, drug trade and human trafficking” while lacking “any responsible gaming measures,” he adds. With a “storied history” of failing to pay winners and failing to put up safeguards for financial data, Miller and the AGA are deeply concerned by the offshore sector.

“HERE’S THE STARK DIFFERENCE IN PLAIN TERMS: ILLEGAL, UNREGULATED SPORTSBOOKS ARE PREDATORY. RESPONSIBILITY FOR EDUCATING THE PUBLIC IS SHARED AMONG EVERYONE IN THE SPORTS BETTING ECOSYSTEM. MEDIA ORGANIZATIONS SHOULD DO THEIR PART, TOO.” – BILL MILLER

“Here’s the stark difference in plain terms: illegal, unregulated sportsbooks are predatory,” Miller concludes. “Responsibility for educating the public is shared among everyone in the sports betting ecosystem. Media organizations should do their part, too.”

As ever, there’s no easy remedy. But it’s time, perhaps, to take the first stages of a deep dive into exactly why media outlets continue to promote offshore books. Whether through the AGA or anyone else, a degree of data collection within these media organizations would be helpful to no end. How useful, for instance, would a survey be to address whether executives, employees and viewers even know the difference between a legal and illegal sportsbook, or whether these outlets have actually negotiated deals in place with these companies?

Even as the right course of action legally, the reality is media outlets may need persuading to drop the odds of an unregulated book from their TV feeds. How can the sector appeal to them in trying to enact this change? Perhaps TV channels and online blogs link to sites simply because they offer better odds – odds enabled by reduced costs without any taxation or compliance department salaries. The first step is always to identify exactly what the industry is dealing with, and why.

In the case of Fox Sports, it’s perhaps doubly perplexing. Not only does the company share a brand name with Fox Bet – a licensed operator owned by Flutter Entertainment – parent company Disney owns a stake in regulated operator DraftKings. Imagine if, by contrast, Fox (or any other mainstream broadcaster) used its platform as a force for good in this area. Instead of promoting the odds of illegal companies, how powerful would it be if Fox Sports displayed the message ‘Don’t bet with illegal bookmakers’ regularly across its newsfeeds?

As Miller initially pointed out, the origin of this dilemma was PASPA itself. For years, media organizations would advertise illegal odds as these were the only ones available if they wanted to discuss betting content. Now that sports betting has been legalized across numerous US states, however, we’re seeing a delayed response to the modern-day betting environment.

Rather than a lack of knowledge, or having an agreement in place with said offshore books, perhaps media organizations simply haven’t had time to adapt yet. Here’s where the AGA itself can further push the agenda, as it is trying to do.

The whole industry can help, though, and this is where more direct marketing and advertising can still play its part. If players have gotten used to better odds and greater convenience with the same illegal bookmakers down the years, what can the industry do to tempt them out of this bubble? As well as signing sponsorships and marketing partnerships with sports teams and sports leagues, perhaps operators can sign agreements with more media firms, like MGM has done with Yahoo. But maybe they could also include a new clause – any advertising of illegal bookmakers is to be penalized with the contract being made null and void. That would make companies sit up and listen.

GAMINGAMERICA 7

DIGITALIZATION

DEBATE: AN ACCELERATION OF DIGITALIZATION Will US gaming now truly embrace digitalization as a result of the COVID-19 pandemic? Iqbal Johal, Owain Flanders and Tim Poole put their best cases forward.

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DIGITALIZATION

IQBAL JOHAL: CONSENSUS CRUCIAL TO DIGITAL TRANSFORMATION IN THE US When it comes to the online gaming industry, it’s fair to say the US has lagged behind the majority of other major markets until now. It was only two years ago that PASPA was overturned to legalize sports betting, with the vertical now legal in 22 states.

Many states still don’t allow any form of online gaming either, in stark contrast to European markets where online betting is crucial for operator revenue. Between October 2018 and September 2019, the total gross gaming yield for online betting in Great Britain was $2.62bn, according to statistics from the Gambling Commission.

However, with such a large reach, once online becomes even more prominent in the US, there will be no stopping it. And maybe it’ll take a global pandemic to force that acceleration.

It’s no secret casino operators have incurred huge losses as a result of the COVID-19 outbreak. Properties were forced to close in mid-March and began reopening at the start of June, but under strict health and safety measures. A case in point is the 99% drop in year-on-year revenue generated by casinos in Nevada for May, down to $5.8m. Considering Las Vegas is known worldwide as one of the most popular gambling hotspots, the figures demonstrate the need for operators to recoup their losses from an alternative revenue stream.

During a virtual industry conference in April, a panel discussed the effect the coronavirus has had on the mostly land-based US lottery market, suggesting it could bring about a digital transformation. While sports betting is available in Oregon, it’s only through the lottery ‘Scorecard’ app via the Chinook Winds tribal casino. Oregon State Lottery CEO Barry Pack said he believes the pandemic will force a digital transformation a lot quicker than it would have come previously.

The fact state legislators are facing a $1bn shortfall means any negative opinions on online and mobile gaming will surely change, knowing the vertical is an effective method to make up some of the shortfall. Maryland Lottery and Gaming director Gordon Medenica agreed with Pack, saying he thinks “this could be a sea change for the lottery industry” and that “we’re probably more capable of enforcing responsible gaming guidelines in a digital environment.”

While relying on bricks-and-mortar venues has long been a tradition in the US industry, the time has surely come to join the digital age.

But there are barriers that stand in the way.

As we touch upon in our tribal sports betting feature in this edition of Gaming America, the topic is a complex one with stakeholders often unable to reach a consensus. California has the potential to be a booming sports betting market worth up to $3.2bn, and there are currently two separate bills being pushed, one by the tribes. The tribes protecting their own interests – rightly so – is the main barrier to sports betting being

legalized in the state, according to Bill Pascrell III. Tribes getting on board with legislation is key to getting sports betting, and indeed online betting, passed in several states, but that’s up to the relevant stakeholders to find some common ground.

The realization of what a digital transformation can bring to the US gaming industry is now apparent because of the impact COVID-19 has had on land-based operations. Sadly, it’s not as simple as a complete move to online overnight and it might take lengthy negotiation, but the positives of such a move are there for all to see.

“WHILE RELYING ON BRICKS-AND-MORTAR VENUES HAS LONG BEEN A TRADITION IN THE US INDUSTRY, THE TIME HAS SURELY COME TO JOIN THE DIGITAL AGE. ” GAMINGAMERICA 9

DIGITALIZATION

OWAIN FLANDERS: AN OVERDUE SHIFT TO CASHLESS “Necessity is the mother of invention.” If you tuned into one of the many digital industry summits organized during the COVID-19 pandemic, I’m sure you heard these words uttered once or twice by industry experts.

While it might be an overused cliché during these unprecedented times, there’s also plenty of truth in it. It’s something we saw across the industry as COVID-19 restrictions forced operators and suppliers to think on their feet. The lack of sport and closure of land-based operations led to a number of drastic business moves. There have been investments in alternative verticals such as esports, online casino and poker, a string of mitigating actions for cost-cutting and even instances of drive-thru betting services.

One shift we've seen across the globe as a result of the pandemic is the transition toward digitalization – a topic particularly prominent in the US. This shift incorporates a number of elements. Of course, there’s the migration from land-based casinos and sportsbooks to online or mobile, but one factor that perhaps generates less attention is the transition toward digital payments.

As land-based betting properties reopen across the US, it’s evident that while cash may still be “king,” the payment of that cash must go through a modernization process – one perhaps well overdue.

This shift, which is a result of safety concerns over the handling of physical cash, has prompted payment companies to redouble their efforts in marketing cashless systems toward land-based casinos.

From speaking to those within the payments industry, it’s evident that cashless systems have been generating a lot of interest from retail gaming businesses in the US for some time, and it’s not difficult to see why. For land-based operators, going digital with payments has a whole host of benefits in both cost saving and customer protection.

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“FROM SPEAKING TO THOSE WITHIN THE PAYMENTS INDUSTRY, IT’S EVIDENT THAT CASHLESS SYSTEMS HAVE BEEN GENERATING A LOT OF INTEREST FROM RETAIL GAMING BUSINESSES IN THE US FOR SOME TIME, AND IT IS NOT DIFFICULT TO SEE WHY.” One central issue with land-based casinos is their inability to apply the same responsible gambling measures we see in the online space. Although memberships are usually a pre-requisite for anyone wagering at a casino property in the US, it’s significantly easier to retain anonymity betting in person than online. Online operators also offer customers an array of safer gambling tools through which they can limit their own spend. With the absence of previous financial records, this is difficult to apply in a physical casino dealing mainly in cash.

By digitalizing payments, land-based casinos are able to take these same safer gambling features found online and apply them in the physical space. Deposit limits can be set for customer accounts and exclusions can be applied to prevent certain bank accounts from depositing in gambling establishments at all. With that in mind, the transition to cashless makes perfect sense from a safer gambling perspective.

While COVID-19 may have been the straw that broke the camel’s back, the shift toward digital payments has been approaching the land-based industry in the US for some time.

For that reason, it can be assumed this is one transition that's here to stay for the foreseeable future.

That said, it’s likely cashless will be integrated rather than replacing cash gaming altogether. Once safety concerns related to COVID-19 subside, cash will most likely return, albeit in a reduced sense. In the words of Samuel Barrett, director of gaming at Trustly, who spoke with Gambling Insider for its ‘Future of Cash’ feature: “The end of cash is definitely not anytime soon.” While we can certainly expect more integration with cashless gaming, there will always be those traditional gamers who prefer to handle their payments and winnings in paper.

DIGITALIZATION

TIM POOLE: IS OPPOSITION TO ONLINE SIMPLY TOO GREAT?

As I argue in my online gaming feature later in this issue, and as my colleagues have ably argued in this debate already, the necessity for digitalization has never been greater. That’s without emphasizing the fact it should have been a growing priority even before the COVID-19 pandemic. The repeal of PASPA for sports betting and the booming revenue figures of New Jersey’s online casinos have illustrated very simply how important digital gaming can be.

But in a region where an organization such as the Coalition to Stop Internet Gambling exists, it’s clear US gaming has – at the very least – slightly different attitudes to thriving online markets across Europe. And it begs the question: Does the majority of the US industry, with its reliance on billions in land-based dollars, really see digitalization in the same light?

Protectionism has been a common feature of US economic policy throughout history, especially in regard to the current administration. Indeed, there’s a certain degree of protectionism when it comes to shielding the success of retail casinos vs online gaming. My concern is this sentiment may prevail among retail operators who see digitalization as an ‘us vs them’ scenario. While online operators such as DraftKings and FanDuel continue to grow unabated, if digitalization is not embraced, the purely land-based industry will eventually fall behind. This subsequent divide will weaken US gaming as a whole.

There are further barriers in a legal sense. Online may have been adopted with open arms in states like New Jersey and Pennsylvania, and within the sports betting sector in particular, yet another problem holds the industry back in this regard – and not one of its own making. Alas, as I’ve written before, the need to educate politicians and policymakers is perhaps the biggest single barrier to mass mobile adoption across the US. 12 GAMINGAMERICA

With political opposition to online gaming rife within a state as influential as New York, for instance, there will always be a question mark over how wide-ranging US gaming’s embracing of the digital world can be. This is perhaps best demonstrated by the archaic principle some states have enacted of allowing online wagering only if a bettor has registered in person first.

When it comes to online casino and poker, the obvious barrier to entry remains the Federal Wire Act. The Department of Justice’s contradictory reinterpretation of the act in 2018 has since been overruled in the courts, but the DoJ continues to challenge lawful rulings against it and consistently attempts to pursue the validity of its new interpretation. All this is done simply to stagger the momentum of online gaming in the US. For me, the need for digitalization is obvious, while it poses no threat to the success of hotels and physical casinos.

