Gaming America Jul/Aug 2021 by Gambling Insider

GamingAmerica.com

Jul/Aug 2021

The tribal network With contributions from Navajo, Mashantucket Pequot, Mohegan and Seminole leaders, we assess progress made and momentum increasing as tribes nationwide work to their strengths and the common good

• NIGA AND OIGA SHOWS RETURN

• ROUNDTABLE: WIRE ACT'S NEXT ACT

• Q&A: NJ SENATOR BOB MENENDEZ

• LAS VEGAS MAYOR CAROLYN GOODMAN

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

EDITOR’S LETTER

STAFF WRITERS Henry Moore Henry.Moore@gamingamerica.com Ezra Amacher Ezra.Amacher@gamingamerica.com LEAD DESIGNER Brendan Morrell DESIGNERS Olesya Adamska, Laura Fogar DESIGN ASSISTANTS Radostina Mihaylova, Aleksandra Cakikj, Inna Shtereva MARKETING & EVENTS MANAGER Mariya Savova FINANCE & ADMINISTRATION ASSISTANT Dalia Ambrazaite IT MANAGER Tom Powling COMMERCIAL DIRECTOR Deepak Malkani Deepak.Malkani@gamblinginsider.com Tel: +44 (0)20 7729 6279 US BUSINESS DEVELOPMENT MANAGER Aaron Harvey Aaron.Harvey@playerspublishing.com Tel: +1 702 425 7818 ACCOUNT MANAGERS Michael Juqula Michael.Juqula@gamblinginsider.com Tel: +44 (0)20 3487 0498 William Aderele William.Aderele@gamblinginsider.com Tel: +44 (0)20 7739 2062 Clive Waite Clive.Waite@gamblinginsider.com Tel: +44 (0)20 7729 0643 Martin Dilleigh Martin.Dilleigh@gamblinginsider.com Tel: +44 (0) 203 435 5628 SENIOR ACCOUNT EXECUTIVE Sam Ford Samuel.Ford@GamblingInsider.com Tel: +44 (0) 207 739 9918 BUSINESS DEVELOPMENT MANAGER Warren Wilkinson warren.wilkinson@gamblinginsider.com CREDIT MANAGER Rachel Voit WITH THANKS TO: Ernest Stevens, Jr., Bob Menendez, Sheila Morago, Stephen Crystal, Brandon Walker, Jeff Millar, Mark Hichar, Tom Jingoli, Lynne Levin Kaufman, Jeff Silver, Johnny Ayers, Rodney Butler, Ray Pineault, Michael Tobin, Paul Goldean, Oliver Lovat, Joe Pappano, Yaniv Sherman, Daniel Kustelski

JULIAN PERRY, COO, Editor in Chief

CARL FRIEDMANN, Editor

It’s good to be back. We’re not totally out of the woods yet but we can certainly see daylight. And with summer in full swing, that’s an important indicator as we look to explore beyond our own back yards for the first time in a year. One place that’s grabbing a lot of attention, and for good reason, is Las Vegas. It’s a city that doesn't take to lying down, so it made sense that it was one of the first cities to declare 100% capacity, and people responded in kind. Sport, entertainment, expos and, of course, casinos and hotels rolled out the welcome mat, and the word on the street, and the Strip, is that the city is as busy as ever. “Las Vegas is built on hospitality and entertainment, and we are thrilled to welcome visitors back from around the country,” said Kate Wik, CMO for the LVCVA. “The excitement throughout the destination is palpable, and we know the pent-up demand to visit is real.” But it’s not like nothing ever happened. Safety measures are still in place but some things that were once seen as means to combat a pandemic are now seen as accelerated innovation. Take for instance how the newly opened and much anticipated Resorts World Las Vegas is celebrating not only its doors opening after years in the making, but the fact that everything on offer can be enjoyed cashless. Not free mind you, but ATMs and being in contact with more than you have to is now a thing of the past. Say what you want about face masks, but this is something we can all agree on. For more on Vegas going back to 100%, check out our feature starting on page 54. Of course, another step worth celebrating is the fact gaming shows are going to be face-to-face again. Considering this issue of Gaming America focuses on tribal gaming across the country, with our cover feature starting on page 28, we also get encouraging reports from OIGA and NIGA about their respective shows this summer. “It’s more important than ever for Indian country to unite as we continue rebuilding tribal businesses following the pandemic,” says Ernest Stevens, Jr., NIGA chairman. “For us, to build a secure future for our tribal citizens is most important, by building upon the success of tribal communities through gaming.” And in the Midwest, Sheila Morago, executive director at OIGA says, “As thankful as we are for technology, we are incredibly excited to be back in person, and look forward to seeing friends and colleagues who are more like family.” We share the sentiment.

CONTRIBUTING THIS ISSUE

Gaming America magazine ISSN 2632-766X Produced and published by Players Publishing Ltd All material is strictly copyrighted and all rights reserved. Reproduction without permission is forbidden. Every care is taken in compiling the contents of Gambling Insider but we assume no responsibility for the effects arising therefrom. The views expressed are not necessarily those of the publisher.

ERNEST STEVENS, JR.

Chairman, NIGA

BOB MENENDEZ

Senator, New Jersey

CHECK GAMINGAMERICA.COM FOR THE BEST IN BREAKING NEWS

CONTENTS  08 10 12

ALL THAT GLITTERS

HIGH WIRE ACT

RIGHT PLACE, RIGHT TIME

STILL ON THE TABLE

COMMITTED TO THE CAUSE

THE BEST DEFENSE

READY TO ROLL

IN THE ZONE

THE CASHLESS GAMING REVOLUTION

ID REQUIRED

PRODUCT REVIEWS: WHAT'S HOT

FROM THE TOP NIGA chairman Ernest Stevens, Jr., speaks about the perseverance of native communities to thrive, with gaming as a centerpiece for success.

STATE OF THE STATES Despite difficulties, states are examining ways to recoup losses from 2020, with some areas leading by example. We highlight a cross section of data.

IN GOOD HANDS In an exclusive with Gaming America, Las Vegas Mayor Carolyn Goodman speaks about encouraging trends that the city is not only gaining momentum to reach pre-pandemic levels, but surpass them.

WE MEET AGAIN With the return of in-person shows on the horizon, Sheila Morago, OIGA executive director, details the excitement along with measures in place to ensure they’re back for good.

TIME ON OUR SIDE Citing pivotal examples of the evolution of Las Vegas from its shadowy underworld reputation, Jeffrey Silver, Of Counsel at Dickinson Wright, explains how some key people and decisions put the city on a more fortuitous path.

WORKING TO STRENGTHS Stephen Crystal, CEO of SCCG Management, details the incomparable distinction between destination and igaming, yet explains the ways how they can learn from each other.

BEST OF THE BEST The Global Gaming Awards return to the Sands Expo Center to celebrate not only gaming triumphs over the last year, but the resilience of an industry determined to forge ahead.

BACK TO THE GARDEN STATE Gaming America catches up with US Senator Bob Menendez of New Jersey to discuss how the state is rebounding from the pandemic with soaring gaming revenues, and how gaming is an integral part of its recovery and overall identity.

COMMON CAUSE As tribal casinos return to full capacity this summer, we examine the states that have passed historic gaming compacts as a means to keep the doors open and expedite growth.

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New successful casino owners entering Las Vegas have been very few. But both successes and failures follow a similar pattern. Oliver Lovat explains a pathway to success in casino positioning, and the dangers of getting it wrong.

An illustrious panel discusses the latest ruling on the Wire Act and what importance and relevance it still has today.

Jeff Millar, Evolution’s commercial director for North America, gives some context about gaining a foothold in the US.

Brandon Walker, head of Amelco USA, says to get ready for sports to surge this summer, but reminds us not to leave casino behind.

Pace-O-Matic’s COO Paul Goldean details the company’s strategy to capitalize on the skill game industry.

As the pandemic accelerated a push to digital, hackers ramped up efforts as well. Continent 8 CEO Michael Tobin speaks about plans for continued expansion as the North American market blossoms.

Ezra Amacher explores how the return to full capacity has Las Vegas poised for a prolific summer, highlighted by the opening of Resorts World and the return of conventions and entertainment events.

Daniel Kustelski, CEO of Chalkline, says the football season is the biggest opportunity for sportsbook operators to acquire new players at scale.

Joe Pappano, CEO of digital payments provider Sightline Payments, explains how Covid-19 is transforming the casino and gaming industry.

Michael Bartlett explores how ID verification technology provider Socure got its start in the financial services world, and continues to expand its presence in gaming.

As the summer kicks into gear, Gaming America offers some relief with the coolest and most exciting products on the market right now.

FROM THE TOP

COMMON CAUSE Ernest Stevens, Jr., chairman of the National Indian Gaming Association, speaks to Gaming America about the perseverance of native communities to thrive, with gaming as a centerpiece for success. Since the passage of the Indian Gaming Regulatory Act (IGRA) in 1988, Indian gaming has helped transform the economies of more than 240 native communities, providing a vital engine to generate tribal government revenue dedicated to improve the health, education, public safety, housing and other essential community services for tribal citizens. Unlike commercial gaming, the tribal government gaming operations serve as the anchor for employment and economic development for natives and nearby communities. We're proud that Indian gaming is the largest segment of overall gaming in North America, bringing in an annual total of $39.1 billion. With 241 tribes in 29 states operating 488 gaming facilities, Indian gaming also ranks as the 11th largest private employer in the United States, behind companies such as Walmart, Amazon and Target. Plus, Indian gaming operations have supported 308,712 direct jobs and 766,944 direct and indirect jobs created through tribal government gaming, and in several states, tribes are the largest employer in the region. Tribal nations have accomplished these gains through responsible growth and unmatched gaming regulation, always in diligent defense of our tribal sovereignty. We work to be the best in all categories in our industry because our citizens receive the benefits. We are committed to engage with tribal operators and ensure that your business has a direct, positive impact on communities rather than individual stakeholders. Furthermore, revenues generated from any tribally-owned business or operation goes toward funding the livelihoods of tribal citizens and tribal governments. Our tribal gaming industry has been established as gaming experts and inevitably, we have become outstanding neighbors to many cities where tribal government gaming exists. Like everyone else, we too were hit hard by the pandemic, but tribes continue to be committed to working toward building back. And since the inception of the National Indian Gaming Association (NIGA), we have continued to be at the forefront in Washington, DC, committed to protecting and preserving the general welfare of tribes striving for self-sufficiency through gaming enterprises, and maintaining and protecting Indian sovereign governmental authority in Indian country. This includes engaging and educating any administration and Congress to ensure that Indian counrty is prioritized in all efforts, and to hold public 8 GAMINGAMERICA

ERNEST STEVENS, JR.

officials accountable for honoring tribal sovereignty, and trust responsibility to tribal government. Of course, a major highlight of our organization is our annual tradeshow and convention. This gathering is the largest of tribal leaders and casino executives in the country and it serves to deliver new insights and strategies for operators providing access to industry leaders and cutting-edge trends to help generate new revenues to support their local communities. It also presents attendees with current trends and information on federal legislative and administrative policy issues. This year, NIGA is thrilled to bring the gaming community together again face to face from July 19 to 22 at the new Caesars Forum convention center in Las Vegas. We're also excited that the event is together with The RES, the Reservation Economic Summit, creating the premier opportunity to reach tribal leaders and decision-makers. Our two great organizations have a long history of supporting one another. In this unique year, the joint venture helps coordinate our two shows in one city with safety for our attendees in mind. It’s more important than ever for Indian country to unite as we rebuild tribal businesses following the pandemic because continuing to build a secure future is most important, by building upon the success of tribal communities through gaming.

BETTING ACROSS THE US

THE STATE OF LEGAL SPORTS BETTING WA

In Nevada, the largest US commercial casino gaming market by revenue, gaming tax revenue fell 37.1% to

$609.5 million

in 2020, reflecting a decline not only in tax receipts derived from gaming operations, but also those applied to live entertainment events in casinos that were essentially all cancelled after the pandemic hit in March.

ID WY NV UT

New Mexico reported the sharpest decline in annual commercial casino gaming revenue in 2020 with a

78.8% drop. AZ

LIVE, LEGAL (21 STATES + DC) LEGAL - NOT YET OPERATIONAL (7 STATES) ACTIVE OR PRE-FILED LEGISLATION (8 STATES)

NO LEGISLATION IN 2021 (6 STATES) DEAD LEGISLATION IN 2021 (8 STATES)

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BETTING ACROSS THE US

In New Jersey, with legal online casino operations and the country’s largest internet gaming market, revenue doubled to a total of

Despite ongoing difficulties, states are examining ways to recoup losses from 2020, with certain areas leading by example.

$970.3

million last year.

ND MN

VT NH MA

MI PA

AR MS

KY TN

Legal landscape as of May 2021 (American Gaming Association) GAMINGAMERICA 11

MAYOR CAROLYN GOODMAN

IN GOOD HANDS In an exclusive interview with Gaming America, Las Vegas Mayor Carolyn Goodman speaks with Carl Friedmann about encouraging trends that the city is not only gaining momentum to reach pre-pandemic levels, but surpass them with notable new properties and increased investment. According to April statistics from the LVCVA, visitation to Las Vegas was up 15% from March, yet still down 27% from pre-Covid levels in April 2019. With 100% capacity now resumed, what projections can you share in terms of recovering remaining losses due to the pandemic? Las Vegas is well on its way to returning to pre-pandemic visitation levels. As more people are vaccinated and we see the country and the world reopen, there is an intense, growing interest in Las Vegas. There is an energy building that is palpable. People want to travel and have a good time after the pandemic and of course, Las Vegas is on their radar as a top destination. Total recovery for a year’s loss is out there to grab in time. 12 GAMINGAMERICA

Domestic tourism is rebounding but what are the prospects of international tourism numbers getting back to desired levels? While China, for example, only accounts for about 3.5% of total international visitation, Chinese tourists spend on average 30% more and stay longer. What strategy is in motion to attract these vital segments of customers? We are the world’s top destination be it for travel and fun, or for business meetings and conventions. We are known for the hospitality at our world-class resorts, our five-star dining, incredible boutique shopping and being entertained by the most popular and well-known entertainers. Until the international countries fully open their travel restrictions, time is the measurement.

MAYOR CAROLYN GOODMAN

On what scale are efforts being implemented to futureproof the city, as, for instance, contactless and cashless options are being introduced? Can you cite some other examples of how properties are elevating the guest experience while at the same time being mindful of increased safety precautions? Las Vegas has always proven to be a destination committed to maintaining the highest standards of good health practices, which is why we have flourished, expanded and excelled over the decades. We were not broken when the pandemic constraints were put upon the city and we remain committed to being at the forefront in all new ways to sustain our attractive appeal. Knowing that Las Vegas has always been a chameleon and on the cutting edge when it comes to trends and technology, we continue to move forward advancing new trends in health, safety and interactivity. Our International Innovation District downtown has become an incubator and testing grounds. Keeping in mind that Las Vegas has always made safety its priority, our focus remains on adapting to the changing world, its challenges, regulations and requests. We will continue to remain at the forefront of responding as needed and implementing in areas of safety and health.

How are ancillary businesses in Las Vegas, like restaurants, tourist attractions and shopping, faring now? Are employee levels, and opportunities for employment, returning since the lockdowns shuttered many businesses? The pandemic was extremely tough on our small businesses. Governmental aid and programs were a safety pin, but, sadly, not enough to handle the shutdown, which was the killer forcing far too many out of business. But Las Vegas is on a very strong rebound now, heading back toward the booming economy that we were enjoying in early 2020. We are delighted to see many small businesses open and inquiries about investment potential are enormous. Yes, as with the rest of the nation, we are experiencing a need for labor to be sure. We have good jobs available and a great quality of life in Las Vegas, and if your readers are looking for a change, they may consider restarting here.

I might take you up on that. So with momentum building and new properties opening like Resorts World and Circa, how is Las Vegas being viewed as an attractive destination to find reliable work and settle? How are you working with Governor Steve Sisolak on promoting this? Certainly with new properties like Resorts World and Circa (with the world’s biggest sportsbook), there is the need for massive numbers of employees. Each of us who lives here believes we are beyond fortunate to live in an exciting, multi-dimensional community like Las Vegas. All the amenities that people travel to for enjoyment, relaxation, business, sports and convention attendance are here to enjoy and experience to the fullest. Wonderful neighborhoods, world-class outdoor recreational

CAROLYN GOODMAN

opportunities and a truly diverse and welcoming community are part of who we are. All are welcome to be a meaningful part of pursuing their dreams in Las Vegas, a city where those dreams still come true.

If current trends are anything to go by—with new properties opening, and conventions, expos and entertainment returning, as well as 100% capacity and a general sense of increasing optimism—how does the rest of 2021 look regarding the city’s economy and overall vitality? Our future is as bright as the sun that shines here nearly 365 days a year. Las Vegas is a special place that can't be replicated anywhere else in the world. We've had tough times in the past, be it from a recession or most recently the pandemic, but never bet against Las Vegas. We handle it all as a huge, diverse and welcoming family. It's been easy for us to adapt to change so we remain the world’s favorite travel destination and a beautiful, thriving community. Therefore, when your readers are ready to take a break, hold a meeting, enjoy nature or maybe even get a fresh start somewhere new, Las Vegas is ready and waiting. GAMINGAMERICA 13

OIGA

WE MEET AGAIN With the return of in-person shows on the horizon, Sheila Morago, executive director at the Oklahoma Indian Gaming Association (OIGA) details the excitement along with measures in place to ensure they’re back for good.

SHEILA MORAGO

As the world begins to get back to its new normal, OIGA, like many organizations, is thrilled to plan for our 2021 Conference and Trade Show, which will be held at Oklahoma City’s beautiful new Omni Hotel and OKC Convention Center from August 16 to 18. Our dates are a little bit later this year, a modification our leadership made months ago to allow plenty of time for as many attendees as possible to receive vaccinations. OIGA is dedicated first and foremost to the wellbeing, safety and prosperity of our members, vendors and attendees. While hosting a July event was possible, it was our feeling that by moving into August, we’d be able to provide a much safer event for everyone. OIGA has diligently followed and implemented recommendations from the CDC and state authorities throughout the planning process. Modifications implemented include keeping all OIGA events within the host hotel and convention center, removing the morning welcome session with its theater-style seating and opting to present OIGA’s Annual Awards from the stage on the Trade Show floor rather than at our usual luncheon. If we could choose one word to sum up our past two years, that word would be flexibility. Our highest priority is always the safety of our leadership, volunteers, exhibitors, attendees and staff, and it was with heavy hearts and an abundance of caution that we cancelled our 2020 event. As it turned out, the world entered a period of lockdown around the same time, and we all know the rest of that story. Another word we’ve embodied is innovation. The ability to gather remotely via Zoom and other video technologies this past year and a half has enabled us to view geography as far less of an obstacle than we did before now. Conducting business 14 GAMINGAMERICA

remotely and face-to-face was made possible by new technology, accelerated by necessity. The energy and synergy we can create with colleagues from around the world now feels limitless. We can beam people in from anywhere, and this ability has been an unexpected blessing. OIGA has participated in conferences hosted around the world, including in the UK, Spain and South Africa. While we much prefer to gather in person, we can now also harness technology to create virtual or hybrid gatherings, which we never could have imagined two years ago. As thankful as we are for technology, we are incredibly excited to be back in person, and look forward to seeing friends and colleagues who are more like family. If you have never attended the OIGA Trade Show, you are in for a treat. It is a lively, fun, informative, high-energy assembly of some of the biggest names in the gaming and hospitality industries, and it will draw nearly 2,500 vendors, visitors and guest speakers to downtown Oklahoma City to celebrate and advance our industry. Oklahoma is home to the third largest gaming market in the United States with more than 80,000 electronic machines on the floors of our over 130 operations. The OIGA Conference and Trade Show has always been the largest regional show in the country and we’re looking forward to hitting that mark again. The 2021 host hotel is the beautiful new Omni Oklahoma City, across from the 30-acre Scissortail Park. Oklahoma City, with its central location, is drivable for many and we’ve kept registration fees affordable. We’ll get an early start Monday, August 16, with OIGA’s John Marley Golf Tournament, the proceeds from which have funded tens of thousands of dollars in scholarships for students since its inception. The tournament’s namesake was instrumental to the founding of OIGA and is an ardent advocate for education. The welcome reception and poker and blackjack tournaments will be held later that evening as well. Tuesday morning will be dedicated to conference sessions. The Trade Show floor will open earlier than usual that day for maximum networking, and instead of the formal luncheon, OIGA’s Annual Awards will be presented on the Trade Show floor stage, with a more casual meal. Then Wednesday will be filled with more sessions and fun. Since we couldn’t meet in 2020, make sure you don’t miss out this year.

DICKINSON WRIGHT

TIME ON OUR SIDE Citing pivotal examples of the evolution of Las Vegas from its shadowy underworld reputation, Jeffrey Silver, of counsel at Dickinson Wright, PLLC, explains how some key people and decisions put the city on a more fortuitous path.