Cannibalization has proven to be minimal and retail gamers will still want the full casino experience. That will never change. But one question is whether this is obvious to land-based gaming companies – or any executives reading this article right now.

The other question is whether those who do agree will be allowed to respond by regulators or politicians.

More and more players have been moving online in the last few years and if retail casinos don’t act (or aren’t allowed to act) to satisfy this demand, these bettors will simply head to the illegal market.

Yet if this is a view certain companies, regulators and politicians didn’t take before the pandemic, it’s likely they will simply wait for casinos to reopen without giving a thought to evolving their online offerings. I would love to be proved wrong, of course. And if I am, I won’t be the biggest winner – the industry itself will.

CASINO UPDATE

PROCEED WITH CAUTION Across the country, the coronavirus pandemic is still forcing casino closures – and in some cases reclosures – as steps to get back on an even footing are being tripped up.

As of July, several casinos in the US have either reclosed or been ordered to shut down for a set period. Indeed, properties across the US are still being affected by the COVID-19 pandemic to enough of a degree for operations to temporarily halt. In Miami, Churchill Downs’ Calder Casino, Hialeah Park, Casino Miami and Magic City have reclosed.

Gila River Indian Community also closed its three Phoenix area casinos for the second time, despite reopening them again since.

Meanwhile in Michigan, two employees of Legends Diner in Soaring Eagle Casino tested positive for COVID-19, and Rush Street’s Rivers Casino in Pittsburgh was ordered to close in early July for a week following an employee testing positive.

Mississippi now requires all casino guests to wear facemasks and there are worries casinos will be forced to close again in Nevada following Governor Steve Sisolak’s warning that all businesses must enforce protocols on mandatory face coverings.

Elsewhere, New York City has entered Phase III of its reopening, as stated by Governor Andrew Cuomo, but this will not include casinos or movie theatres. A decision is being finalized on the limits of reopening schools in September, while the Mid-Hudson region entered Phase IV of reopening on 7 July and Long Island on 8 July. However, NYCs casinos will remain closed as the state government continues to review scientific data.

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Penn National Gaming is set to lose 1,150 workers at Louisiana locations in August due to the impact of the coronavirus pandemic. A number of employees at L’Auberge Hotel and Casino in Baton Rouge, L’Auberge Casino Resort Lake Charles, Boomtown Casino & Hotel New Orleans and Margaritavilla Resort Casino in Bossier City will be laid off.

Penn National is attributing the job losses to uncertain business volumes as a result of social distancing requirements, having filed notices with the Louisiana Workforce Commission.

Louisiana Governor John Bel Edwards ordered the state’s casinos to close in March but, even with reopenings across Louisiana and the US since, revenue and EBITDA are not expected to return to pre-pandemic levels for several months.

Similarly, Maryland casinos are struggling to cover losses imposed by the COVID-19 lockdown despite reopening at 50% capacity. According to the Maryland Lottery & Gaming regulatory agency, revenues in June were only $34.9m compared to $142.9m the previous year.

The state obtained only $14.6m from June’s gaming revenue.

All of Maryland’s casino operators were forced to halt operations in mid-March.

Three smaller casinos, Ocean Downs, Hollywood Perryville and Rocky Gap, resumed work mid-June, while larger venues MGM’s National Harbor, Live! Casino & Hotel and Horseshoe Baltimore opened at the end of June. Live! Casino had the highest revenue with $15.9m, National Harbor brought in $8m and Hollywood Perryville earned $3.5m. The other three remaining casinos didn’t reach the $3m mark each.

Deciding when to reopen casinos in the US comes down to a delicate balancing act. As we have seen in a number of states, opening them too soon and they’ll only be forced to close as COVID-19 cases rise. But leave it too long and the job losses of Penn National Gaming will be repeated across the US industry as revenues plummet.

A phased reopening such as the one in New York seems like the safest option for public safety, but time will tell how damaging this continued period of closures will be for the region’s casino operators. It’s clear from Maryland and Louisiana that casino reopenings have not put an end to operator troubles.

Unfortunately, it seems there will still be a mountain to climb to combat losses for months to come.

TRIBAL GAMING

STAYING IN THE LOOP

Iqbal Johal provides an update into the tribal gaming sports betting landscape, and the importance of tribal interests being considered in proposed legislation.

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Tribal gaming in the US is a money-spinning industry.

It’s estimated to be worth $33.7bn, with 460 gaming establishments country-wide, operated by 240 federally recognized tribes in 29 states. The sovereignty status in the areas in which tribes operate gives states limited ability to forbid gaming there, and limited powers to pass certain legislation, with policy issues overseen by the Bureau of Indian Affairs (BIA), and decided in the federal court system.

However, when it comes to sports betting, it has made passing legislation to legalize it in certain states improbable, with the main stakeholders at loggerheads, unable to reach a compromise.

TRIBAL GAMING

Since PASPA was repealed in May 2018, sports betting is now live in 18 states and legal but not yet operational in four more, taking the total tally to 22. There are a further 16 states with active legislation and only seven states which haven’t had any, and five with ‘dead’ legislation.

Currently, there are six states where sports betting is operated by tribes in one form or another: New York, Oregon, Michigan, Montana, Mississippi and New Mexico. However, in some of these states, sports betting is only available in tribal casinos or is retail only, such as in New York or New Mexico; Washington State has passed legislation but has not launched tribal sports betting yet.

Tribes are often criticized for being slow in implementing sports betting, but the reasons are much deeper than that, according to someone with plenty of experience on the matter. Gene Johnson, executive VP of Victor Strategies, the professional firm that focuses on Indian gaming, told Gaming America that while there’s an emphasis on profit from gaming, it’s mainly about obtaining economic self-sufficiency for the tribes.

“Tribes do not pursue gaming for the same reasons that commercial gaming companies do,” Johnson explains. “It’s about maintaining sovereignty, preserving culture and providing for the next seven generations.

“Having a casino has enabled tribes to have economic self-sufficiency; and children can go to college, get educated, and be taught their own language. These are all things gaming has brought about for the Indians that people tend to forget.”

While sports betting is a new vertical in the US with huge potential revenue, you could argue that it’s not as

BILL PASCRELL

GENE JOHNSON

important to the tribes as what they’ve achieved with Indian gaming. With tribal gaming nearly a $34bn industry with strained relations with governors in many states, pushing sports betting could be seen as too much of a risk.

“Tribes are certainly on board for sports betting; they understand that this is not internet poker and it has direct correlation to casino gaming,” Johnson mentions. “They want sports betting but they want it under their own terms.

They don’t want to sacrifice the economic self-sufficiency they’ve achieved in order to get sports betting.”

Another challenge to consider is the Indian Gaming Regulatory Act, which was passed in 1988. While it allows tribes to offer gaming on their reservations, there are no provisions for mobile betting. The Mohegan Tribe and Seminole Tribe are among the tribes that offer mobile betting, with the latter offering it in its Hard Rock Casino in Atlantic City, but under state regulatory regimes that include taxation to the state. You can count that as another obstacle.

Looking at specific states, California is a potential sleeping giant when it comes to sports betting. It has the potential to be the largest sports wagering market in the US, with annual estimates ranging from $750m to $3.2bn, depending on the legislation and how available sports betting would become.

However, with 25% of the $34bn tribal gaming is worth being generated in California, the tribes are understandably concerned about endangering existing options by accepting legislation that might not be in their best interests.

There are currently two sports betting bills proposed in California. Last year, in conjunction with the horse racing GAMINGAMERICA 17

TRIBAL GAMING

tracks, the tribes proposed a constitutional amendment that would allow sports betting. It would legalize sports betting at limited locations, including Indian gaming casinos and licensed racetracks, which would be taxed at 10%.

The signature gathering initiative, which needs 1m signatures before being put to a vote at the November elections, was halted by the Governor’s COVID-19 stay at home order. The tribes have recently been granted an extension to the campaign, which reached more than 950,000 votes, and will now likely qualify for the 2022 election.

However, there’s a rival sports betting bill in the state, proposed by Democratic senator Bill Dodd, and assemblyman Adam Gray, titled SCA-6. The bill would legalize mobile and online sports betting for tribal casinos and four horse racetracks, but the tribes would only be able to conduct mobile sports betting in partnership with a major sports betting provider.

The online operator license fee would be set at $5m and it would allow card rooms to offer banked games such as blackjack. The bill has since been pulled from being included on the ballot at the November election with Dodd citing the impact of COVID-19, but is now eyeing 2022 to push through the legislation.

The bill was opposed by the tribes, with the Pechanga tribal chairman Mark Macarro stating the provisions for the card rooms made the proposals a non-starter. Less foot traffic at tribal casinos and limited regulations are also concerns for the tribes.

Johnson alluded to the challenge to tribal casino gaming exclusivity posed by the card rooms as being the biggest hurdle to passing any sports betting legislation in California.

He said: “Card rooms now offer player-banked games that are widely considered illegal under the state constitution.

“Originally, the card rooms were only supposed to allow peer-to-peer games such as poker. They now operate blackjack and have third-party dealers assume the role as the bank, through a corporate entity, which is considered by the tribes as directly contradicting the state constitution.

“Also with the card rooms, you have to keep in mind they have a dismal record with regulatory compliance. It has been noted by a former CA regulator that there’s been more federal raids on card rooms in the state in the last five years than any other gaming operations nationwide.

“The tribes are very reluctant to accept the card rooms as responsible gaming providers. People of California should be concerned about that too.”

Johnson concludes on the California topic, believing there is still hope of legislation being passed in 2022 if the signature-gathering effort succeeds.

While tribes are protecting their own interests, it can be argued this is acting as a barrier to sports betting being 18 GAMINGAMERICA

SHEILA MORAGO

legalized in the state. Bill Pascrell III Esq., trustee at GVC Foundation US and partner at Princeton Public Affairs Group (PPAG) certainly believes so, with perhaps some common ground and negotiation needed.

Pascrell tells Gaming America: “The primary barrier to sports betting being legalized and regulated in California are the tribes. The tribes need to be a part of the conversation and a part of the solution.

“Once the tribes are comfortable with a legal process pursuit, that will accelerate sports betting happening in California. I do believe we're making progress, but I don't see it happening in the relative near future, within the next year.”

However, you could say the situation with tribal gaming in Oklahoma is a much more serious case. Despite Oklahoma being the second-largest Indian gaming state with more than 100 tribal casinos, it has been a chaotic time, leaving sports betting legislation languishing in the background.

The tribal compacts in the state enacted in 2004 were scheduled for renewal by January 2020. However, rather than consulting with the tribal governments, state Governor Kevin Stitt issued an op-ed in July 2019 that erroneously claimed the compacts would automatically expire on 1 January. He then demanded immediate renegotiation at a higher tax level than typical compacts across the US, even though states cannot tax tribal governments, which is left up to the US federal government.

TRIBAL GAMING

The tribes opposed the Governor’s attempts and began a lawsuit against him, with nine tribes continuing in their litigation, despite the Otoe Missouria and Comanche Nation signing new compact agreements, which included sports betting. This was not in the Governor’s power and was rejected by Chief Judge Timothy DeGiusti, who said in a ruling that “it would be inappropriate for a federal court to interfere in the resolution of such a sensitive state law matter, which implicates important concerns of sovereignty and comity that underlie many federal abstention doctrines.”

That led to the two tribes being removed as members of the Oklahoma Indian Gaming Association (OIGA) for the rest of 2020, based on a bylaw that states “a member tribe found by a vote of the Board of conduct not in the best interest of the Association may be suspended for the remainder of the calendar year.”

Speaking about the dispute with Stitt, OIGA executive director Sheila Morago told Gaming America: “We believe Chief Judge DeGiusti’s ruling to be appropriate on this matter, which moves us one step closer to resolving this unnecessary situation.”