There was a TV commercial from a few years ago using the slogan “What a difference a day makes” that depicted a rather rough-looking and casually dressed man who was applying for an important job the next day. He walked into a clothing store that advertised 24-hour tailoring and was measured for a new suit. The next day arrived and the man walked confidently into his interview suitably dressed and was immediately hired. The gaming industry in Nevada could say the same thing about itself. Maybe several years rather than overnight, but there have been some events that rapidly evolved, which have been transformational. The only thing I knew about the gaming industry before being appointed in 1975 by Governor Mike O’Callaghan to serve as the Las Vegas Board Member of the Nevada Gaming Control Board was that gaming had been legalized in 1931, presumably to help its sluggish economy recover from the Great Depression. But I also realized that Nevada faced a reputational 16 GAMINGAMERICA

dilemma because it was the only state with legalized gambling, and the only people who knew how to operate casinos were the ones who had been doing it illegally, many of whom were reputed to be connected with organized crime. Wise guys were entrenched. As the Governor explained to me on the day my appointment was announced, he wanted me to do my best to help “clean up the industry.” I was a prosecutor, so I knew tough times were ahead. The Federal government was never keen on upstart Nevada actually legalizing the very thing that the FBI had been so actively trying to eliminate. Nevada had no friends in Washington and certainly none in the DOJ. The FBI regularly rotated Las Vegas Bureau Chiefs, lest they be compromised or corrupted. Almost every casino executive, the pillars of our community, was being wire-tapped by the FBI and it was difficult to fend off various attempts by the feds to legislate Nevada’s gaming industry out of existence. In a few instances,

DICKINSON WRIGHT

classmates came to school tearfully reporting that their dads had been arrested. One major effort by Washington politicians to shine a light on the mob’s gaming roots was orchestrated by Senator Estes Kefauver, who had aspirations of running for President. This was 1951, about the time that television was becoming the new electronic marvel. The Senator decided that he and his Committee would delve into the activities of the Mafia and its negative impact on American society. These hearings were the first real news shows ever broadcast on those new black and white TV sets, giving the hearings much more drama than they probably deserved. The Senators subpoenaed reputed mobsters and asked pointed questions about the tentacles of organized crime in gambling, most particularly in bookmaking, sports wagering, and the “race wire,” where illegal bookmakers obtained odds and other information like morning lines for the race tracks around the country, and used Las Vegas legal books to layoff wagers. Even though the answers were, “I respectfully decline to answer the question on the grounds that it may tend to incriminate me,” the audience was transfixed because they had never seen real mobsters face-to-face. One of the more celebrated events of the Kefauver hearings took place in the courtroom of Federal Courthouse in Las Vegas, which is the current location for the National Museum of Organized Crime and Law Enforcement (Mob Museum). At the conclusion of the Senator Kefauver “road show,” there was a clamor among many politicians to do something to curb organized crime’s influence and involvement in the gaming industry. Of course, all the blame fell on hapless Nevada, which stood alone as the outlier in giving the mobsters legal sanctuary. They proposed a bill calling for a 10% excise tax on all gaming wagers placed in America, legal or illegal, which would have put Nevada’s legal casinos out of business, and destroy a fledgling tourist economy that had only recently begun to supplant mining and activities at Nevada’s Atomic Testing Range as the largest state employer. According to UNLV’s William S. Boyd Law School gaming law professor Greg Gemignani and tax attorney Brenda Roubidoux Taylor, “The average win retained by Nevada’s casinos from 2000-2018 was about 7.6% of all amounts wagered. A 10% tax would have exceeded all revenue retained by a Nevada casino from wagering and, thus, threatened to end the legal and regulated gaming industry.” Standing up for Nevada was its Senator, Patrick McCarran, a Democrat, who represented the state between 1933 and 1954. While elected from a state with only a few hundred thousand inhabitants, he had substantial seniority and was on many important Senate committees. He was also able to maneuver the excise tax discussion into excluding traditional casino games from the original bill and then, while stalling its passage

as long as he could, allowed a compromise bill, which imposed the dreaded 10% Federal Excise Tax only onto race and sports book operations. Throwing the race and sports books under the proverbial bus seemed a small enough sacrifice since their overall contribution to state tax revenue was small, and the casino operators had no stake in their profitability. Although the race and sports industry was decimated by the tax, after all, this type of wagering was nothing more than an amenity. More importantly, to those “do something” advocates, the tax could become a tool for the IRS to use against illegal bookmakers who refused to incriminate themselves by reporting the tax on their illegal wagers. So while 21 of 24 of the state’s stand-alone race and sports books (turf clubs) closed, McCarran became a hero for saving the casino industry and they named the Las Vegas airport after him. (He also served as a ranking member of the Senate’s Aviation Committee.) In 1974, the Federal Excise Tax on race and sports wagers was reduced to 2% and in 1983, it was reduced to .25% (with the illegal operators still required to pay the 2%). The reduction in 1974 was the catalyst that allowed Frank Rosenthal enough profitability margin to open the largest ever race and sports book at the Stardust Hotel. The success of this operation became the model for all future casino bricks-and-mortar sports wagering establishments that were to come (minus, of course, the allegations of skimming and illegal layoff bets). I began by writing about attitudes toward gaming and their changes, both gradual and immediate that occurred with the passage of time and upon the happening of certain events. For example, in 1977, New Jersey became the second state to offer legalized casino gambling, and for the first time in almost 50 GAMINGAMERICA 17

DICKINSON WRIGHT

years, Nevada finally had an ally in Congress. Other states looking to bolster revenues for special projects or to respond to recessionary cycles also gave gaming a hard look. At first, it was the riverboat states whose population, it was believed, perceived gambling to be an immoral enterprise. But in those states, gaming was legalized so this form of entertainment could be enjoyed, but only on a boat in a navigable waterway. State politicians steadfastly maintained the fiction that gambling itself never really occurred in their state, except for the occasional connection with the dock. However, the US Corps of Engineers had a different view and after a few “accidents,” they soon declared the gambling boats to be a hazard to navigation. Thus ended the three-hour cruise up the river. But rather than abandon the argument, the states found another means to retain their casinos and tax revenues by requiring the boats or barges to keep the casino portion floating with water pumped in from that qualifying river. Over time, other states began to legalize casino gambling for other reasons, either related to tourism, to offer opportunities for the Native American communities or simply for the revenue possibilities. Today, gambling in one form or another (including lotteries) is allowed in 48 states (except Utah and Hawaii). However, I mentioned there was at least one important event that changed the entire landscape for acceptance of gaming overnight. On May 14, 2018, the US Supreme Court in its Decision in Murphy v. NCAA declared unconstitutional the Professional and Amateur Sports Protection Act (PASPA) that had precluded every other state except Nevada and three other states with limited sports wagering (Oregon, Delaware and Montana) as the only ones authorized to conduct sports wagering. It was a 6-3 decision written by conservative Justice Sam Alito. At the time of the decision, the American Gaming Association (AGA), which supported the overturn of PASPA, estimated that there was over $150 billion a year gambled on sports in the US, of which 97% of the wagers were illegal. In the following three years, we have seen sports wagering spring forth almost to the point of making casino gaming their amenity, at least in terms of the promotional hype. Currently, the research department of the AGA reports that sports wagering is live and legal in 21 states and the District of Columbia. It is legal but awaiting operational regulations in nine states, and there is pre-filed legislation in four states awaiting action by state legislatures. The National Conference of State Legislatures issued a report in March 2021 and their survey revealed that New Jersey, aided by their quick approval of mobile sports wagering platforms, had the largest sports wagering market in calendar year 2020 with over $49.4 million in state tax revenues. During that same period, Pennsylvania brought in $38.7 million in tax revenue, again three-fourths of which were derived from mobile wagering devices. By comparison, during this same period, 18 GAMINGAMERICA

WILLIAM HILL'S SPORTSBOOK AT CAPITAL ONE ARENA

Nevada with its 88-year head start and 6.75% gaming tax (plus the .25 Federal Excise Tax) collected only $17.7 million in total sports wagering tax revenue. (I would note that Nevada will be considering possible regulation changes allowing for remote sign up for mobile wagering accounts, which seems to have enhanced the customer participation in other jurisdictions.) Because there are still Federal laws pertaining to the interstate transmission of wagering information, also known as the Wire Act, sports wagering must be confined to the borders of each individual state using geo-location and geo-fencing technologies. Tax rates for sports wagering vary widely from 5% to 20% and states such as Illinois and Pennsylvania imposed $10 million initial license fees, which were gladly paid by prospective operators. Nevada has always claimed that its lower tax rates permits the bettors to receive more favorable wagering odds than states requiring a higher tax, but the old saying of “we only make a little on each sale, but we make it up in volume,” was never more true than in this instance. The most noticeable change I have seen is the acceptance and the embracement of sports wagering by the leagues and the networks. As a former hotel executive who was not permitted to use game broadcasts on a large screen during Super Bowl parties for its customers, I found that restricting our use to nothing larger than a standard 60-inch television screen to be quite hypocritical when considering that at the same time NFL encouraged discussion of point spreads in their national telecasts. The NFL even denied permission for the Las Vegas Convention and Visitors Authority to purchase a commercial during the game. Now we have the NFL, MLB, NBA, NHL and their respective teams to provide official data and advertising support as major partners and endorsers of the various casinos and online sports operators. That acceptance of the gaming industry is a sea change from where I began.

SCCG MANAGEMENT

WORKING TO STRENGTHS Stephen Crystal, CEO and founder of Las Vegas-based SCCG Management, a consultancy specializing in sports betting, igaming, intellectual property protection and casino management among other sectors, details the incomparable distinction between destination and igaming, yet explains the ways they can learn from each other through human intervention. There is no comparison between the destination casino gaming experience and an igaming site -- two different use cases entirely. There is, however, a natural synergy between a local or regional casino and its partner online casino that a pure igaming play can't replicate. The land-based casino operator's first advantage is the scope of their reach within the whole customer experience. Also, distinct from the digital marketing experience, working within a physical market has the advantage of shared demographic and psychographic characteristics. This is not to say that digital marketing cannot differentiate its efforts to the zip code level -- they certainly can. However, it’s rarely seen because segmentation at lower levels, for pure igaming operations, realizes more rapidly diminishing returns. Regarding the visitors who show up at our front doors, much of the customer traffic related to igaming casinos and online 20 GAMINGAMERICA

sports betting operations is unintentional. It's driven by content sites and provided by affiliate marketing companies who pass that impulse-driven traffic to a website with the promise of a risk-free offer, or better. At this point, the customers themselves weren't planning on visiting that location. Thus, there was no minimum investment by the customer into participation, like getting in a car and going to their local casino entertainment venue. Last, once passed through to the online casino, the actions taken by the customer are expressly constrained by the user interface and the options they present. Now, it’s true that from the moment a customer first interacts with the online casino, their behaviors are tracked and recorded to a level that no land-based casino could conceive of replicating. However, when thinking about this level of customer behavior monitoring from getting meaningful and actionable insights,

SCCG MANAGEMENT

we often wonder about its real value. Do the railroad track-like constraints of online tracking methods allow us to learn meaningful customer preferences? Or instead, are you learning about customer behaviors when faced with the site's user interface design? It's one thing to perform A/B evaluations of copy or interface controls on a web page to increase time on the page incrementally or reduce abandonment rates. However, it's another thing entirely to learn actionable data points about the customer, driven by intent and preference. We believe that the real-world complexities associated with a land-based gaming operation allow operators to understand customers more meaningfully. There are no user interface enforced guardrails in the real world -- all options are available to the customer at all times. Additionally, the multidimensionality of the physical venue allows operators to understand their customers more deeply. To be clear, we believe that the community of large-scale igaming operators is among the world's preeminent experts in digital marketing analytics and user interface optimization. However, we are also convinced that the amenity and option-rich environment of the land-based operation permits an entirely different level of understanding. The pure digital marketing play watches masses of customers from 10,000 feet as they move like ants through tunnels of the user interface. It is sure to deliver reliable insights given time and volume, but its inherently virtual world constrains it. The land-based marketing team establishes a personal and real-world level of engagement with their guests. This customer understanding is multi-dimensional, formed through local advertising, email and SMS marketing, promotions, player development professionals, and event marketing teams and campaign offer redemption data. The relationship with the land-based gaming site allows for cross-promotion between itself and the casino. Rewards can come in the form of a unified players club wallet, with portable rewards between the casino and the igaming site. Also differentiated from the pure igaming site are all the land-based amenities that can be made part of the local casino's igaming benefits, including tier qualification, access to reserved parking areas and special onsite events. An additional benefit is the cost efficiency of a shared marketing services team that works together to cross-promote both entertainment opportunities and ensure that rewards and promotional reinvestment remain in line with customer value. There are very few examples of locals casino markets with exclusive access to their local population center in the United States. In these competitive locals markets, it is well established that players have a dominant favorite, most frequently with the closest casino to their home, but give a share of their gaming wallet to two or more other casinos. When you have a local casino with its partner igaming site, combined with a loyalty program whose marketing and promotions teams operate as

an integrated unit with the casino and igaming site, the perceived value of consolidating gaming activity within the loyalty program is magnified. Customers tempted to play with a competitor because they were closer to the competitor's casino at that moment could choose to instead consolidate rewards by playing on their igaming site. The same "cheating" behavior, triggered by having an unlucky day at the casino, could move their play online instead of driving to the distant competitor. The most successful locals casino marketing operations think of their customers as guests every day of the week, whether they're on the casino floor or not. When they're at the casino, they work to present the amenities, events and gaming experiences necessary to extend time on site. When they're not at the casino, they use those same tools to reduce the time between visits. The igaming site allows the business to extend the virtual walls of its operations, making it available to the customer at all times. This opportunity calls for an omnichannel marketing communications strategy with a higher frequency but a lighter touch. The omnichannel marketing strategy keeps the brand top of mind and opportunistic calls to action ready for the customer, when and where they can engage. Automation is essential to maintain an effective omnichannel marketing presence with customers who now have access to gaming options anytime and anywhere. Robust tools for campaign automation are now available through vendors with off-the-shelf solutions with little to no customization needed. In addition, cloud-based CRM tools can be optimized for the casino gaming industry by your team, with some professional services for hand-holding at the start. SMS, push notification and in-app messaging, favorites for marketing channels, can be managed through integration. These channels then take specific offers and promotions driven by your marketing team through CRM and marketing campaign automation tools. They can then extend the power of those messages with real-time content from third-party tools like live score data from sports data providers, and messaging automation from platforms that use AI to recommend timely and relevant content for the specific customer. This is the magic of microtargeted customer messaging, informed by pertinent real-time events. Are these considered advanced capabilities? For the gaming industry, yes. Perhaps even for marketing in general. Luckily, we are past the point where this kind of capability would require a significant one-time and recurring investment in custom solutions to make this happen. Today, these are off-the-shelf solutions. Land-based and igaming operations cannot be considered as inherently inferior or superior to one another as they are far too different. What we can say definitively, however, is that they are undeniably better together when supported by an integrated marketing team that sees and manages both businesses holistically. GAMINGAMERICA 21

GLOBAL GAMING AWARDS

BEST OF THE BEST The Global Gaming Awards return to the Sands Expo Center in Las Vegas to celebrate not only the gaming triumphs over the last year, but the collective resilience of an industry determined to forge ahead in light of a detached world due to the pandemic.

Self nominations have closed now, which means it’s all systems go until the next G2E Global Gaming Awards. The road is a lot smoother this year considering the upheaval of 2020 due to Covid-19 and all of us having to get our wires connected in order to deliver a virtual version of the show—a first of its kind. Considering the circumstances and our urgent crash course in tech, it went very smoothly, and when all was said (and sometimes repeated after the occasional cut out) and done, the lucky winners were able to celebrate a year of incredible achievement. We’re aiming to have an event that can keep pace with the 2019 edition, but also take cues from 2020 considering some concessions might still be in place in terms of social distancing and hygiene. But the most important thing is that we’ll be in person, in Las Vegas—one of the first cities in the country to declare 100% capacity back in May. And just a reminder that these are the most prestigious Awards in the gaming industry and as your hosts, we’re delighted to be able to see you all in person again. The Global Gaming Awards Las Vegas recognize and reward the gaming industry’s strongest performers across the previous 12 months, with a strong focus on the Americas. Over the years, these Awards have gained and strengthened the respect among the industry’s key players and decision makers, making this the must-attend event that kicks off G2E. 22 GAMINGAMERICA

The Awards are powered by Gambling Insider and Gaming America, in association with G2E, and BetConstruct will return as Lead Partner of the Awards for the fifth time. While we’re trying to restore what once was, we’re always evolving and trying to improve as we celebrate this 8th year of the Las Vegas Awards. One particular point of interest is that we’re splitting the Property of the year Award into two sections, one for North America and one for LATAM. This is an obvious indication that the category is growing to a point where more specified regions need to be acknowledged. And with the growth of operations in South America, it was time to reflect that in the Awards. “Despite the setbacks of the last year, it’s encouraging to see that not only are the Awards expanding, but that they serve as a sounding board for the overall trajectory of growth and investment in gaming around the world,” said Gambling Insider COO Julian Perry. “The fact that the Property category is now being split into two reflects this, and we envision this trend to continue.” Of course now there will be 13 categories rather than the usual 12. We look forward to welcoming you all to the Awards at the Sands Expo Center in Las Vegas on Monday, October 4. The Global Gaming Awards Las Vegas are powered by leading B2B-gaming publications Gambling Insider and Gaming America in association with the Global Gaming Expo (G2E) and are independently adjudicated by KPMG.

SENATOR MENENDEZ

BACK TO THE GARDEN STATE Gaming America reconnects with US Senator Bob Menendez of New Jersey to discuss how the state is rebounding from the pandemic with soaring gaming revenues, and how gaming is an integral part of its recovery and overall identity. 24 GAMINGAMERICA

SENATOR MENENDEZ

Data from UNLV’s Center for Gaming Research shows that sports betting in New Jersey is dramatically helping to recover lost revenue from land-based casino closures last year. Sportsbooks generated handle of $748m in April, 91% of which were bets placed online, making up $681.2m of the state’s total handle. How is online sports betting factored into the long-term economic stimulus plan for New Jersey following the damage brought on by the pandemic? State and local governments have been on the front lines of the pandemic, which have seen large, unanticipated costs and their tax revenues dry up due to reduced economic activity. The industries that were not as severely impacted by the pandemic, like online sports gambling, were important to stop the bottom from falling out. In addition, since many Atlantic City casinos operate online gaming sites, those revenue streams were instrumental in keeping their brick-and-mortar operations afloat while they endured pandemic-related closures and restrictions. I’m proud that the American Rescue Plan provided bold relief to state and local governments, small businesses and families to help them weather the economic impacts of Covid-19. Now, with online sports gambling continuing to grow, and casinos beginning to draw more visitors in person, I know our state’s economy will soon recover.

Atlantic City casinos returned to 100% on May 19, as outlined by Governor Phil Murphy. With all capacity limits lifted now, how will that benefit land-based gaming considering social distancing measures still need to be adhered to? As New Jersey reopens, I think we will see businesses across the state implement unique ways to ensure that people can safely partake in a variety of activities. Over 70% of New Jerseyans have received at least one dose of the vaccine. As more Americans get vaccinated and infection rates drop, more people will become comfortable traveling again and being

in large indoor settings, which bodes well for our casinos. And it all couldn’t come at a better time as summer heats up and the Jersey Shore, our boardwalks and pristine beaches once again become a prime destination for families, tourists and day-trippers. Atlantic City is well-positioned to bounce back.

Before the pandemic, it was estimated that over 39,000 jobs were supported by gaming in the state. With the return of greater capacity comes the greater need to hire people back to fulfil demand. Are casinos able to recruit employees in order to proportionally account for that? Atlantic City’s casinos never had any issues with hiring employees before the pandemic and I don’t expect that to change as our state reopens. What I do expect is for each casino to provide the opportunity for laid-off workers to be rehired to their former positions and salaries. There are plenty of well-trained New Jerseyans who are ready and willing to work as our casinos begin to return to normalcy. Furthermore, the partnership programs between the casinos and Stockton University and Atlantic Cape Community College continue to graduate well qualified individuals ready for hire.

Can you chart some of the history of gaming in New Jersey—from the Atlantic City heyday, to UIGEA, to PASPA being overturned to the rapid growth of online gaming—and how it’s been integral not only to New Jersey’s identity, but to its economic longevity? The Supreme Court’s decision in Christie v. National Collegiate Athletic Association was the culmination of a more than six-year protracted battle to deliver on what our residents overwhelmingly approved by referendum in 2011: the state-wide legalization of sports betting. The legalization of sports betting allowed states like New Jersey – already home to some of the most sophisticated regulations, oversight and monitoring technologies for gaming in the world – to bring the underground GAMINGAMERICA 25

SENATOR MENENDEZ

market out of the shadows and collect billions of dollars in much-needed revenue in the process. The decision was an economic win for the state, and a loss for criminal enterprises that hurt Americans for personal gain. Total gaming revenue in the state for April 2021 was $352.2 million, an increase of more than 326% from the $82.6 million in reported sports betting revenue in April 2020. The strong gaming industry in New Jersey enables the state to make investments in our public schools, transit and infrastructure that make it such a great state to live in.

How does the First Circuit ruling that the Wire Act only applies to sports betting affect New Jersey’s ability to grow beyond state lines? On January 20, 2021, the US Court of Appeals for the First Circuit held that the prohibition on the interstate betting under the Wire Act applies only to bets and wagers placed on sporting events, and not, as the Department of Justice argues, to all types of bets and wagers. The ruling maintains the status quo for sports betting in New Jersey. In other words, those who wish to bets on sports must be present in the state. The rise in popularity of online apps helps with the growth of sports betting for those in the state but not necessarily at a casino or racetrack. For example, residents from other states may come to New Jersey to enjoy the Shore, but then also use the apps to place bets. It’s been a boon for the entire state and the ripple effects are being felt beyond the gaming industry. According to recent reports, Fort Lee, just across the George

Washington Bridge from New York City and more than two hours from the Atlantic City boardwalk, was outpacing Las Vegas in daily bets. Think about that for a second. And when New Yorkers drive across the Hudson to use their online gaming apps, they stop in our local coffee shops and diners, they visit our small businesses, and they pay tolls to cross the bridge, which helps fund infrastructure improvements.

According the American Gaming Association’s latest data, gross gaming revenue in New Jersey for 2020 was $2.88 billion, the state tax impact was $1.19 billion and the overall economic impact was $6.45 billion. These are impressive numbers that are only trending upward. What convincing do you still need to do in order to get anti-gaming pressure groups to be more open minded to the overall benefits to the state that gaming provides? We are still only a few years into legalized sports betting in New Jersey. And while the numbers are impressive, I think it’s important for residents to see the other tangential benefits to sports gaming-adjacent revenue, such as money visiting gamers spend in bars and restaurants, and the jobs that flow from that. We also need to ensure that we provide enough resources to those experiencing gambling addiction.

On that subject, with an increase in gaming comes an increase in instances of problem gambling. What responsible gaming measures are being fortified in proportion to the growth of online gambling and sports betting? Individuals who experience a gambling addiction can find resources at the State of New Jersey Casino Control Commission website. The state also provides funding for education and treatment programs for people with a gambling problem. For example, there are more than 45 Gamblers Anonymous meetings in New Jersey every week. Individuals can also enrol themselves in New Jersey’s self-exclusion program.

What does the continued effort look like to ensure that the people of New Jersey, visitors and international suppliers and operators can function and gamble in a safely regulated and entertaining environment?