In terms of the current state of sports betting legislation in Oklahoma, Morago commented: “It simply didn’t fly in the first year. It was included in the ball-and-dice legislation the following year and got pulled from that. We tried again in the next session, but between the compact dispute with Oklahoma’s Governor and the pandemic, the effort came to a temporary halt.

“At this point, we can’t know what a sports betting offering would specifically look like. It’ll depend largely on the appetite of the legislature and what the model would look like. When we get to the point of being able to offer sports betting, there will be appropriate discussion in each tribe to determine how or if they might choose to proceed.

“The biggest hurdle we face is still Gov. Stitt’s refusal to recognize that the gaming compacts have renewed. It’s impossible to predict the timing for the process.”

Johnson adds to the Oklahoma situation, saying prior to the issues with Stitt, tribes were planning to introduce legislation that would’ve seen sports betting begin in January, but that effort has now been shelved.

He said: “It will be very interesting to see what happens as tribal gaming is huge in Oklahoma. It provides so many jobs and local infrastructure. These jobs are not just for Indians, these are for people throughout the state. The Governor is trying to divide the state between Indians and non-Indians and I don’t think it will work.”

In terms of which state is next on the horizon for legalizing sports betting, Pascrell believes Connecticut is the most likely, especially with the Foxwoods and Mohegan Sun tribes having been supportive of several legislative initiatives.

20 GAMINGAMERICA

“TRIBES DO NOT PURSUE GAMING FOR THE SAME REASONS THAT COMMERCIAL GAMING COMPANIES DO. IT’S ABOUT MAINTAINING SOVEREIGNTY, PRESERVING CULTURE AND PROVIDING FOR THE NEXT SEVEN GENERATIONS. HAVING A CASINO HAS ENABLED TRIBES TO HAVE ECONOMIC SELF-SUFFICIENCY; AND CHILDREN CAN GO TO COLLEGE, GET EDUCATED AND BE TAUGHT THEIR OWN LANGUAGE.” – GENE JOHNSON As Pascrell says: “The most recent of which was introduced

by Representative Joe Verrengia, who introduced House Bill 7311, which would authorize Connecticut sports betting at tribal casinos, potentially commercial casinos, offtrack betting parlors, online and with the Connecticut lottery.

“This legislation has had significant input by the tribal gaming interests and most likely would have passed by now if not for the impact of COVID-19. I believe once we're able to get to a new normal, post-COVID, this will immediately be revisited. Connecticut has a very beneficial model that always takes into consideration tribal interests and balances it with non-tribal gaming interests.”

And balancing the interests of all stakeholders will be key for sports betting to be passed in several more states in the upcoming years. Obviously tribes also need to be involved in legislation and having their interests taken into account. But legislators, stakeholders and tribes all working together is essential, otherwise more situations such as the problems that have arisen in Oklahoma will continue to pop up.

RETURN OF POKER

ONLINE POKER: THE COMEBACK KID Gaming America assesses the significance of online poker’s resurgence during the COVID-19 pandemic by taking a look into its recent history in the US. America loves a good comeback story. From a broken-legged Karate Kid to an ageing Rocky Balboa, there’s always been great respect for those who can live by the timeless words of Chumbawamba: “I get knocked down but I get up again.”

After experiencing a rocky (no pun intended) few years, the US online poker market could also have been considered down-and-out. However, the market seems to be undergoing a comeback story of its own, albeit through rather circumstantial means. In locking potential customers at home and cancelling most major sports competitions, COVID-19 suddenly placed online poker operators within the small category of gambling companies able to benefit from an otherwise dire situation.

Of course, the story of poker in the US is as old as time itself, but online poker has experienced a different lifespan, one that’s seen a considerable shift in popularity over the last two decades.

For us to understand the significance of its recent unprecedented growth, it’s important to look back at this history of highs and lows.

Although the history of real money online poker stems back to 1998, its first real explosion in popularity in the US occurred in the early 2000s with the Moneymaker Effect. In 2003, Chris Moneymaker 22 GAMINGAMERICA

claimed victory in the main event of the World Series of Poker (WSOP) after winning his entry with a $40 buy-in. Online poker suddenly became a viable skill-based way for amateur players to earn money from home, and Moneymaker’s name became synonymous with the vertical’s growth in the following years.

As a result of this spike in popularity, 2003-2006 became known as the glory years of online poker in the US. In 2003, the number of players in the WSOP main event was 839. Just a year later, that number more than tripled. By 2006, the WSOP main event saw a record 8,773 players compete for the $12m first place prize. The fact that this number still represents the peak for the tournament to this day demonstrates the detrimental effect of the events that followed.

In 2006, President George W. Bush introduced the Unlawful Internet Gambling Enforcement Act (UIGEA) which saw an end to US operations for the majority of online poker operators. Those who did continue to operate in the US would come to regret it. In 2011, a number of top online poker operators were penalized for processing transactions in direct transgression of UIGEA, including PokerStars, Full Tilt Poker and Absolute Poker. The day would become known as Black Friday in the online poker world, as it saw the three largest

RETURN OF POKER

poker sites in the country shut down and their domains seized, along with their customers’ accounts and funds.

Adding fuel to the fire, a number of charges were filed against Full Tilt Poker after it failed to pay off players following the forced shutdown of its website. In 2012, PokerStars reached an agreement with the Department of Justice, which saw the operator purchase Full Tilt in an effort to save the brand from extinction completely.

Demonstrating the dire circumstances surrounding online poker at that time, in acquiring the company, the operator also adopted almost $1bn in fines.

Of course, US online poker has seen some progress since 2006.

Nevada and Delaware were the first two states to offer regulated online poker in 2012, and other states have followed since then.

However, it’s clear that online poker activity in the US has been significantly hindered by the events of the past two decades – that is, until COVID-19 lockdowns reached US shores.

For those poker operators who have been able to capitalize on the conditions of lockdowns, it’s been a period of significant growth. This is true not just for the US industry, but across the globe, with some online poker markets doubling in size over the first few months of 2020. Ivonne Montealegre, founder and event director of the Malta Poker Festival, described the lockdown-fuelled comeback as a “second wave even bigger than the Moneymaker,” and as we look at the evidence from US poker operators it would be difficult to disagree.

Despite the brand’s troubles in 2011, the Stars Group currently operates its PokerStars-branded real-money poker and casino products in New Jersey and Pennsylvania. The company saw significant growth across these products in Q1 2020, generating revenue of $735m for the quarter, a rise of 27% year-on-year.

Despite the pandemic’s impact on the operator’s sports betting segment and Fox Bet product, increased customer activity across its online poker and casino product offerings more than made up for any disruption from the beginning of March.

In fact, as a result of this spike in poker activity, the Stars Group shifted its marketing efforts behind PokerStars. The operator launched the first Spring Championship of Online Poker in April in its two active states, with a total prize pool of $2m in Pennsylvania.

Meanwhile, 888 Holdings reported a 60% year-on-year increase in US traffic for 888poker in April. Yaniv Sherman, head of commercial development for 888, confirmed that the company’s Interstate Poker Network, which stretches across multiple states, had been majorly beneficial in taking advantage of increased poker activity. Sherman described “similar trends” across the company’s global poker network – something he explained as “a testament of a recreational destination that people are enjoying while sheltering in place.”

Another by-product of the pandemic has been the shift toward the digitalization of US-based poker events. This year, the WSOP tournament became an online-only event, and GGPoker made history by offering the biggest guarantee in online poker tournament history with the event’s $25m prize. Expressing the importance of such a significant moment, Ty Stewart, executive

“DESPITE THE BRAND’S TROUBLES IN 2011, THE STARS GROUP CURRENTLY OPERATES ITS POKERSTARSBRANDED REAL-MONEY POKER AND CASINO PRODUCTS IN NEW JERSEY AND PENNSYLVANIA. THE COMPANY SAW SIGNIFICANT GROWTH ACROSS THESE PRODUCTS IN Q1 2020, GENERATING REVENUE OF $735M FOR THE QUARTER, A RISE OF 27% YEAR-ON-YEAR.” director of the event, commented: “We’re ready for a unique chapter in our history with an ambition as great as anything we’ve done, period. It’s the esports version of the WSOP and it’s going to be huge.”

Despite clear strides made in online poker’s credibility in the US, the question remains as to how long this popularity will last when lockdowns ease and sports return. For a number of reasons, it will be difficult for the vertical’s growth to maintain the pace experienced in the past few months. The economical situation in the US may well become worse as a result of the pandemic, and rising unemployment could create a decrease in spending levels. Then, of course, there’s the inevitable reality that the return of sports will divert some interest away from online poker – particularly in newly regulated states in which sports betting is the new shiny toy.

In its Q1 trading update, even The Stars Group seemed relatively pessimistic about the longevity of the vertical’s success.

The operator admitted that the return of sporting events earlier than anticipated could benefit sports betting revenues but “could negatively impact the current increased activity across its online poker and casino products.”

The unprecedented nature of online poker’s comeback during the COVID-19 pandemic seems befitting of an unclear era. The period has seen some operators experience up to a 300% increase in revenue, but that growth has also recently levelled off. Regardless of whether we continue to see the same levels of poker activity, it seems that online poker is beginning to find its feet again in the US market. All it needs now is the stamina to hold its ground.

GAMINGAMERICA 23

ARTIFICIAL INTELLIGENCE

GAMING THE SYSTEM Andrew Fenton, SVP of sales for Silent Eight, a Singapore-based RegTech, discusses how one growing area – AI – can help address another growing concern – AML. If you’re trying to get from Point A to Point B without getting caught by the authorities, you’ll likely head for the back roads where there are fewer police than on the highway. For the same reason, an increasing volume of illicit financial flows – money laundering, terrorist financing and sanctions evasion – has been moving from the highways of the traditional financial system to the back roads of the casinos and gaming industry.

Casinos and gaming are generally grouped together as a sector of anti-money laundering and counter-terrorist financing (AML/CTF) activity, but they cover a range of businesses. In addition to physical casino facilities, online gambling is a growing sector of activity. Sports betting can be done at the venue, at a licensed betting shop, online or at casinos. Lastly, online video games using in-game currencies are a rising source of activity as criminals and terrorists seek to avoid the well-trodden path of financial institutions.

Certain challenges are common across the sector: the need for near real-time screening and transaction monitoring; the transfer of value into a non-traditional currency (chips or in-game 24 GAMINGAMERICA

virtual currencies); and the cross-border nature of clients and transactions. Taken together, these issues create challenges that are too complex to be addressed by manual processes.

CASINOS Casinos are the most mature sector of the gaming group, with well-established typologies and comparatively well-developed regulatory requirements. At its most basic, laundering money through a casino involves bringing in cash, purchasing chips or credit for play at the casino, and cashing in with a cheque from the casino, which can then be deposited into the financial system as clean money. A major advantage of using a casino is that large sums can be laundered at once, since it is not unusual for VIPs to spend hundreds of thousands of dollars.

Two prominent casino typologies are worth noting, both of which involve criminal organizations in China. In the Vancouver model, wealthy Chinese gamblers deposit funds in the local accounts of criminal organizations in China, and in return those organizations provide funds in Canada to the gamblers

ARTIFICIAL INTELLIGENCE

once they arrive in Vancouver. These funds are the proceeds of criminal activity in and around Vancouver and are held in local Canadian banks controlled by criminals. The gamblers use these funds to purchase chips in the Vancouver casinos, then cash them in and receive a cheque from the property. They deposit the cheque in the same (or different) criminally-controlled banks in Canada. The funds are then wired back to China through a series of shell corporations and then back to the underground banks in and around Vancouver. As the last step, the funds are typically used to buy local real estate.