BOB MENENDEZ

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Since before the PAPSA decision, New Jersey has had a safely regulated environment. Before the pandemic, we witnessed the revitalization for Atlantic City. Now that the state is opening back up and people are eager to travel, I think you will see people coming to visit and taking advantage of the casinos and racetracks. Whether it’s a quick day trip to the racetrack or a family beach getaway to Atlantic City, New Jersey has something to offer everyone in the gaming space. And the best part of it is that the vast majority of our gaming visitors spend money elsewhere to support our hotels and restaurant industry, small businesses and so much more. Gaming has shown to be an economic driver for our state.

THE TRIBAL NETWORK

COMMON CAUSE As tribal casinos return to full capacity this summer, Ezra Amacher examines the states that have passed historic gaming compacts as a means to not only keep the doors open, but expedite growth of sports betting and igaming for years to come.

All it takes is a cursory glance around the United States to realize the vast diversity of enterprise at play in tribal gaming. Casinos remain the economic lifeline for hundreds of Native American tribes, but each has its own unique relationship with gaming. The Covid-19 pandemic displayed how far tribes were willing to test that relationship, as demonstrated through the story of Navajo Nation, a Southwestern tribe with the largest land mass in North America. The pandemic also showcased tribal ingenuity in ways not seen before. Mashantucket Pequot and Mohegan worked together to create an historic tribal-state compact that will bring sports betting and igaming to Connecticut later this year. Leaders from both tribes share what that deal means for the future of their respective communities. An equally historic agreement was reached by the Seminole Tribe and the state of Florida this spring. 28 GAMINGAMERICA

The return of NIGA, the reopening of tribal casinos and the recent momentum of tribal-state compacts gives Indian Country much to look forward to, but it’s also important to reflect on the impact on the pandemic. Brian Parrish, Interim CEO of Navajo Nation Gaming Enterprise, often finds himself in a reflective mindset these days. He recalls how last spring, he met with Navajo Nation leaders to discuss the emerging Covid-19 virus; he expected the disease to shut down the tribe’s four casinos for a couple weeks, perhaps a month. The veteran gaming executive had dealt with crisis management before, including the 2008-09 financial crisis, and figured this storm would blow over like the previous ones did. Then a week turned into a month, which turned into two months, and so on. The casinos that Parrish is responsible for stood empty through the summer, fall and winter of 2020. Two properties finally reopened this March, almost one year to

THE TRIBAL NETWORK

the day when Parrish had the initial Covid meeting with tribal leaders. The other two casinos are still waiting for permission to open their doors. “We’ve had zero revenue coming in for over a year,” he says. “We still have to have service and payroll and things like that. So what it’s done is it forced us to make some very challenging decisions on where to put the cash reserves that we do have to preserve the enterprise and to keep our work force intact.” Early on in the pandemic, Navajo leaders decided to close access of tribal land to only people living on tribal land. That meant the tribe’s two reopened casinos, both in northern New Mexico, could only serve customers who already live in Navajo country. Matters are complicated by the fact that clientele varies heavily per casino. The northern New Mexico casinos cater primarily to Navajo residents, while Twin Arrows outside Flagstaff, Arizona, relies on non-tribal members for around 70% of its business. Parrish hopes Twin Arrows can open in the coming months, but it will depend on when the tribe relaxes its Covid restrictions. “The Nation is now in the process of reviewing that law and trying to decide when it’s right to open the roadways and rescind that restriction on travel,” Parrish says. “That’s being discussed by leadership. Those actions have not been formally taken to lift that restriction but it is being contemplated right now. Once that’s done, then we can open our other two casinos and we can invite folks who are not residents of the Navajo Nation to come in and visit our properties.” Navajo has implemented some of the strictest and longest lasting pandemic measures of any gaming tribe, which, Parrish says, is a testament to the emphasis tribal leaders have put on protecting their own community. As the most populous tribe in the continent, the risks of some members contracting Covid and spreading it throughout Navajo’s 110 chapters were too high, even if it meant keeping casinos closed for an elongated time. “Many people don’t realize the Navajo Nation is 27,000 square miles,” Parrish says. “It’s about the size of West Virginia. The tribe is the largest federally recognized Native American nation in North America with over 401,000 members. So the big concern that all of us have shared is that if we opened our casinos too soon and then you have people who are not residents traveling on to the reservation, interacting with our staff, and we don’t have good protocols in place, then what could happen is our team members contract the virus and when they go home on weekends to their home communities and chapters, they just carry the virus right back with them all over the Navajo Nation.” There is a bright side, however. Almost all Navajo casino employees have been fully vaccinated, which should accelerate the process of reopening casinos to full capacity. And in Arizona, the state government just signed a revised compact that allows for Las Vegas-style casino gaming at tribal casinos, and legalizes retail and mobile sports betting. Navajo also expects to receive one of 10 offered sports betting

BRIAN PARRISH

licenses, which Parrish says will help keep Arizona customers in-state. “We believe Navajo has a tremendous amount to offer as a gaming partner within the state of Arizona and also New Mexico,” he says. “We’re one of the only tribes that has trust land in multiple states. We’re a good partner, we’ve had our gaming operations for 12 years, but we have great people and excellent service, and being able to have another amenity that we can use to compete against Laughlin and Las Vegas is very important for us.” Some 2,500 miles across the country, a different story has developed at Foxwoods Casino. The Mashantucket Pequot Tribal Nation had the property up and running by June 2020, with strict Covid measures in place. By mid-May, the Connecticut casino was able to lift all Covid restrictions. Because Foxwoods had slowly been opening the property for nearly a year, consumer confidence was well established by the time the casino returned to full capacity on May 21. “We didn’t see this incredible glut of new business,” says Mashantucket Pequot chairman Rodney Butler. “It’s been building over the last year and a half because of the safety precautions we had in place.” As Mashantucket Pequot was reopening Foxwoods, it was also engaged in renewed tribal-state compact conversations with Connecticut Governor Ned Lamont. The talks led to a tribal gaming expansion bill signed in May that brings sports betting and online casino gaming to Foxwoods and Mohegan Sun. Butler pushed for igaming expansion in Connecticut as early as a decade ago. The “bad memories” of unsuccessfully negotiating before have not faded, Butler admits. Nevertheless, the tribe was more than prepared for the inevitable arrival of sports betting, going so far as to sign a pre-emptive contract with DraftKings. The Boston-based sportsbook and daily fantasy sports provider won out in part GAMINGAMERICA 29

THE TRIBAL NETWORK

RODNEY BUTLER

because of its geographical proximity to Foxwoods. “Because of that brand’s strength and recognition in the market and now tending across the country, they have an existing database, similar to us and we compared those together and leveraged that in,” Butler says. “Being based in New England, a lot of DraftKings’ executive team grew up playing at Foxwoods when they were in college in Boston, so there’s some nostalgia there that they have. They understand and appreciate the Foxwoods brand, and who we are as a people. And so that’s where we really connected on the relationship level beyond just the business perspective. They respect the brand of Foxwoods and we’re looking forward to this many years of success with that partnership.” Plus, there’s a general sense of a better understanding of Indian country because of the appointment of Deb Haaland to be Secretary of the Interior, and her relationship with Indian country being Native herself. “From that perspective, they’re looking at it differently,” Butler adds. “With the last administration, we didn’t have any issues with our prior compact amendment that was highly publicized up until the very end when there was some political movement by the White House that made it difficult. A lot of it goes to the credit of the staff of the Interior being career staff. They’re phenomenal.” It was important for Mashantucket Pequot and Mohegan to launch sports betting as soon as possible too given the growing regional competition. Though the tribes have exclusivity over gaming in Connecticut, their casinos aren't easy to reach for many Connecticut customers. With the emergence of online gaming and sports betting, that’s not as big a concern. “Foxwoods and Mohegan, we have a duopoly,” Butler says. “It’s a great market, but as you’ve seen with competition in New York, Rhode Island and Massachusetts, there are facilities that 30 GAMINGAMERICA

are closer to the population base of Connecticut than Foxwoods and Mohegan. And so we’ve seen an impact on our statewide revenue. So the fact that we’re both located in the southeastern corner of the state, by going online opens up access to the rest of the state that normally, if you’re in the western part of the state, it can take you two to three hours to get to Foxwoods. Now you can simply go online at any point and enjoy your favorite game, and eventually come visit us when you have more time to do so.” Mohegan enters the sports betting and igaming space with plenty of experience from operating Resorts Casino Hotel in Atlantic City and Mohegan Sun Pocono. After years serving the most competitive sports betting and online gaming markets in the country, Mohegan will have more of an open playing field in its home state. Still, the lessons learned from operating in New Jersey and Pennsylvania should translate well to Connecticut, according to Ray Pineault, president and CEO of Mohegan Gaming & Entertainment. “Having been a part of the digital gaming growth for the past several years in other jurisdictions, we have gained significant understanding of what our guests want and are looking for when it comes to sports wagering and igaming opportunities,” Pineault says.“We plan to use the experience we have gained from those jurisdictions to bring a world-class sports wagering and digital gaming experience to our guests in Connecticut and anywhere else we may expand to in the future.” He adds: “Digital gaming has been something we have been working on for quite some time since the Supreme Court PASPA decision. Although there have been many starts and stops

MOHEGAN SUN HOTEL LOBBY

THE TRIBAL NETWORK

in getting legislation approved in Connecticut, we felt the momentum really shift with the government-to-government talks that resumed earlier this year. And although we are not prepared to announce a definitive timeline when these products will be available to our guests, we are confident that when we’re able to do so we will provide our guests with an unmatched experience.” Mohegan Sun reopened under a similar timeline as Foxwoods and also used the pandemic to grow its national gaming presence. In addition, the tribe recently undertook a hotel tower expansion at ilani Casino Resort in Washington State. More significantly, the tribe entered the Las Vegas market with the opening of Mohegan Sun Casino at Virgin Hotels located off the Strip. Pineault calls the opening a huge milestone for all of Indian Country in becoming the first-ever Native American casino in Las Vegas. “Of course, opening during a pandemic and business restrictions does not come without challenges,” says Pineault. “We had an extremely successful opening where we were able to introduce thousands of guests to our newest venture. We are very confident that the Las Vegas business will continue to grow and flourish as the city continues to recover from the pandemic, and convention and expo business builds and returns to the city.” Mohegan is one of two East Coast tribes to recently expand gaming operations to the West, the other being the Seminole Tribe of Florida, which opened a property in Sacramento in late 2019. Jim Allen, CEO of Seminole Gaming and chairman of Hard Rock International, recently told CNN that Hard Rock and Casino Sacramento is topping projections of where they thought it would be after eight years. “When we look at the regional gaming markets here in the United States, business is actually exceeding expectations,” Allen said. The Seminoles recently doubled down in their home state of Florida by agreeing to a revamped compact with the state, which will allow retail and mobile sports wagering beginning October 15. The compact also permits the tribe to offer craps and roulette at their seven Florida casinos and to open as many as three south Florida casinos on tribal land. Florida Governor Ron DeSantis signed accompanying legislation that gives the Seminoles gaming exclusivity for the next 30 years. In exchange,

the tribe will pay the state $2.5bn over the next five years and hundreds of millions more over the duration of the deal. The compact, which is still undergoing DOI review, would be a big boost for Seminole casinos. Just as significantly, it would move the tribe to the forefront of mobile sports betting. “If I take my hat off in my role in Hard Rock and Seminole gaming, and I look at it as an industry executive, I think clearly one has to focus on the digital side of the business when you look five, 10 years and beyond,” Allen said. The Seminoles’ agreement with the state of Florida is historic in more ways than one. Each tribal-state gaming expansion deal broadens the horizon for other tribes around the country, giving tribes confidence to demand more from their state government, according to Butler. “It gave us the opportunity to speak to our Governor and say, ‘Look, it’s happening in other states. It’s happening in other tribes,’” says Butler. “It’s positive and it gives us all a little bit more leverage and encouragement as we’re negotiating with the states that tribes reside in.”