The second typology involves travel junkets to casinos in Macau. To skirt Chinese currency restrictions, a Chinese businessman (or criminal) will pay a large sum of money in Chinese currency – for example, $100,000 worth of renminbi – to a junket operator. In return, he or she will receive airfare, hotel accommodation and a credit at the casino. After using some of the money gambling, the businessman cashes out in US dollars or another currency and has thus laundered the money without directly sending it through the financial system.

Detecting these and other typologies can be done from an analysis of transactions (e.g. detecting a player who buys chips, does little or no gambling, and then leaves with the proceeds cheque shortly after arriving), but these typologies also offer the opportunity for screening solutions. Because the screening must be done in near real time, modern technology is required since manual processes would take too long and would be prone to error.

In most jurisdictions today, casinos screen against lists of individuals known or suspected of criminal links and against politically exposed persons (PEPs) as rules in Canada and Macau have been tightened in the last few years with respect

to customer due diligence and enhanced due diligence (EDD) by casinos in their jurisdictions.

ONLINE GAMBLING AND BETTING Of course, casino games and sports betting occur online as well as in physical locations, and this makes the AML/CTF challenges even more daunting. As is the case with online banking, the onboarding and CDD processes are not done in person, and potential customers don’t want to wait days for the process to be completed and the account opened. The only way to have processes that are both robust and quick is to leverage artificial intelligence (AI) and other leading technologies. With these kinds of advancements, online casinos and betting sites can maintain continuously updated lists of sanctioned individuals and PEPs that can be continuously checked to accommodate the operation of the business across time zones. Since money deposits, transfers and withdrawals are done online, technology must also be deployed to check any third parties and to analyze transactions for indications of money laundering, terrorist financing or evasion of sanctions.

ONLINE GAMING Online gaming is a route for money laundering and terrorist financing that is overlooked by most people, but not by the criminals and terrorists. When you think of it, many games allow and encourage players to buy in-game currencies they can use to purchase items or premium content within the game.

Criminals can then sell these to other players for real currency or they can sometimes receive a refund for purchases they claim were a mistake. In either case, the funds initially paid into the game come out as money from a legitimate source, an essential element of the layering stage of the money laundering process.

Unlike casinos, you can’t move hundreds of thousands of dollars through a single transaction in a video game. Moving appreciable amounts of money requires multiple transactions, and this can be detected by AI. Additionally, AI can spot the patterns produced by the transactions and as player profiles deviate from expected levels of activity.

ADDRESSING THE CHALLENGE

ANDREW FENTON

The growth of money laundering, terrorist financing and the evasion of sanctions through casinos and gambling reflects the need for criminals to avoid the common and closely watched paths. Having said that, organizations from the Financial Action Task Force (FATF) to national regulators, and to individual businesses, are increasing their focus, expanding their requirements and raising their expectations with respect to how the sector is monitored. There remains a lot of catching up to do, but using the best technologies to create effective processes that are integrated, streamlined and smart can help these businesses reduce their exposure to criminals, and their risk to regulatory sanctions.

GAMINGAMERICA 25

ICE NORTH AMERICA DIGITAL

TRAINING CASINO EMPLOYEES FOR THE ‘NEW NORMAL’ Industry experts discussed the road back for casino employees post COVID-19 at ICE North America Digital, and how to create an enjoyable experience for guests while ensuring the safety of all parties involved.

MODERATOR DAVID NEWTON, partner, Hospitality Resources

SPEAKERS RICK FIELDS, consultant, former SVP casino operations, Mandalay Bay JULIA STEWART, founder and CEO, Alurx CHRIS SMITH, vice president of HR, Boyd Gaming DAVID CARROLL, SVP of HR, Seminole Hard Rock Support Services LLC

26 GAMINGAMERICA

DAVID NEWTON: We know that most properties are already open, so what has been your process in recalling employees and what have you learned from that process? How do you handle employees who don’t want to come back or are concerned?

CHRIS SMITH: Overall as a company, we wanted to be very sensitive to our team members returning to work. We understood that because we furloughed our team members in March, they were coming back to a very different environment. When they left, no one was wearing a mask and now we’re requiring all our team members to wear one. We wanted to be very sensitive to that so we over-emphasized all the safety protocols we put in place. A lot of our conversations revolved around whether it was safe to come back, and what we were doing to protect people.

We called people back based predominantly on seniority and their roles. We had cases where not everyone wanted to come back.

We had some team members who resigned or stepped out and we were sensitive to that. We offered different positions and roles where they would feel more safe, but at the end of the day some people

ICE NORTH AMERICA DIGITAL

“WE HAVE APPROACHED [RETRAINING] LIKE ANY OTHER EXPECTATION WE SET FOR OUR TEAM MEMBERS WHETHER IT BE SERVICE OR COMPLIANCE. WE WILL COACH AS MUCH AS WE CAN. IT’S JUST LIKE ANY OTHER STANDARD WE EMPLOY FROM A COMPLIANCE PERSPECTIVE. THIS CARRIES THE SAME WEIGHT.” just wanted to leave the organization. For the team members that we have called back, I think they have been very appreciative of the safety protocols we do have in place.

RICK FIELDS: What I have seen work really well in Las Vegas is the presence of senior leadership up front when they are welcoming the employees back saying “I am in this with you.” I have seen that make a huge difference with personal friends of mine who are now back to work in the new norm.

DN: Let’s talk about the retraining process. What has been your approach to the process of getting people all of this new information?

DAVID CARROLL: We’ve enlisted some pretty good training programmes and even used some medical professionals to guide us to make sure that we’re not only doing the right thing, but the rules keep changing as we go, so we need to stay abreast of those changes as they occur. Even though we’ve enlisted the help of outside professionals, sometimes they don’t always agree so it’s kind of a moving target. Generally speaking, what I’m finding most critical is how you respond when somebody in the workplace tests positive.

It’s really easy to get lazy on how you’re wearing the face coverings, especially when you’re going from front to back of house. Team members will let down their guard and that’s just as susceptible an environment as anywhere else. We keep our message fresh and frequent to ensure we don’t let our guard down at all.

RF: A couple of friends of mine on the Strip here are having issues in the back of house so they have leadership back there reminding people that the masks stay on. They have done a couple of funny videos with executives washing their hands and getting scolded for not doing it properly. This is to keep it front of mind and make it fun so it doesn’t seem like a punishment.

DN: In the retraining process, it’s one thing to train people to do it but then how rigorous is the enforcement of those rules? Are you taking any action if people aren’t following the rules?

CS: We have approached this like any other expectation we set for our team members whether it be service or compliance. We will coach as much as we can, but eventually a team member is not going to wear their mask properly or social distance and we may progress to discipline. It’s just like any other standard we employ from a compliance perspective. This carries the same weight.

DC: The vast majority of people are trying to do the right thing and a minority will not get it so we have to do what we have to do.

Fortunately, there hasn’t been much of that and we have just had to give friendly reminders. A lot of the times it’s actually peer pressure, so that helps a little bit too.

DN: Any other thoughts on how to make people feel safe when they’re back at work?

JS: I would say there’s this notion of really effectively communicating

create a culture that suggests we’re all in this together. I can’t think of anything more important than regularly communicating and empowering people. I think that notion of retraining is part of it but the notion of why and the whole cultural part of it is absolutely critical.

what is different about the environment and how we are going about it. Then there’s also communicating how we notify our team members if someone in the team contracts coronavirus. It’s giving the message that we are doing everything we can to keep this environment a safe one for you as an employee.

We actually conducted a self assessment survey. Before you went on the floor or in the front or back of house, you had to take a self assessment survey to see how comfortable you were. That questionnaire helped us learn that about 20% of the workforce was uncomfortable to begin with. So we had to put additional strategies in place to address that.

CS: One thing that we’ve really wanted to emphasize is keeping

CS: We’re actually going to be launching a survey here in a couple

the message fresh. Like everyone else, once you’ve done two or three weeks of training, you start to tune out the message.

We've done a lot of things around face coverings and social distancing and washing your hands that have been fun and clever throughout our properties. We have intentionally changed the messaging so that people continue to pay attention.

of weeks to start getting our initial feedback, but we’ve done a lot of listening exercises with general managers. As a result, we’ve adjusted a lot of our training. When you design these things before you open, you don’t know what you don’t know yet. For us to be agile during this process has been beneficial because we have learned something new every day.

JULIA STEWART: I think retraining is critical and you have to

GAMINGAMERICA 27

G2E 2020

WHAT NEXT FOR G2E? In a Gaming America exclusive, Tim Poole speaks with G2E event director Korbi Carrison and American Gaming Association SVP for industry relations Allie Barth to discuss the cancellation of this year’s G2E, and remaining options to explore. and stability for our key stakeholders, we made the tough decision through a thoughtful process that this was the right thing to do this year.

In the absence of a physical G2E this year, what kind of virtual alternatives are you exploring?

AB: We’re still finalizing virtual plans. Obviously, we have

ALLIE BARTH

It was a huge decision to cancel G2E, but one that had to be made due to safety concerns amid the coronavirus pandemic. How much of a part did casino re-closures and recent spikes in positive COVID-19 cases have in the ultimate decision to cancel the event?

ALLIE BARTH: The ultimate decision in cancelling the event is really driven by the uncertainty of the first global pandemic of our lifetime. It was a process we’ve been undertaking for many months since the initial outbreak in Asia in January.

It’s no secret that all economies are suffering through this and the gaming industry is not unique or immune to the economic hardships the pandemic has created. The travel restrictions and quarantines, especially for a global audience that G2E typically has, were definitely factors.

And just continued unknowns about the impact of the virus – it changes every day. So to really provide certainty 28 GAMINGAMERICA

some clarity as show management on what the future will hold. We knew G2E 2020 wouldn’t be the same as years past, but we were contemplating a variety of options on what it could be. Having the certainty with the cancellation of in-person allows us to better dedicate our time to the virtual component. We’re honing in on exactly which technological platform we’re going to use, but we’ve long held an interest in making G2E a year-round program.

We’re really trying to differentiate G2E in terms of content and delivery from other industry trade shows – in 2020 and perhaps beyond. Just really different, high-quality content and speakers, and a really powerful platform to connect the industry; to connect businesses and to share best practices, which are essential now more than ever. This, I hope, will better unify the global brand of G2E Las Vegas. We’ve got a huge gaming market with G2E Asia, which has traditionally been held in Macau, and last year expanded to the Philippines with great receptivity. And we hope moving to virtual will allow for increased participation from the truly global gaming industry.

You couldn’t get a bigger cancellation than G2E in US gaming, and we’ve had big tribal gaming shows like NIGA cancelled this year as well. How long do you foresee the US trade show calendar remaining in this virtual form and without physical meetings?

KORBI CARRISON: That’s a difficult question to answer because none of us has been through a pandemic before. The virus clearly has been unpredictable and it’s hard to say. So what we can do, really, is look forward and reflect on our experiences. We can’t predict anything but we can plan.

In planning forward this entire time, as Allie mentioned,

G2E 2020

“TO REALLY PROVIDE CERTAINTY AND STABILITY FOR OUR KEY STAKEHOLDERS, WE MADE THE TOUGH DECISION THROUGH A THOUGHTFUL PROCESS THAT CANCELLING WAS THE RIGHT THING TO DO THIS YEAR” – ALLIE BARTH it’s been a long process of evaluating the safety and viability of G2E. But along the way, we knew we wanted to have a virtual component to G2E. Now, being fully focused on that virtual component like many other industries have, we’re taking that as an opportunity. Of course, we would love to be back face-to-face with everyone, but we need to take this opportunity and say ‘how can we continue to connect our industry in the near future?’ We’ve got some neat things we can do.

Certainly, we can engage with speakers worldwide, who maybe wouldn’t be able to come to Las Vegas in person for G2E, so we can truly expand our message globally.

Not every element of a face-to-face trade show translates equally to a virtual platform but we really want to take advantage of the ones that do, getting creative with the ones that may not translate over as well. For us, the important thing is really connecting people in the industry and helping business continue, as it’s been very difficult across the board for both the operators and the industry suppliers. So that’s a really high priority for us.

We’ve been in communication with our stakeholders all along. It’s been a challenging time for everyone, with business differences and not being fully functional, but the communication with our constituents – both the casino operators and the gaming suppliers – has been really critical.

Keeping them tuned in on what we’re thinking and bouncing ideas off of them constantly has been really helpful as we navigate the decision-making process.

We did a lot of planning with alternate routes we could take. Internally, we formed a health and safety task force, which helps us figure out what things really look like when we all get back together. We focused a lot on what the in-hall experience will look like and what happens even before you enter the hall, how you receive your badge and things like that.

Things are different everywhere we go now, not only for attendees coming in but the exhibitors that arrive in advance. It’s a pretty extensive process. Then, keeping people safe on-site, being able to wash hands, sanitize, wear masks. It’s really important to keep all this in mind and to communicate not only with the folks coming to your event but with the venue, and also with the contractors and vendors that help you put it all together.

Las Vegas Sands has been a really great partner with us, as have our other contractors. Early on, they’ve put health and safety standards in place and publicized that. I would say you can’t over-communicate when it comes to helping people understand what will keep them safe – that’s something you can’t understate.

What course of action would you advise other trade shows to take, particularly smaller gatherings that wouldn't be as big as G2E and wouldn’t have as many attendees?

KC: Well, we all face the same challenges when planning live events. Certainly, we have learned a lot. We can speak from our experience and maybe call out a few things to others. First and foremost, you need to be in tune with the public health officials who are knowledgeable on what’s happening with state, local and federal regulations, as well as things that happen daily with learnings about the virus.

They are the experts and can best advise on that. But one other thing I would certainly underscore is communication.

KORBI CARRISON

GAMINGAMERICA 29

GGA LAS VEGAS

Lead Partner

GLOBAL GAMING AWARDS LAS VEGAS SHORTLIST DECIDED We can reveal the latest updates from the Global Gaming Awards Las Vegas 2020, with category sponsors and nominees confirmed.

The final Shortlist for the Global Gaming Awards Las Vegas 2020 has been decided, as the gaming industry’s finest firms battle it out across 12 categories at this year's virtual ceremony due to G2E’s cancellation.

During an unprecedented year for the sector, as the coronavirus pandemic continues to create an extremely challenging set of circumstances, gaming firms have been tested to the limit. As such, this year’s Awards ceremony will press ahead and reward the efforts of those who have worked tirelessly to weather the storm and thrive under such difficult conditions.

All shortlisted companies have been contacted and the full Shortlist magazine will be available in early September. In the meantime, if you want to celebrate your nominations, you can do so using the hashtag #GGA2020 and we’ll reshare your 30 GAMINGAMERICA

posts. The Global Gaming Awards Las Vegas are powered

by Gambling Insider and Gaming America, in association with G2E, and independently adjudicated by KPMG. The final nominees have been drawn up following a thorough self-nomination period, as well as suggestions from our esteemed Nomination Panel and the Gaming America editorial team. Receiving a nomination is an outstanding achievement in itself for any gaming company, acting as clear proof the organization is rated among the world’s very best. All nominated companies were asked to follow up with a supporting statement to the Judging Panel, outlining why they should be chosen to take home the award.

The Global Gaming Awards have developed an outstanding reputation as the fairest and most respected

GGA LAS VEGAS

Lead Partner

in the industry due to the objectivity and pedigree of the Judging Panel.

IGT and Aristocrat are among the category sponsors to have been unveiled for this year’s ceremony, while BetConstruct is the Lead Partner of the Awards. Leading land-based supplier Aristocrat, which will sponsor the Digital Industry Supplier of the Year category, generated operating revenue of $1.47bn for H1 of its financial year, and has a rich history of success at the Awards, winning twice at the 2019 ceremony.

Aristocrat collected the Land-based Industry Supplier of the Year title and won Slot of the Year with its Buffalo Diamond product. In 2018, Aristrocrat was also successful in two categories, once again triumphing in Slot of the Year with Game of Thrones, while winning Land-based Product of the Year with Lightning Link.

Gaming America editor in chief Julian Perry said: “We are delighted to welcome Aristocrat back to the Global Gaming Awards as category sponsors once more. Digital Industry Supplier is an extremely competitive category,

and having a serial winner in Aristocrat sponsoring adds to the award’s prestige.”

Meanwhile, leading international gaming supplier IGT is set to sponsor the Land-based Operator of the Year Award this year. A consistent nominee and previous winner at the Global Gaming Awards, IGT continues to supply gaming systems both online and in retail on a global scale.

“Even during a year where the global economy has been hit by the coronavirus pandemic, IGT remains an ever-present stalwart within the gaming sector,” added Perry. “We are honoured and delighted to welcome them back as category sponsors at this year’s Awards.”

Connective Games is sponsoring the Digital Operator of the Year category, Scientific Games is sponsoring Property of the Year and Continent 8 is sponsoring American Executive of the Year.

The Las Vegas Awards are now in their seventh year and the competition in each category has remained as fierce as ever, despite the impact of the COVID-19 pandemic.

THE 12 CATEGORIES FOR THIS YEAR'S AWARDS ARE: LAND-BASED OPERATOR OF THE YEAR

DIGITAL OPERATOR OF THE YEAR

Sponsored by

Sponsored by

CUSTOMER LOYALTY PROGRAM OF THE YEAR

PROPERTY OF THE YEAR

LAND-BASED PRODUCT OF THE YEAR

PRODUCT INNOVATION OF THE YEAR

DIGITAL PRODUCT OF THE YEAR

SLOT OF THE YEAR

LAND-BASED INDUSTRY SUPPLIER OF THE YEAR

RESPONSIBLE BUSINESS OF THE YEAR

DIGITAL INDUSTRY SUPPLIER OF THE YEAR

Sponsored by

AMERICAN EXECUTIVE OF THE YEAR

Sponsored by

Sponsored by

GAMINGAMERICA 31

MARKET ANALYSIS

INVESTORS CORNER: BUY OR SELL? Tim Poole speaks to Adam McLaren, VP and senior analyst at Moody’s Investor Service, about how investors should react to the US casino industry’s reopening.

At the height of the coronavirus pandemic in March, share prices in US gaming hit a low that would have been unthinkable in 2019. MGM Resorts International sat at $7.14 per share; Caesars Entertainment tanked at $3.52; Boyd Gaming also fell to below $8 and stocks across US gaming were at an equally depressed level. An unprecedented global situation had made an unprecedented impact in the stock market.

But with the US casino industry now reopening, and stocks slowly recovering, how exactly should investors react to the current situation? MGM is back at $18.21, though this is still almost half its January value. Eldorado Resorts, meanwhile, is at $42.01, up from $8.82 in March but down from $68.93 in February. Penn National has recovered well, currently at $32.14 at press time, with its five-year high in February only a few dollars above this figure at $37.81.

Clearly, there are mixed results so far, with some recoveries an instant success story and other stocks taking longer to 32 GAMINGAMERICA

adapt to the ‘new normal.’ So is it a good time to reinvest in the gaming sector or should traders stay away? To gauge how gaming firms will fare in the short to medium term, Gaming America spoke with Adam McLaren, VP and senior analyst at Moody’s Investor Service. Over the next 18 months or so, bond credit agency Moody’s is projecting a tough recovery for the gaming sector. And, initially, McLaren expects Las Vegas operators to see a “pretty significant” decline in the next couple of quarters.

“What we’ve tried to lay out is, clearly in the next 12 months, we think it’s still going to have results significantly below 2019, which is the baseline of a normalized year,” explains McLaren. “There will be a pretty significant decline in the next couple of quarters but the recovery is taking effect: half of US casinos are reopened but our view is at least, right now, there’s a lot of uncertainty over the health of a consumer, consideration to social distancing and unemployment.”

MARKET ANALYSIS

“THERE WILL BE A SIGNIFICANT DECLINE IN THE NEXT COUPLE OF QUARTERS BUT THE RECOVERY IS TAKING EFFECT. BUT OUR VIEW IS THERE’S STILL A LOT OF UNCERTAINTY.” Similarly, Fitch Ratings, another US credit ratings provider, expects the leisure sector to lose up to 60% in revenue this year. Its analysts expect 50% capacities at casinos to be sufficient for properties in the short term, but a reluctance to travel internationally could cost gambling hubs demand for some time to come, so US casinos may have to rely largely on domestic players.

In April, Moody’s was somewhat pessimistic about the road to recovery in Las Vegas, with McLaren agreeing travel levels will remain “suppressed.” He said: “We expect the gaming sector’s road to recovery will take several years, as it will need to overcome the drag from social distancing practices and high unemployment. With travel levels still suppressed across the country and the important convention business likely to be slow to ramp up, we anticipate it will take longer for Las Vegas operators to recover. We also expect leisure customers on a regional basis to come back first. As such, we continue to believe Las Vegas Strip operators’ revenue and profitability will lag behind regional casinos.”

McLaren, however, does hold more hope for 2021. With Moody’s projecting EBITDA levels falling 70% for 2020, he sees this number only going 30% below 2019 levels in 2021. “In 2021, we’re looking at potentially 30% below 2019 levels. That’s a pretty good indication providing there is no second wave of the virus,” he says. “It’s a significant improvement from an unprecedented operating environment. If companies are 30% down from 2019, you have to consider 2019 was a pretty strong year. So there will be recovery – it will just take a bit longer.”

In the short term, too, Moody’s does see pent-up demand boosting casinos. The early suggestions for the bond credit agency are that early activity back in casinos should be stronger than “a typical day” before the pandemic. There has certainly been plenty of buzz created by the Las Vegas Strip’s reopening, as well as properties like the Hard Rock Seminole in Florida and others across the US. News reporters in the US have been quick to capture and broadcast footage of lengthy lines filled with expectant customers.

McLaren says: “What we’re hearing is that those that open are experiencing stronger days than a typical day.

There are no hard numbers yet but it sounds like near-term demand could be fairly strong. What’s different now to other recessionary environments is people have been cooped up in their houses and people are looking to go out and do something for a change. Once they have that demand, we think people will be returning to casinos.”

Aiding this demand could also be stimulus money from the US Government, as the economy is helped back onto its feet following the coronavirus pandemic. The effects of this situation can be a double-edged sword, though, with bettors having to choose between gaming funds and their financial health. “Stimulus money could make its way onto the casino floor, at least initially,” McLaren explains. “But in a recessionary environment, unemployment is up. We think it’ll come down but there can be pull back as consumers start looking at their personal financial health and unemployment levels. Demand could be impacted as a result.”

A more clear-cut source of encouragement for investors comes from the debt market. Where the long-term health of casinos is involved, lenders have been all too keen to provide firms with the funding they require to survive the pandemic.

In regard to actual casino closures, there has only been a small amount, while firms such as Scientific Games, Eldorado, MGM, Caesars, Boyd and more have gained access to revolving credit facilities to help their balance sheets.

“The debt markets have been open for casinos,” McLaren says. “That just speaks to the market access some of them have had. That bodes well and shows investors casinos will be ramping up – and in a much better position than the last three months.”

ADAM MCLAREN

GAMINGAMERICA 33

ICE NORTH AMERICA DIGITAL

A TIMEFRAME FOR ECONOMIC RECOVERY

Industry experts speak at ICE North America Digital about the effects of the COVID-19 pandemic on the US gaming industry and how much time it might take for the market to recover.