“NAVAJO HAS IMPLEMENTED SOME OF THE STRICTEST AND LONGEST LASTING PANDEMIC MEASURES OF ANY GAMING TRIBE, WHICH, IS A TESTAMENT TO THE EMPHASIS TRIBAL LEADERS HAVE PUT ON PROTECTING THEIR OWN COMMUNITY.”

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RAY PINEAULT

DENSTONE GROUP

ALL THAT GLITTERS Historically, new casino owners entering the Las Vegas market have been very few, and the successful ones are significantly outnumbered by the failures. Even rebranding an existing casino within the same ownership group has been fraught with danger. On deeper study, both successes and failures follow a similar pattern. Oliver Lovat, CEO and MD of the Las Vegas-based Denstone Group, a consultancy focusing on customer-facing, asset-backed investments including casinos, offers an explanation and pathway to success in casino positioning, and the dangers of getting it wrong. In offering this thesis, it’s important to understand the context to my thinking. I am not from the gaming industry; I started developing residential real estate development over 20 years ago to commercial real estate finance and asset management – that is, programming shopping malls and retail areas. 34 GAMINGAMERICA

I collected a BA in social sciences, and MSc in real estate finance and an MBA with a focus on strategy. I am qualified as a finance and investment surveyor and was elevated to the designation of Fellow of The Royal Institution of Charted Surveyors. My MBA thesis was on the topic of strategic positioning of Las Vegas Casino Resorts and in 2015 I moved

DENSTONE GROUP

to Las Vegas to advise casino owners and those seeking market entry. I have held visiting faculty positions at The University College of Estate Management, lecturing on property performance measurement and asset management; and at Cass Business School (due to be renamed Bayes Business School) at City, University of London, on strategic marketing, which involves a field trip to study Las Vegas casinos. With over two decades of experience, I have collected an understanding in what works – and what doesn’t. The attraction to casinos was not about gambling. Rather, my journey started with understanding people, then real estate, then marketing and then applying these to this particular industry, as it is a combination of all of these that’s required to develop a strategy for a successful business.

CONGRATULATIONS…YOU BOUGHT A CASINO! You bought a casino and have joined an exclusive membership of casino owners. In Las Vegas casino transactions are rare and in recent years only a handful of new owners entered the market, predominantly Downtown, with established Strip operators consolidating. However, whether Covid related or a change in the business model, there seems to be a flurry of new market entrants heading to town. The big test to these new entrants is how to build a sustainable business in this hyper-competitive market. Recent and proposed new owners have been announced for The Rio, The Palms, The Sahara, The Venetian, The Tropicana, The Hard Rock (already rebranded as Virgin) and ongoing rumors of the Seminole Tribe seeking an entry for The Hard Rock brand. Plus, the opening of Resorts World sees Asian giants Genting coming to Nevada. There has not been such a level of transaction activity in Las Vegas since the 1990s. New entrants, with new capital, ideas and customers are a positive move for the industry, but the tough reality is that not all will be successful and a lot of money will be wasted in this journey. As a professional and commentator, it becomes clear almost immediately who the operators are that have given considerable thought to strategy – and those that have not – and it is painful to watch those errors take place in real time. Repeatedly. I am prepared to share my insights to the new market entrants and those that are considering investing in this most curious of asset class.

A CASINO BUYER’S GUIDE If you build it, they will come. For a while. Too often the second part is forgotten. Unless there is a clear customer strategy in place at the first point of strategic development, all else is irrelevant. Your casino will undoubtedly fail.

Among the best customer strategies are to find a segment where there is unmet demand, and drive better loyalty from that customer than the competition. Let us look at some of the most successful openings of recent years and this becomes obvious. Caesars Entertainment redeveloped its recently acquired Imperial Palace to The Quad, and now The Linq. There was a clear customer in mind. Caesars, with their data-driven approach to marketing, had observed a shifting in demographics of Las Vegas visitors to a younger customer. Understanding that many of these customers didn’t have the disposable income of their parents, yet sought to come to Las Vegas for an escape with like-minded people, targeted the renovations to this customer. The misstep naming the property as The Quad was to evoke a college campus, but The Linq, originally the name for the promenade built for Gen X and Y customers, gained such resonance with the target customer, it prompted a rename in short order. The Linq promenade, with selected brands and targeted offering, is an overwhelming success and the hotel has seen sustained rise in ADRs proving a solid return on investment. In the early 2000s both the Hard Rock and The Palms had proved that there was a demand, albeit off-Strip, for a younger, urban, sophisticated customer. When the Cosmopolitan opened, it took that customer and amplified the offering. There was a demand for a sophisticated, urban resort with a great nightclub, cutting edge live music and on-point food and beverage programming. The customers came, and over a 10-year period, non-gamers grew into gamers, driving revenues and leading the way for a new generation of visitors to Las Vegas Perhaps the leading operator of his generation, Derek Stevens has his hand in transforming three properties all in different ways. First was the Golden Gate, which was positioned for those who had nostalgia for Downtown Las Vegas. Second, The D, inspired by Michigander and mid-West customers, bringing proven and Detroit brand recognition to Las Vegas, such as American Coney Island Chili Dogs and Joe Vicari’s Andiamo Steakhouse. The gift shop even sells local Detroit sodas and candies. More recently with Circa, Stevens has understood the desire for authenticity, embracing the heritage of Downtown and realizing customer appreciation for sport, fusing these in Circa. Look at the most successful resorts and all have a clear customer in mind. Bellagio, Wynn, Caesars Palace, Circus Circus, Excalibur were all built for a clear customer segment. Look at the underperforming resorts. What customer group are they aimed to service? If you don’t have a clear vision for who your customers are, and try to meet their needs better than others, then why would anybody choose to spend their time at your property? GAMINGAMERICA 35

DENSTONE GROUP

COMPETITOR STRATEGY Concurrent with your customer strategy, any new market entrant must be aware of the competition. If you try to compete with an established operator that is in a similar position in the market, you have to do it better, or at least drive loyalty with that customer. In a highly competitive environment, where many aspects of business activity are highly replicable, there is a great prize for innovation. But by failing to understand and copy aspects that work, there are potential missed opportunities. As the Venetian innovated with a large convention-centric offering, today Las Vegas hosts over 22,000 meetings and conventions and holds around 14 million square feet of meetings and convention space, more than any other city in the world. Pre-pandemic, Las Vegas drew over seven million business travelers and is an established business destination. Likewise, Las Vegas has become the premier live entertainment destination in the world. With over 20 concert and sports venues, with capacity for over 200,000 seated customers. Any new resort will have to think seriously how to program their entertainment in alignment with their customers. Both eyes on the competition and understanding the market is of vital importance if your new shiny casino is able to compete.

DEVELOPING INTERNAL CAPABILITIES Further to the positions as outlined, for a successful casino opening, the resort needs to develop or acquire the key elements required for success. These may be hiring people, physically developing infrastructure or bringing in third parties as appropriate. The most important of these capabilities is developing a culture that aligns with the overall customer strategy, and the case studies in this are the resorts developed by Steve Wynn and his team, especially in large scale operating businesses. All aspects of training, hiring, presentation and leadership must reflect the customer positioning. Likewise, if entertainment is required, then the appropriate investment in people and placemaking is required. If slot players are the target, then a transactional loyalty platform is vital. whatever the target customer and business objectives are, there needs to be an internal capability to deliver. In his book Super Casino, Pete Earley recalls the early days of The Luxor, which was developed to compete with The Mirage. Earley reminisces of the concern to Luxor owners of a high-limit player on a lucky streak. Where Wynn had developed a culture to attract a portfolio of high rollers and an infrastructure to manage volatility, Luxor owners Bennett and Pennington successfully dominated the market of low stakes players in Excalibur and Circus Circus. The same goes with restaurants. Do not underestimate the value of a successful food and beverage program in gaining 36 GAMINGAMERICA

competitive advantage, aligning this key aspect to the target customer. Customers have to eat, so make sure they don’t leave your property to do so. I have lost count of great restaurants that have failed or underperformed because their offering was not aligned with their casino or hotel customers. If you don’t develop the internal capabilities to deliver on the promise, or outsource them accordingly, then your casino will fail.

NOW WHAT? Las Vegas prepares for new owners. Some will be successful bringing new ideas and customers to the market. However, we are still an industry that prizes operations above strategy. That is a mistake and in time will lead to business failure. Why? Because efficiencies don’t drive customers to your property. Bring the elements outlined together, add a strategic layer of how to do it and you will have a successful casino resort. Everything else is a tactical marketing tool, including the name, design and branding pursuant to meeting the strategic aims. Having read this column and absorbed its key points, you will be in a position to analyze both new and existing properties in the market. Watch carefully and be vigilent. You will see how successful properties capture customer loyalty because they are positioned to do so, and when some owners or operators screw it up, the reasons will now be obvious.

STEVE WYNN

ROUNDTABLE: WIRE ACT

THE WIRE ACT'S NEXT ACT With contributions from Konami Gaming, Greenberg Traurig LLP and Cooper Levenson, we examine the state of the Wire Act following the DoJ’s decision not to appeal the recent ruling. MARK HICHAR:

Regardless of the reach of the First Circuit’s decision, the Wire Act remains very much relevant to sports betting, as to which its applicability has never been in doubt. There have been many high-profile convictions and plea agreements involving the Wire Act since the US District Court’s 2019 decision. For example, in September 2020, 5Dimes agreed to forfeit more than $46.8 million in gambling proceeds as part of its settlement of a criminal investigation by federal authorities in Pennsylvania into 5Dimes’ sports betting operation in Costa Rica that allowed people in the US to place sports bets on its website. In September 2019, Raymond Duplantis was convicted of a Wire Act violation by a Texas federal court and in December 2020, sufficient evidence was found to exist for a jury to convict organized crime member Eugene Castelle of conspiracy to violate the Wire Act in connection with the operation of a large sports betting business. No doubt the Wire Act will continue to be used against unlicensed illegal sports betting businesses operating on an interstate basis. So it remains very relevant to sports betting, and continues to dictate many aspects of the design and operation of state-licensed online sports betting systems. Regarding online non-sports betting, however, the relevance of the Wire Act appears greatly diminished as a result of the First Circuit’s January 2021 decision, which is final and unappealable.

MARK HICHAR,

Shareholder, Greenberg Traurig, LLP

TOM JINGOLI

WHAT RELEVANCE DOES THE WIRE ACT STILL HAVE?

Along with the Illegal Gambling Business Act, the Travel Act, and the Unlawful Internet Gambling Enforcement Act, it helps support federal investigation and prosecution of illegal, unlicensed gambling operators, including offshore gambling rings.

LYNNE LEVIN KAUFMAN, ESQ.

LYNNE LEVIN KAUFMAN, ESQ., Cooper Levenson, Attorneys at Law

38 GAMINGAMERICA

TOM JINGOLI, EVP & COO, Konami Gaming, Inc.

In short, sports; the Wire Act still applies to sports betting. But instead of relevance we could ask, “What is the impact of the Wire Act with respect to legal sports wagering?” Because of the Wire Act, casinos, sport wagering operators and skins constantly have to prove that their proposed state-permitted sports wagering operations are not interstate and don’t violate the Wire Act. They must demonstrate that certain information being transmitted isn’t a wager, but information transmitted in assistance of a bet and thus legal under the Wire Act. They also have to show that certain information transmitted over state lines (information in connection with account creation, payment processing and geolocation) is not a bet or even information placed in assistance of a bet, and therefore transmission of that information doesn’t fall under the Wire Act. Regulations promulgated under UIGEA require a reasoned legal opinion, which demonstrates that proposed sports wagering operations, even if legal in the applicable state, will not involve restricted transactions. This legal opinion is required by payment processors, banks, credit card companies and others. It must not only show legality under state law but also legality under Federal law. One such Federal law is the Wire Act. So the Wire Act still has unfortunate relevance and an impact on state legalized sports wagering.

ROUNDTABLE: WIRE ACT

TOM JINGOLI

The global health situation helped expedite widespread shifts in consumer behavior preferences and technology adoption. If we do not provide consumers with safe, convenient and competitive options in areas like sport betting, igaming and digital payments, it only opens the door for unsafe illegal markets to fill the void. It’s far preferable that licensed operators have the regulatory framework to compete against the illegal market, with safe alternatives that offer revenue potential for state and tribal governments. Each state has been going through an exercise to determine the best way to bounce back from the pandemic specific to their particular situation and gaming has been included in those conversations.

WHAT ROLE HAS THE PANDEMIC PLAYED IN FORCING LAW MAKERS TO EXPLORE OR CONSIDER DIFFICULT OPTIONS TO HELP STIMULATE THE ECONOMY AND STATE BUDGETS?

MARK HICHAR:

The Covid-19 pandemic has demonstrated to state lotteries and also to state lawmakers that making their products available to consumers online can help mitigate losses due to stay-at-home restrictions resulting from national health emergencies. In Massachusetts, for example, where lottery products are not available online, weekly sales during the coronavirus peak were reported to be down 33% from the same week a year before. Massachusetts Treasurer Deborah Goldberg, who oversees the Lottery in Massachusetts, told lawmakers: “This pandemic has dramatically exposed the limitations and vulnerabilities of the lottery’s all-cash, in person business model.” Goldberg added that states with online lottery options instead saw a surge in demand. In short, the pandemic has demonstrated that when gaming products are available to consumers online, losses in state revenues due to consumers’ inability to access traditional paper-based products can be mitigated.

THE WIRE ACT: FAST FACTS • The Interstate Anti-Crime Acts were signed by President John Kennedy on September 13, 1961. • After becoming US Attorney General, Robert Kennedy urged Congress to pass legislation, including Senate Bill 1656—The Wire Act, to make interstate gambling illegal. His goal was to help the DoJ stop organized crime from trafficking.

LYNNE LEVIN KAUFMAN, ESQ.

The pandemic has certainly forced anti-gaming lawmakers to consider internet gaming and sports wagering. The revenue increases during the pandemic were startling, but more startling is the lack of a tremendous drop now. I recognize many lawmakers are reasonably concerned about problem gaming, as well as the availability of sports wagering and online gaming to minors. However, sports wagering and online gaming have been successful on a revenue basis, and in respect to regulatory compliance, particularly the ability to impose responsible gaming limits and other restrictions. The pandemic has also forced lawmakers to further explore cashless gaming options, which, again, I believe should not be a difficult option.

GAMINGAMERICA 39

ROUNDTABLE: WIRE ACT

MARK HICHAR:

On June 3, 2019, the US District Court for the District of New Hampshire held that section 1084(a) of the Wire Act applies only to sports betting. The Court granted declaratory relief applicable to the parties and also granted relief under the Administrative Procedure Act (APA). Referring to the Department of Justice’s 2018 opinion that the Wire Act applied to all forms of betting, the Court stated: “[The DoJ’s Office of Legal Counsel] has produced a capable, but mistaken, legal opinion that no additional process can cure.” Accordingly, the Court “set aside” the 2018 opinion, and by doing so made it void and of no effect. The DoJ appealed the District Court’s decision, and on January 20, 2021, the US Court of Appeals for the First Circuit affirmed, holding that “the Wire Act applies only to interstate wire communications related to sporting events or contests.” The Court of Appeals differed from the District Court only in its determination that declaratory relief was sufficient, and the Court of Appeals therefore vacated the District Court’s grant of relief under the APA. The DoJ had until June 21, 2021 to file a petition for writ of certiorari seeking review by the US Supreme Court. But the DoJ let that deadline pass without filing a writ or seeking an extension. So although the DoJ let stand the First Circuit’s decision, the DoJ’s 2018 opinion technically still represents their official position. By letter dated June 18, 2021, Attorneys General from 25 states and the District of Columbia wrote to Merrick Garland and Lisa Monaco, United States Attorney General and Deputy Attorney General, respectively, asking that the January 15, 2019 memorandum and the 2018 opinion be rescinded and that that the First Circuit’s interpretation of the Wire Act be endorsed. The letter noted that in July 2019, then-candidate Joe Biden said, if elected, he'd "reverse the White House opinion [on the Wire Act] that was then reversed and overruled by the [district] court.” “The court is correct,” Biden stated,“[t]hat should be the prevailing position.”

MARK HICHAR,

Shareholder, Greenberg Traurig, LLP

HOW IS THE APPLICATION OF THE WIRE ACT JUSTIFIED?

TOM JINGOLI

TOM JINGOLI, EVP & COO, Konami Gaming, Inc.

For decades, states and tribal governments have upheld rigorous licensing and regulatory requirements, protecting game integrity and consumer safety while stimulating unquestioned technology advancement, tax revenue, and job growth. Today the world looks to states like Nevada as the gaming epicenter influencing every legal and regulated gaming jurisdiction in the world. We’ve made strong gains in gaming entertainment, technology, and research, while operating within one of the country’s most highly regulated sectors. The application of the Wire Act should absolutely include prosecution of unlicensed, illegal gambling. We would not like to see it applied toward reducing the competitiveness of legal regulated operators and suppliers that operate within state, tribal and federal regulatory mandates.

LYNNE LEVIN KAUFMAN, ESQ.

LYNNE LEVIN KAUFMAN, ESQ., Cooper Levenson, Attorneys at Law

40 GAMINGAMERICA

I know it has been often discussed, but I think it is important to mention the policy behind the Wire Act. As an American political science major, I recall being fascinated about Robert Kennedy’s crusade against organized crime, and his belief that the major source of income for organized crime was illegal bookmaking, especially sports wagering. When my career forced me to address Wire Act issues, I learned it was one of many bills Kennedy tried to pass to stop organized crime. While all of his proposed bills didn’t pass, the legislative history is clear. The Wire Act was enacted as a means to stop illegal gambling, with the hope that by shutting down illegal gambling, particularly sports wagering, organized crime would lose its tremendous revenue source and power. Whether you argue that it only was meant to apply to sports wagering or if it was meant to apply to other forms of gambling, it was meant to apply to all gambling not legalized by the state. So while I think even the 2011 DoJ opinion lost its way when applying the Wire Act to legalized state activities, I believe the Wire Act can still be useful in the continuing problem and fight against illegal gambling. Whether it is the Wire Act or another Federal law, we need as many tools as possible to fight illegal sports wagering sites, yet I think that a repeal would be a good idea.

ROUNDTABLE: WIRE ACT

LYNNE LEVIN KAUFMAN, ESQ.

A few factors. The subject is a state authorized lottery. Second, if the decision went the other way, the negative financial ramifications to states, which have heavily invested in infrastructures to support igaming and have also relied on the state tax revenue, would be tremendous. States are now relying on this decision to make decisions and investments, which also unofficially cements the precedent. Additionally, the strongest opponent to internet wagering, Sheldon Adelson, passed away and it doesn’t appear he has a successor in that battle. Finally, the decision coincides with a change in the DoJ and a new President, who as Vice President expressed opposition to application of the Wire Act to legal gambling.

THE WIRE ACT HAS BEEN CONTESTED AND INTERPRETED MANY TIMES OVER THE YEARS. WHAT MAKES THE MOST RECENT OPINION BY THE FIRST CIRCUIT PIVOTAL?

MARK HICHAR:

The Supreme Court accepts approximately 100 to 150 of the more than 7,000 cases it is asked to review each year, or approximately 1.5 to 2%. Tony Cabot, Distinguished Fellow in Gaming Law at UNLV's William S. Boyd School of Law, stated before the deadline passed: “The Department of Justice has no motivation, either politically or on a policy basis, to continue to pursue this case.” So while the First Circuit’s decision is not binding on courts outside the First Circuit, the Wire Act likely will have little further relevance to non-sports gambling, or betting not determined by the outcome of one or more sports events or the performance of an athlete in one or more sports events. The DoJ was a direct party in the First Circuit case, and thus it had an opportunity to thoroughly present its views, and several states and state lotteries participated as amici curiae (friends of the court). Thus, the First Circuit’s decision likely will have considerable weight on any other court deciding the same issue in a different case.

THE WIRE ACT: FAST FACTS • The Wire Act was issued as a part of series of antiracketeering laws. It complements other federal bookmaking statutes, like the Travel Act, the Interstate Transportation of Wagering Paraphernalia Act, and the Illegal Gambling Business Act. • The Wire Act was intended to assist the states, territories and possessions of the US, as well as the District of Columbia, to enforce their respective laws on gambling and bookmaking, and to suppress organized gambling activities.

TOM JINGOLI

It affirms the 2011 opinion, and provides clarity to states, tribes, operators, suppliers and regulators that have worked to innovate the gaming sector with competitive gaming entertainment for today’s audiences. This clarity paves the way for different igaming, lottery and technology expansion opportunities without the threat of language from 60 years ago impeding the gaming industry’s overall progress.

GAMINGAMERICA 41

EVOLUTION

RIGHT PLACE, RIGHT TIME Jeff Millar, Evolution’s commercial director for North America, gives some context of the company gaining a foothold in the US, and the unique opportunities and potential that exist.

Can you give us some detail regarding the origins of your presence in the US and progress to date? Our entry into the US market was a carefully considered long-term project. Having closely monitored US market developments, we were the first live casino provider to gain preliminary waiver approval for New Jersey and launched our first US studio in Atlantic City in 2018. We constantly anticipate and prepare for new and re-regulating markets so that our licensees can win vital early market share, and in 2019 we gained a conditional interactive gaming manufacturer license from the Pennsylvania Gaming Control 42 GAMINGAMERICA

Board (PGCB). This made Evolution the first live casino provider to be licensed in Pennsylvania and we launched the studio in October last year. Additionally, in the coming weeks, Evolution will open a state-of-the-art live casino broadcast studio in Michigan. It will be our biggest studio in the US to date. Once completed, the new studio will host both live table games and titles from our fast-growing live game shows category. At the tail end of 2020, we acquired one of the world’s biggest online slots companies, NetEnt, and we are really excited to bring the worlds of slots and live casino together, especially to

EVOLUTION

players in the US. This acquisition mutually benefits both companies in terms of market penetration in the US, as NetEnt has a strong foothold in this market.