MODERATOR JOHN O’REILLY, chairman and CEO, O’Reilly Gaming Group and O’Reilly Law Group

SPEAKERS GOVERNOR BOB MILLER, Nevada governor 1989-1999 JEFFREY SILVER, Gaming and Hospitality Practice Group, Dickinson Wright PLLC STEVE GALLAWAY, managing partner, Global Market Advisors JAMES MAIDA, president, Gaming Laboratories International

34 GAMINGAMERICA

ICE NORTH AMERICA DIGITAL

JOHN O'REILLY: Could you give an overview of the impact of COVID-19 on the gaming and hospitality sectors?

GOVERNOR BOB MILLER: Obviously the impact is severe. In Nevada

the shoulder of customers to remind them to wear their masks and not get too close to each other.

it has been particularly severe since it’s our primary industry. As we speak, Nevada legislature is going into special session. The outlook from the governors is that there is a $1.2bn shortfall for this year alone. There have been very significant cuts in governmental expenditure, which will be felt by virtually everybody. Various properties are still not even open and those that are will be dealing at anywhere from 20% to 50% capacity by mandate.

I think there’s the potential to create a situation from which we can’t recover, so we have to try to keep casinos open as much as possible while dealing with the safety of citizens. I think we’d be better off if we had a national policy, which we don’t. It’s been delegated to the states. In Florida, they even delegated it to the counties. If you look at the European Union they have national policy and they have decreased while we are spiking upwards.

JO: It appears as if the financial impact on the industry for some is near devastation. Are there any statistics you’ve seen in how much cash-on-hand the industry generally has?

STEVE GALLAWAY: Most of the public gaming companies have

JAMES MAIDA: Obviously the casinos are being severely impacted and they are the ones who purchase games and new concepts from the suppliers. The suppliers aren’t getting orders for new equipment, but they’re also losing their participation payments. When casinos are closed no one is playing their games so they’re not revenue sharing on those particular premium products. The trickle-down effect is that the suppliers and the test labs will recover only when the casinos get healthy again and start buying new equipment.

The one area which has not been affected is online gaming. The online gaming suppliers are continuing to submit new products where there's a digital channel, which can be explored. Lotteries are also now reopening and their ticket retailer channels are more open in more states. It’s a big wait-and-see game for the suppliers because they have to wait for the casinos to get healthy.

JEFFREY SILVER: We’re in a situation where we have to think about a couple of things. We have to think about disposable income because our customers need this to want to come to gamble. The experience at tribal gaming is that there’s been pent up demand, at least initially, and they’re seeing moderate levels of continuing visitation. But if people aren’t working nationwide, then there won’t be the kind of disposable income like we had in the last year.

Half of our visitors come from the West and 20% of them come from California. California is in a state of lockdown with citizens living on whatever savings they might have because they’re not working.

The number of flights to Nevada has also been impacted because the demand has been so low – just a couple of hundred a week. It’s increasing now but it was in the thousands previously. We’re not getting our feeder from far-away markets.

There’s also a demographic issue because there are people who are my age who don’t want to leave the house. We’re relying on a younger populace and they want one thing, to have fun. So security guards and gaming agents must be on

ensured they’re in a pretty good position to weather the storm. Most of them have at least nine months while many of them have 18 months to three years of reserves. They’ve been wisely cutting back expenses and spending as little as possible. Many are also making the wise decision to keep their employees. It’s a lot harder to retrain or re-hire. It’s preferable to keep your employees on. First, it’s good for the employees and second, it’s good for the business if you can do that. At some point, though, tough decisions do have to be made to lay off employees. You can’t keep people employed for a year and not at work – it’s just not realistic.

In terms of recovery, we know it’s going to be a long time particularly for Las Vegas. I think Vegas will probably be the last place to recover. It’s already an incredibly expensive place to go visit and on top of that, we already saw visitation being flat. On top of that we see people being hesitant to travel.

JO: Do you see any shifts in the industry as a result of the pandemic in terms of possible licensing or regulatory changes?

JS: The most exciting part of all of this is the fact that we as an industry are a group of very forward-looking innovators. Last week, the Nevada Gaming Commission adopted regulation that’s going to permit cashless wagering. Overall, I see that the regulatory environment is loosening up as such that they recognize the need to have an industry that’s more attuned to this next era we find ourselves in. I’m very happy with the response of the regulators when it comes to the willingness to accept and adopt new ideas.

GBM: I think the overview is that we’re in uncharted waters still.

Nothing is certain to get us through this dilemma as yet. We’re taking incremental steps. Most recently, there have been discussions surrounding masks and how much they can prevent spread of the virus and what kind of an environment we can have in our casinos.

It’s experimental currently and if we look across the world we can see greater success in certain regions. We have a disproportionate number of incidents of COVID-19 in the US and at least in my opinion a lot of that has to do with a lack of national policy.

JO: What do we see as the general timeline for recovery?

SG: It’s so dependent on states’ abilities to prevent COVID-19 cases from expanding too quickly and casinos requiring people to wear facemasks and enforcing social distancing. If people don’t have money then they’re not going to be able to gamble, so we need to make sure that we’re doing this responsibly so that the economy can recover and people will have the disposable income.

I do believe that regional America is already being shown to recover more quickly than destination markets like Las Vegas.

GAMINGAMERICA 35

REGULATORY ROUND-UP

OPENING THE MARKET A panel at SBC Digital Summit North America discussed the current state of affairs with regulation in the US, and what’s key to overcoming the challenges to pass sports betting in certain states.

MODERATOR ANTHONY CABOT, distinguished fellow of Gaming Law, UNLV

SPEAKERS JOSHUA PEARL, Penn National Gaming new market operations director REBECCA GIDEN, senior analyst, Eilers & Krejcik Gaming LLC

a result of COVID-19. Are any of you seeing that or is that just speculation?

SS: I think it’s speculation at this point as conversations are still occurring. But again I think this boils down to people thinking they need to meet in person and have these discussions and of course these meetings have slowed down or completely come to a halt.

I would say there are ongoing discussions going on behind the scenes in a lot of states that potentially might not have previously addressed sports betting, and it has accelerated some of those conversations behind the scenes.

REBECCA GIDEN: In the states where maybe it’s even more STACIE STERN, FanDuel government affairs director JOHN PAPPAS, Corridor Consulting founder and CEO

ANTHONY CABOT: What impact has the COVID-19 pandemic had on impending legislation?

STACIE STERN: Massachusetts is a state looking at potential revenue and legalizing activity but it’s maybe not top of mind for a lot of these legislators who are looking at its other revenue bills like healthcare or crime that have risen to the top of the priority list. States like North Carolina, Ohio and Massachusetts we thought were maybe shoo-ins for sports betting, I think you’re looking for a 2021 passage.

JOHN PAPPAS: There are a lot of unknowns to when legislators will be able to reconvene, and recent increases in COVID-19 cases where states may have been coming back for special sessions or planning to come back weren’t able to earlier in the year. It’s all up in the air right now. I think in a lot of states it’s really been a wait and see approach to what their path to legislating is, much less the political fights that will have to go on to get something like this done. We actually have to get them together to have those fights to begin with. That is still something that is very unknown.

AC: The media have reported a predicted acceleration of legalization as states begin to minimize their budget falls as 36 GAMINGAMERICA

politically difficult to get things done, we are seeing a couple put it to the voters. The states which have to change their constitutions to have it allowed anyways might be taking a first step instead of going all the way to enabling legislation. Places like Maryland and Louisiana have basically just done the referendums this year to see if the voters are willing to back this after showing interest.

Maybe there’s a little more political cover next year. If the voters approve it, there’s a more clear consensus that’s what they want and politicians will be able to use that cover to say their voters actually want this, so let’s get this done.

AC: It seems the public is much more accepting of sports wagering than in the past. Is that your experience as well?

SS: You see states now like Alabama and Wyoming, who has a task force seriously looking at sports betting as the centerpiece, and I don’t think this would’ve happened a few years ago. Attitudes are definitely shifting and sports betting has become a more acceptable form of activity.

AC: Legislation is key as it’s the foundation to how sports betting will roll out in a particular state. What are some of the big-ticket items in terms of what to do and not to do regarding legislation?

JOSHUA PEARL: With respect to legislation, any state that is legalizing is looking for new revenue. In order to push things out in an efficient manner, it’s key to be able to push out an end product that will convert those illegal wagering dollars to the legal market.

Any legislation should provide a framework for the regulatory body to roll things out in an efficient manner. It’s key to empower them with tools to be able to create an environment that is competitive

REGULATORY ROUND-UP

with the illegal markets to be able to shift those dollars over.

The biggest thing is don’t handcuff regulators, but empower them to work with operators to create the best environment for the end consumer.

Another thing to mention is the sports calendar is very seasonal, so it’s critical if legislation is passing in the spring, and if a date is handed down by legislation, not to restrict it from going live before the football season. Likewise, if something passes late in the year, not to miss out on a Super Bowl the following year or March Madness.

RG: From a legislative standpoint, you want to keep the market as open and flexible as possible to have the most successful market and maximized tax revenue for states. When we talk about an open market, the big points we want to make here absolutely include mobile betting. We see in New Jersey, Pennsylvania and Indiana that as they mature, these markets are quickly settling with about 85% to 90% of the total amount wagered in the states coming from mobile as opposed to retail sportsbooks. It’s clear that’s where sports betting is going and that mobile is where consumers want to be doing sports betting.

Including mobile and remote registration with mobile is important since some consumers in some states are several hours drive from their nearest casino, which is a huge barrier. This way they can participate easier in the activity.

In the few states that do have in-person registration, such as Nevada, they’re having to work around the pandemic by doing drive-through registration since the casinos were closed. Illinois has suspended their in-person registration. The states are seeing that in-person registration is really hampering consumers’ ability to just play in a legal market place.

States don’t need to reinvent the wheel. The benefit of coming in the second wave after the 2018 and 2019 states rolled out is that there’s a lot of good information out there, about what works and what doesn’t. There’s a lot of template language for both legislation and regulation that states should look to, to adapt to their own uses, rather than start from scratch.

AC: What’s key for legislation being passed in new states?

SS: To give a broader picture as someone who is on the ground in several state capitals and working on legislation, it’s ideal to go into a state with a model legislation, outlining what worked in other states. And while we look at this from our perspective and say what New Jersey or Colorado did, for example, there’s a real pride of authorship that comes from people who want to sponsor legislation in some of these states. It’s important to look at the whole environment, and people want to make it better. They want to find something they’re going to improve on from what New Jersey or Indiana has done, which is an important perspective.

At FanDuel, we work together with DraftKings on legislation.

What we try to do is talk with the regulator if they will have those conversations with us from the very beginning. That can help to shape the legislation, and if you can get some of the legislators to work with the regulator and vice versa, you can avoid some of those pitfalls that we see in some states.

The biggest misconceptions we’re coming across from state legislators are based on things around consumer protection.

It really concerns legislators that a mobile device can be safer than going in-person to register for an account, which is something we’ve tried to educate lawmakers about.

This method is one which really is safer and you really do know who the person is on the device through multiple types of verification.

Another opportunity that states have that concerns some legislators is college sports. There’s thinking that we need to protect the student athletes, which leads to legislators favoring the prohibiting of college sports, when in actuality there is already wagering going on in college sports, and off-shore apps that allow for college sports wagering.

Those athletes are already at risk, and the greatest way to protect them is through the regulated market. That’s when you know there are integrity issues, through the regulated market, but it seems to not resonate right away with legislators.

They feel they need to prohibit college sports to protect the athletes so it’s an uphill battle to convince them that is not the way to do it.

“I THINK IN A LOT OF STATES IT’S REALLY BEEN A WAIT AND SEE APPROACH TO WHAT THEIR PATH TO LEGISLATING IS, MUCH LESS THE POLITICAL FIGHTS THAT WILL HAVE TO GO ON TO GET SOMETHING LIKE THIS DONE. WE ACTUALLY HAVE TO GET THEM TOGETHER TO HAVE THOSE FIGHTS TO BEGIN WITH. THAT IS STILL SOMETHING THAT IS VERY UNKNOWN.” – JOHN PAPPAS

GAMINGAMERICA 37

PRODUCT REVIEW

GAME CHANGERS AGS’S VISIDEAL SHIELD

VISIDEAL ROULETTE

While the safety of casino guests and staff has never been more important, maintaining the community spirit of table-game play is also top-of-mind as players come back to the casino looking for entertainment and social interaction.

That’s why AGS teamed up with Tioli Gaming to exclusively offer VisiDeal Shield player dividers, elegantly designed to shield table-game players and staff from coughs, sneezes and airborne dropletswhile maintaining an unobstructed view and keeping players and the dealer connected.

AGS began actively selling them in May, and now has an installed base of more than 1,000 at casinos across North America. According to John Hemberger, AGS’ senior VP of table products, the VisiDeal solution is enabling casino operators to have more players on each table game, while giving players the confidence to stay and play longer.

“Many of our customers who have installed VisiDeal are finding that because they provide a physical barrier to prevent infection, players feel more confident and secure in sitting at 38 GAMINGAMERICA

a table game and enjoying the experience,” said Hemberger.

“In addition, some jurisdictions are requiring table players to wear masks unless the Plexiglas barriers are installed; masks can become hot and uncomfortable after long periods of wear.

While we certainly understand the short-term benefits these barriers provide, we also feel that VisiDeal can offer a long-term solution to keep players protected from numerous airborne illnesses that are always going to be present.”

VisiDeal Shields maintain social distance and physical separation using optically clear Plexiglas player dividers.

This enables casinos to minimize the risk of airborne exposure to COVID-19, flu or other infections while allowing eye contact and conversation to maintain the community spirit of table-game play.

Designed for two to six players on blackjack-style and poker derivative games, and for up to four players on roulette and craps games, two-piece, optically clear panel player dividers can be placed anywhere on the VisiDeal Shield.

Product review

Emmegierre In this difficult period due to Covid-19, we have tried to stay as close as possible to our customers around the world, supporting them with everything that could be needed for this recovery. With one eye to quality and style, always trying to give customizable and branded products, and another on the price, because in this period there is still a need to better manage resources, we have developed a whole line of protective shields for slots and tables.

V1 is our most suitable solution for slot floors.

Self-supporting, without the need for additional support structures, and produced with a UV-treated transparent polycarbonate screen, it allows functional and comfortable performance.

The panel can be customized with a logo and the structure with various colour finishes.

V2 is the evolution of V1, because it integrates all the specifications of V1 with the special “slide & hide” technology, to be able to extract the screen only when needed. We have tried to develop a functional but also comfortable product that doesn't hinder customers and operators.

V3 is our best seller solution, because it’s very functional for various solutions within the casino. It is certainly useful between one slot section and another but also for electronic roulette stations and live gaming tables.

V4 is our innovative solution we make for upright machines. It is fixed to the cabinet without having to puncture or damage them and without the aid of a support. It’s a product that manages to combine economy, ease of use and shipping, and efficiency.

V5 is a solution for the protection of gaming tables, black jack and baccarat, to allow customers to play live without worries. It’s an interlocking module solution that doesn’t require damaging the table nor much packing and shipping space.

We have also created a special line of polycarbonate masks for dealers, waiters and employees, ideal for those who have continuous contact with the public and need extra security, both for themselves and for the customers themselves. They come with an adjustable Velcro back attachment and CE certification.

V2 with "slide & hide" technology

GAMINGAMERICA 39

PRODUCT REVIEW

GOLDFINGER The importance of keeping surfaces safe is at the forefront of everyone’s mind right now. Goldfinger Inc.’s infrared touch screens allow industries to build safer products by removing the need for direct skin contact for interactive displays or touchscreens. Making end-users feel safe while interacting with touchscreen applications will be an important step for industries moving forward. Being

TOUCHSCREEN MONITOR

able to use Goldfinger monitors with various instruments for contact creates a safer experience for doing typical tasks that we previously took for granted.

“There is a lot of uncertainty right now for equipment manufacturers that typically require the use of skin-to-screen contact,” said Daniel Hartmann, president and CEO of Goldfinger Monitors. “Goldfinger monitors can be used with a gloved finger, a stylus or a pen and can give both manufacturers and end-users a reason to feel safe.”

Offering peace of mind, Goldfinger Inc. has been producing infrared touch screen displays for 10 years and has a track record for building monitors that last.

Aside from the benefits of not having to touch the monitors, they can easily be wiped down with any recommended cleaning solution for safety without worrying about damaging the touchscreen element.

Goldfinger touch screens are protected against scratches, fingerprints and other forms of cosmetic damage.

Goldfinger Inc. is the fastest growing monitor company in the United States and is renowned for its groundbreaking, innovative products with superior durability. They offer customizable touch screen monitors in an array of sizes, suitable to the amusement, gaming, kiosk, vending, digital signage, and retail and hospitality industries.

CASINOTRAC As a result of the COVID-19 pandemic, there’s been an emphasis on the importance of social distancing and keeping surfaces clean.

To meet this challenge head on, CasinoTrac has responded by developing an innovative solution to assist with the responsible re-opening of properties using our Dynamic Auto Social Distance (DASD) software and Clean & Disinfect (C&D) functionality.

Game availability and selection is a difficult challenge for casinos facing the prospect of shutting off half of their games to support social distancing. CasinoTrac’s DASD algorithm solves this by automatically placing adjacent games out of service when a machine is selected for play by a guest, and restoring them toservice when that player leaves. Casinos can continue to maintain a diversity of game offerings for their players by keeping all of their games in service and ensuring a player’s favorite slot machine is still available. This patent-pending feature has assisted casinos to safely re-open across Nevada, Oklahoma, Maryland, California, Washington, Iowa and the Caribbean.

Cleaning and disinfection of games between players is also an integral part of responsible re-opening procedures.

40 GAMINGAMERICA

CASINOTRAC’S C&D FUNCTIONALITY

With CasinoTrac’s added C&D functionality, staff is alerted to games that have been played. Recently played games are temporarily placed out of service until the cleaning crew finishes, inserting a special C&D card in the machines card reader to restore operations. The status of the games can be monitored on a C&D floor map, and statistics are available for management review.

PRODUCT REVIEW

SUZOHAPP Suzohapp’s Temperature-Control Access Gates from their new Personal Protection Line provide an upscale, automated temperature measurement experience for when customers enter your property. Mitigate customer displeasure with unsightly and invasive bottle-neck situations taking temperatures and make them into experiences worthy of your brand.

With a throughput of less than three seconds per entrant, these self-service gates allow for optimized entry while measuring temperatures and maintaining occupancy thresholds. Powered by a high-performance infrared thermometer and biometric system, they provide near-instant recognition processing with high accuracy. By automating

entry, properties can replace the expensive, time-consuming and manual process of having staff members check each customer by allowing both customers and employees to be kept at safe distances and avoiding potential confrontation by having an unbiased, automated system.

With multiple lanes of gates, entering your property can be smoother, safer and faster. Aesthetically designed for casinos with premium materials and finishes of tempered glass and stainless steel, these high-quality gates are ultra-reliable and can process thousands of entrants per day. The gates also have facial-recognition software that can integrate with various systems to provide a seamless experience for VIPs, loyalty programs and more.

TEMPERATURE-CONTROL ACCESS GATE

INCREDIBLE TECHNOLOGIES

Larry Hodgson, VP of engineering, Incredible Technologies Was the idea for the Universal Jumbo Edge (UJE) already under consideration before regulations dictated such sweeping changes to the casino experience, or was this thought of in the immediacy of circumstances and demand as the reality of COVID-19 took hold?

With the advent of COVID-19, it became immediately clear that we needed to take what we’ve learned as a company 42 GAMINGAMERICA

about the power of unique banking configurations and the improved game earnings that come with our Edge and extrapolate that to a product that can be used not only on our games, but across the entire industry. The 2020 debut Universal Jumbo Edge was born from our history of clever innovation and the need for greater social distancing across the entire casino.

PRODUCT REVIEW

Considering the short timescale of design, production and installation, do you feel you got the formula right the first time with the UJE or were there some changes that had to be implemented before they were fit for purpose?

The UJE is an elegant solution to an industry-wide problem.

Our development schedule allowed time to prototype and make any required changes. While minor adjustments may be needed as we get feedback from our customers, we are very confident that we are fit for purpose and then some.

Every focus is on maintaining a balance of retuning to business but maintaining safety precautions, but in the rush to make a viable product, some fast-track solutions might be considered.

Can you explain ITs commitment to sourcing sustainable materials and robust working environments for the safety of your employees and those across the supply chain?

What is ITs approach to traceability and transparency?

UNIVERSAL JUMBO EDGE LANDSCAPE

Can you explain what the UJE does, unique aspects of its design and how it still allows for a genuine gaming experience?

It’s designed to go in between slot machines on a casino floor and boasts a large, 55”, 4K display that can be positioned in either portrait or landscape mode. The display is used for custom casino-driven marketing and property videos. It also comes in two configurations, a stand-alone version (Cylinder) and a game stand top version (Base). The Base version mounts directly onto any existing standard game stand, and the Cylinder version features a beautiful curved design that can be used to fill virtually any gap between any type of gaming cabinet. In both cases, the display can be adjusted up, down, forward and backward to allow for a seamless and attractive installation.

When we heard the trend of disabling every other EGM on a casino floor to increase social distancing, we set out to provide a solution that would be more attractive, more informational and more entertaining than dormant EGMs. We want the casino experience to remain a positive one. We feel that the UJE helps provide safety without disturbing the patron’s experience; in fact, it will enhance the patron’s experience.

I can say that the UJE was designed without shortcuts in any fashion. We always strive to procure environmentally friendly components when possible for all our products. Additionally, our products are designed to be used for years and the UJE is no exception. Even post-crisis, the UJE will prove useful and remain on casino floors. An environmentally friendly product is a product that gets used for a long period of time.

Our commitment to the health and safety of our employees and to our vendors is a comprehensive one. IT ceased all on-site operations at the first stages of the pandemic. Additionally, we decided to not place parts orders with vendors who remained open against contrary guidance in COVID-19 hotspots. IT employs that same spirit in good times and bad; it’s part of our DNA. Our leadership looks out for its people first. The commitment to personnel has been underscored during the pandemic and we are all grateful that safety is prioritized this year and always.

The UJE is just part of IT's hardware line-up. Can you detail other products that help ensure a safe gaming environment?

Our Infinity V55 Edge debuted in 2018, long before “social distancing” was part of our daily vocabulary. The V55 Edge success is attributed to its pairing with powerful games, but also the unique bank shapes we created. Bank configurations like the Sawtooth, Pinwheel and Diamond allowed for greater player spacing, thus increasing earnings on banks nationwide. Without knowing it, we created one of our COVID-19 solutions years before it was critical.

UNIVERSAL JUMBO EDGE PORTRAIT

GAMINGAMERICA 43

OKLAHOMA

STATE OF PLAY Sheila Morago, executive director of the Oklahoma Indian Gaming Association (OIGA), sits with Carl Friedmann and calls for flexibility as tribal members confront legal and natural challenges in equal measure.

Given the current situation in Oklahoma, especially with a surge in coronavirus cases in June, what are your immediate priorities at OIGA and how are you able to manage such a constant and unpredictable landscape?

At OIGA, thankfully our priorities don’t waver, and they’re spelled out in our mission statement: The mission of the Oklahoma Indian Gaming Association is to promote the general welfare of the Oklahoma Indian Tribes through the development of sound policies and practices with respect to the conduct of gaming enterprises in Indian Country. As a trade association, the purpose of OIGA is to educate and disseminate information to the tribal, federal and state governments, and the general public on issues relating to tribal government gaming.

Now, the tactics and situations have certainly become more dynamic and focused over the past year, and between the ongoing compact dispute with Oklahoma’s governor and the extremely fluid situation created by COVID-19, I cannot think of a year that has required more flexibility.

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OIGA is fortunate to have very engaged leadership, who are able to meet via Zoom at a moment’s notice and work together to steady the ship as much as possible during these unprecedented times.

Is there a consensus among the OIGA membership of the best and safest way forward?

Generally speaking, yes. The safest way forward for every Tribal Nation and every gaming facility is to do everything possible to reduce the possibility of infection for staff and guests, to identify and isolate any cases which occur, and to continue to sanitize and execute temporary closures when needed. Each facility uses slightly different combinations of tactics to achieve these goals, based on their size, entertainment offerings and so forth. Our operators and regulators have been working together to share their experiences so we're all working in the same direction. Every Tribal Nation shares the same priority: safety and health.

OKLAHOMA

What do you and OIGA chairman Matthew Morgan see as the best workable relationship with Gov. Stitt’s office, and is there room for mutually beneficial compromises?

As we have said from the beginning, Tribal Nations are willing to come together with Gov. Stitt to work together for the good of Oklahoma. This will happen the moment he recognizes that the compacts auto renewed on Jan. 1, 2020. Unfortunately, his unwillingness to acknowledge that fact has caused us all to embark on an unnecessary journey through the legal system, which is ongoing.

What are the fundamental points of contention between OIGA and Gov. Stitt that have labelled this process as an impasse, and how can the legal weight of Oklahoma’s legislative leadership and AG Mike Hunter help enable positive solutions?

The plain language of the compact states that the compact “shall automatically renew Jan. 1, 2020.” The compacts did indeed become open for limited negotiation on both sides for a period of 180 days before their renewal date, which Gov. Stitt also chose to ignore. During the 180-day time period, either party (State of Oklahoma or the Tribes) “may request to renegotiate the terms of subsections A and E of Part 11” of the compact. If the other side doesn’t agree, the existing compact shall automatically renew for 15 more years.

That is to say that should the State suggest a term to which a Tribe disagree, or vice versa, the current compacts remain in place. And that is what happened, although Gov. Stitt’s actions, which now include executing new compacts between himself and a number of Oklahoma Tribal Nations add layers of legal complexity. It’s the position of OIGA, Oklahoma Attorney General Mike Hunter and Oklahoma’s legislative leadership that Gov. Stitt doesn’t have the legal ability to enter into such agreements.

These are the issues now working their way through the legal system, and once resolved,

OIGA looks forward to continuing to make Oklahoma a better place to live and work for all Oklahomans.

What contingency plans do you have in place for the 202 OIGA show given the erratic progress of containing the spread of COVID-19?

We are in near-daily discussions with OIGA leadership about issues such as this. As we are all experiencing, it’s a very hard time to make plans but we are doing our best to balance optimism and realism. It is, of course, our hope that by late July 2021 we will be in a much safer place than we are now.

Was there any consideration to salvage the 2020 show in a virtual format?

OIGA did consider attempting a virtual format, at least for the conference portion of our event. Our trade show, as you know, is a bit like a family reunion and attempting to recreate its energy and showcase the latest and greatest offerings from companies who come from all over the world to be with us was logistically impossible.

In the end, our decision was to cancel 2020 entirely and focus on 2021.

“BETWEEN THE ONGOING COMPACT DISPUTE WITH OKLAHOMA’S GOVERNOR AND THE EXTREMELY FLUID SITUATION CREATED

BY COVID-19, I CANNOT THINK OF A YEAR THAT HAS REQUIRED MORE FLEXIBILITY.”

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As a result of the pandemic, approximately 241 tribes stand to lose about $22.4bn in 2020, more than half their projected revenue this year, according to the National Indian Gaming Association.

Can you break down the validity of this statistic and speak about how OIGA’s proportion of that is impacting the industry in Oklahoma and its tribal citizens?

We don’t have specific numbers for Oklahoma yet, but impact is definitely being felt. Tribal Nations in Oklahoma are deeply committed to the well-being of their guests, citizens and fellow Oklahomans. All of the casinos in Oklahoma closed down before any other businesses in the state, and many were closed for more than 60 days. Revenues from gaming facilities fund tribal governments, so the trickle-down effect is being felt now. It’s especially difficult for some of the smaller tribes.

ONLINE VS LAND-BASED

PUTTING IT ON THE LINE Tim Poole explores the outdated notion that digital gaming hinders its land-based counterpart, urging a hastening of online adoption within the US market.

In the charming 2013 comedy The Internship – I’m a fan but critics rightly point out it’s ultimately a feature-length Google ad – Vince Vaughn’s character keeps saying “on the line” instead of “online.” The joke pokes fun at the older generation’s understanding of all things digital. Yet in US gaming, a reference of this kind often doesn’t feel out of place. I, for instance, am constantly reminded of when Rhode Island Governor Gina Raimondo discussed the state’s 2019 launch of sports betting without a mobile component. She spoke of mobile being the “future” and the state misjudging that factor, subsequently missing out on its revenue targets. Since when was something that’s been a dominant force for the past two decades considered the future?

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While there is already, to its credit, a burgeoning online sports betting market in several US states (and online gaming in New Jersey and Pennsylvania), prime examples such as the above highlight the very different feel of the US market to other countries. This isn’t just from politicians but within the industry itself, too, which is understandably a little protective of its rich history of land-based success.

An extreme form of this anti-online prejudice is the Coalition to Stop Internet Gambling, something I have always been fascinated by, which is designed to preserve the revenue of land-based casino operators against a rising tide of online gambling.

As was discussed at an industry panel earlier this summer, retail operators have often seen online as the "enemy."

ONLINE VS LAND-BASED

But how self-defeating is something like the Coalition to Stop Internet Gambling at a time like this? While the coronavirus pandemic has brought many industries to a halt, land-based casinos have been heavily impacted.

Online casino, however, is a product that has continued to entertain players unabated during the COVID-19 crisis.

In Europe, affiliates and operators have spoken of a silver lining to an overall decline in gambling revenue through increases in esports, virtuals and poker. But the biggest volumes of all have come from online casino. In New Jersey, meanwhile, that much was proven with the release of April’s financial report by the state's regulator.

With the main headline being a record fall in overall revenue in Atlantic City, online gaming figures more than doubled to a record $80m. Online poker, too, tripled to a record $5.2m, but the star of the show by far was online casino, which saw huge rises ranging from a 62% year-on-year increase for Tropicana to a 267% yearly rise for Ocean Casino.

This continued in May, when internet gaming win rose 124% year-on-year to $85.9m. Year-to-date internet gaming win for 2020 was up 88.3% to $337.8m through May. Key states like New York, meanwhile, remain without a mobile

component, deprived of that taxable revenue. Even during a pandemic, these numbers speak for themselves. It’s a clear message to all retail operators to put aside perceptions against online and, rather, utilize the digital options now available to them in abundance.

For states outside the very few that have already regulated online gaming, it should also serve as yet another wake-up call that there’s a strong source of growing revenue, ready to be offered at a time when state tax levels are more important than ever. Admittedly, there are considerations that cannot be ignored. Introducing a new way for customers to lose money during a time of crisis may not be publicly welcomed.

Governments undoubtedly have plenty of other priorities to address at this time, too, while responsible gambling concerns will naturally be higher due to what is the riskier nature of online casino.

But these facts still remain: 1. Sports betting recently launched in Colorado, showing states can move forward with new verticals even during a pandemic. In May, its first month of legal sports wagering, Colorado generated almost $1m in sports betting revenue from handle of $25.6mwhile casinos were closed. That’s a

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ONLINE VS LAND-BASED

completely new source of revenue, which would only increase with online casino added to it, and would be simply unattainable during land-based closures.

Convergent operators have also spoken of a lack of cannibalization, with data showing mobile betting would only add to revenue, rather than stop those who want to go to a physical casino.

2. Online gaming is a source of revenue on the up for both gaming companies and state governments, while land-based revenue had been on hiatus and is only just resuming. In New Jersey, for instance, while online flourishes, there is new uncertainty for retail properties with the postponed reopening of indoor dining due to a spike in coronavirus cases.

3. Online gaming and sports betting with illegal websites continues to thrive, meaning the verticals take place anyway, without regulated operators and state governments seeing the benefits.

4. Responsible gambling tools are more readily available online due to advanced software and technology, meaning AML and age verification can be far more effective in a digital environment. Pretending there aren't already huge, safely regulated online casino markets around the world is simply living in ignorance, so the increased risk of online casino can be counteracted here if managed properly.

Ultimately, it beggars belief there’s still industry opposition to online gaming in the US. There’s nothing wrong with remaining retail-strong, of course, but the necessity for an online arm of some kind is plain to see. While new online gaming markets might be ambitious at a time like this, at the very least those in existing markets should put their digital prejudices aside.

Currently, there are only two purely publicly traded online casino operators in the US. Golden Nugget Online Gaming (GNOG) recently became the second, going public at a valuation of approximately $745m. That is no small sum, nor is the valuation of DraftKings, a predominantly online firm that has soared in value since going public at

an approximate market capitalisation of $3.3bn earlier this year. DraftKings primarily offers daily fantasy sports and sports betting but hasn’t been slow to move into casino, virtuals and live casino.

In truth, a flurry of partnerships has been signed between online operators and US casinos, so at least some sections of the industry are moving in the right direction. Betsson and Gaming Innovation Group recently moved into Colorado, Kambi signed with Four Winds Casinos, DraftKings partnered with Bay Mills Resort & Casino, Playtech entered the New Jersey market, and there are plenty more. But there’s still a cloud over whether many land-based properties, regulators and state governments will remain entrenched in their anti-online stances once the impact of the pandemic is lessened.

Speaking in the July/August edition of Gambling Insider, Evolution Gaming CEO Martin Carlesund and Lightning Box Games CEO Peter Causley discussed a rapid oncoming digitalization that has only been accelerated by the pandemic. Carlesund believes 50 to 70% of the casino sector will end up online, while Causley thinks the next 12 months could see 10 years’ worth of convergence between the land-based and online sectors. The need for this is pressing, and even as we come out of the pandemic, casinos will not be at pre-COVID levels of revenue or EBITDA. Crucially, convergence means land-based and online working side by side, not as opponents.

But this is on a global scale. As we discussed in our debate earlier in this issue, it remains to be seen exactly how much the US market itself embraces digitalization.

Will companies, politicians and regulators welcome modernity or stick rigidly to the principles of the past?

Sports betting companies have embraced online a little more but regulators, lawmakers and casino operators are much less eager when it comes to online gaming.

Right now, the Coalition to Stop Internet Gambling may as well be the Coalition to Stop Gambling Altogether.

“EVEN DURING A PANDEMIC, THESE NUMBERS SPEAK FOR THEMSELVES. IT’S A CLEAR MESSAGE TO ALL RETAIL OPERATORS TO PUT ASIDE PERCEPTIONS AGAINST ONLINE AND, RATHER, UTILIZE THE DIGITAL OPTIONS NOW AVAILABLE TO THEM IN ABUNDANCE.”

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Facing a new industry challenge of social distancing the slot floor, Incredible Technologies has a simple solu�on. The Universal Jumbo Edge™ (UJE) is a slot bank spacing product designed to be used on any slot bank, born from IT’s DNA of merchandising innova�on – a proven method to increase player comfort and play.

The UJE is a flexible signage solution that spaces games with 55” 4K synchronized displays. It’s available in two configurations; the “Base UJE” which mounts to any exis�ng game stand/base and the “Cylinder UJE”, an all-in-one unit featuring a curved stand to create endless new bank configura�ons.

In this rapidly evolving world, IT remains commi�ed to helping you Reshape Your Floor.

CONTACT YOUR ACCOUNT MANAGER TO LEARN MORE

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