Can you describe Evolution's current strategic approach to the US and which particular markets or states show the most promise and why? The US is a key pillar in our overall strategy. It's our intention to have a major, day-one presence in all newly regulated US states going forward. So deciding to build our next studio in Michigan is the logical next step, and we can’t wait for this studio to be live. We always keep an eye on new legislation being introduced in each state. We try not to get too ahead of ourselves, though, until the state governor actually signs the bill into law. We are keeping an eye on states such as Connecticut, Illinois and Indiana while simultaneously looking at other US states considering online sports betting, such as New York. Going forward, we plan to be in every state that will have us. The growth has been fantastic, and we are layering in products slowly as we learn what works.  We’re excited to announce more deals and locations in the very near future as Evolution’s reputation in the US for live casino services has seen a host of agreements signed for both Pennsylvania, New Jersey and Michigan in the run up and after the studios launch. We are now working with leading land-based operators in all three states to extend their online offering including landmark agreements with Caesars Entertainment, Inc., Wynn Sports Interactive, William Hill US, FanDuel and BetMGM, as well as many additional licensed operators with the goal to launch before the end of 2021. In our latest interim report for January to March, our Group CEO Martin Carlesund discussed that all regions delivered good growth in the first quarter, with especially high growth rates in North America.

What is unique about the US in terms of consumer behaviours and trends? Consumer behavior is changing in the US. As more states open their doors to igaming, players are realizing that they can continue to interact with their favorite casino brands from the convenience of their smartphone or computer. We are seeing many players who are amazed that they can play against a real person, in real time via a live video feed over the Internet. Regulated online casino gaming is brand new to many Americans and introducing live casino gaming takes that experience to another level. In states such as New Jersey and Pennsylvania where players have the option to place bets on sports at a land-based casino or online, we have seen that the majority of sports betting comes from online, specifically through the use of smartphones. Additionally, these two states also have online casinos, and the majority of the online revenue comes from online casino games. 44 GAMINGAMERICA

JEFF MILLAR

Not to say that one is better than the other, but online sports and online casino wagering certainly complement each other. I think the growth in the US is going to be phenomenal for casino games, because sports betting is popping up everywhere and the demand to bring casino games in next will be strong.

Are you planning to build your M&A strategy in the US in light of your Big Time Gaming and NetEnt acquisitions? The acquisition of NetEnt significantly increased our joint market penetration and geographical footprint, making the Evolution Group the leading supplier in North America, something we are keen to remain. It also strengthened Evolution’s position in the US market and added slots as a second vertical to our offering, as well as resources in product development. NetEnt has grown its footprint significantly in the burgeoning US igaming market by entering Michigan on the day the Michigan Gaming Control Board (MGCB) launched online gaming and sports betting in the state. We’re delighted to report that multiple NetEnt licensees all began their operations in the Great Lakes State since day one. Similarly, by entering into an ongoing agreement to acquire Big Time Gaming, a thought leader in slots, we would also jointly benefit. With their groundbreaking Megaways game mechanic being incorporated into 200 games globally, this would greatly strengthen our strategic positioning. Our current strategy is also focused on our roadmap of high-profile US game launches for 2021. Among those titles are our live craps table and our RNG-based first-person craps, both of which are scheduled for launch in New Jersey, Pennsylvania and Michigan during the summer. Some of our first person games are already live in Michigan, with more to come.

AMELCO USA

STILL ON THE TABLE Brandon Walker, head of Amelco USA, says to get ready for sports to surge this summer, but reminds us not to leave casino behind. There’s no doubt that events over the last 12 months have accelerated a greater appetite for more states to legalise sports betting. When it comes to revenue, states across the nation are fast opening up to the windfall available in terms of boosting revenues, as well as providing that all-important entertainment factor, which is arguably more important than ever this summer. Using March Madness and the Super Bowl earlier this year as a platform for sentiment analysis, we know that betting lines are now becoming a normal part of the conversation for a sporting event. As well as the usual US sports, there’s also a host of new options available, with the Euros and golf, MMA, racing, NASCAR and LatAm soccer as well as the Olympics. Given this, I expect to see another surge in popularity from US players across online. There are plenty of regulators switching onto this, and at press time, the number of states now getting legalisation bills ready is becoming unprecedented. This summer will likely prove a watershed moment for many states, and it’s going to be far easier for operators to onboard players and take bets. Hand in hand with that will be a far more advanced and immersive offering as sportsbook and streaming companies merge into one, creating a hugely interactive betting experience that will deliver a Bloomberg style betting ecosystem that will really make players feel like they’re in the driving seat. Of course, that’s likely still a few months away (although FuboTV in particular is making some really exciting moves in this area). Looking at the here and now, the market is still so young in many respects and there’s so much growth to be had in the US. Still, less than half the states have legalised sports betting but as players grow in their confidence and market knowledge, we’ll see even more action. Given the commentary around the Super Bowl and March Madness, this will only grow as sports betting becomes more widespread across the nation, and everyone has their eyes on Florida, New York and California. From my ongoing travels, I can promise that when these states go live, you’ll no doubt see betting numbers absolutely skyrocket. However, there’s one elephant in the room when it comes to the US that still has plenty of space to grow – online casino, and in many ways, it’s still underserved. Despite land-based casinos opening up, I predict that the online space will still have a strong part to play. If there’s one thing we learned from the downtime of US sports last year is that player habits were markedly similar to Europe in choosing alternative verticals to substitute sport. This is 46 GAMINGAMERICA

BRANDON WALKER

particularly the case for poker and live casino, with US sports fans choosing the live action that resonated well with the gaming types they know and love. Given that acquisition, there’s plenty of scope for this retention factor to continue this summer’s sport, with so much traffic being driven to newly live operators’ sites. This will enable opportunity for the cross-sell to entice players over to a virtual gaming table, or slots if they’re not going to make it out to a land-based casino. However, unlike Europe, which saw a serious surge in casino, the difference is that the US is way behind in regulating this area. So far, New Jersey, Pennsylvania, Michigan and West Virginia are the only four major states to really cash in on the online casino experience. While the future of sportsbook across the US this summer is no doubt set for an exciting few months, states such as Colorado, Tennessee and Indiana are going to be left out in the cold from what is a fast-growing and very lucrative area that is proving to resonate very strongly with the US’s famous casino heritage. With the likes of NetEnt, Evolution, Pariplay and a whole host of other tier-one casino suppliers now ready to take the US by storm, the opportunity to make hay while the sun shines is too good to miss. There’s plenty of reasons to be positive right now when it comes to the sporting surge this summer. But I urge any operators who are hesitant to expand what they make use of via platforms (whether that’s us or any of our big-name competitors), to jump on board and capitalize on what will be a huge growth area, and a whole new upsell to customers.

PACE-O-MATIC

COMMITTED TO THE CAUSE Pace-O-Matic’s COO Paul Goldean details the company’s strategy to capitalize on the skill game industry. A few months ago, a grocery store in Pennsylvania carrying Pace-O-Matic-powered skill games started offering first-time health benefits to their employees. A social club that has been a fixture in the neighborhood for more than 40 years says without skill games, it wouldn’t have survived the pandemic. A restaurant owner has boosted pay for his staff. An operator can now juggle going to college and being a single mother by operating our skill games. These are just a few examples of how our focus on small business impacts not only these businesses, but also the people and communities they serve. It’s a core goal for Pace-O-Matic to provide small businesses an opportunity to be successful with a sustainable and legal revenue source. We firmly believe that to reach success as a skill games company, we need to focus on five areas that give our industry further legitimacy, create winning businesses and provide long-term and sustainable revenue streams. 1. Only operate where there's legal jurisdiction. In states where we operate, we know we're legal by law. This requires us to analyze state law and then engage and educate city, county and state law enforcement, regulators and legislators before we place a single terminal. In each market, our goal is to pass legislation that stabilizes the market, allows for competition, encourages enforcement and provides tax revenue to the state. 2. Create a compliance team. Skill game companies need to monitor themselves. Our compliance group is made up of former prosecutors and law enforcement officers and their primary purpose is to monitor our contractual structure and market. They notify authorities of illegal gaming operations and ensure our operators and locations follow the law and contractual requirements. Some of these include limiting locations to five terminals, and a restriction of our games in mini-casinos. Through our compliance team, we are better able to manage our markets, provide better service to our operators and locations, and create a positive impact in communities where we conduct business. 3. Provide contractual protections for operators and locations. It's paramount for us to create a partnership with the businesses we work with. Like that grocery store owner, our business partners know the benefits of operating our skill games but also want to know we have their backs if they're unfairly targeted by law enforcement. We give that security by contractually agreeing to defend them. Our business partners also expect to have 48 GAMINGAMERICA

PAUL GOLDEAN

consistent rules governing all business arrangements, and those rules enforced. Our model, through our contracts, keeps us and our partners engaged and accountable in the communities where we operate. 4. Focus on helping underserved and diverse businesses. This is a priority for us. We believe whole heartedly in the effort to gain access to untapped markets, potential and opportunity. Our program is simple: find and support operators to give opportunities to maximize potential in markets we haven't historically served. This allows us to access and assist a broader category of small businesses. Throughout our markets, we have seen success in diversifying our operator and location base. 5. Be a community partner. Pace-O-Matic founder and chairman Michael Pace,and his wife Karmin have instilled the importance of giving back. It’s one of the pillars of our business. We want to be an integral part of the communities we do business in, and believe in charitable giving to organizations that support the areas we serve such as local fire departments, police canine units, animal shelters, homeless facilities and food banks. The need for assistance caused by the pandemic led to our donations to organizations struggling with increased need. Across the nation, there are great opportunities ahead. We will continue to be a lifeline for small businesses, the very fabric of America, and essential to growth of all business in this country.

CONTINENT 8

THE BEST DEFENSE As the pandemic accelerated a push to digital, hackers have ramped up efforts as well. Here, Michael Bartlett speaks with Continent 8 co-founder and CEO Michael Tobin about plans for continued expansion as the North American market blossoms.

MICHAEL TOBIN

The pandemic-related shutdowns of 2020 forced millions to work from home, and many others to rely on the internet to order necessities ranging from food to toilet paper. So naturally, criminals took advantage whenever possible. Michael Tobin, co-founder and CEO of Continent 8 Technologies, the hosting, cloud and security services company with offices in Florida and Virginia, said in Q2 2020, as countries around the globe entered lockdown, that his company saw a 55% increase in cyber attacks compared to the same period in 2019. “When considering the continuous shift to digital, which was accelerated by the pandemic, it probably won’t surprise many to know that cyber attacks were significantly up year-on-year in 2020,” Tobin told Gaming America. “As a society, we have become increasingly reliant on remote interaction, causing global traffic to increase by 30% and, of course, creating new opportunities for cyber criminals.” A significant proportion of the attempts seen in 2020 and 2021 have been “old school” techniques such as distributed denial of service (DDoS) attacks. Tobin said Continent 8 is 50 GAMINGAMERICA

taking a number of steps to combat these and newer forms of cyber attacks. “DDoS attacks were by far the most common events we observed last year, a trend set to continue,” he reported. “Although the digital threats are increasing, at Continent 8 we have tailored our services and suite of products to keep our customers’ risk levels at an absolute minimum.” The company provides its clients a layered defense, Tobin explained. He said businesses need a series of layers that protect both cloud-based services and those running on physical infrastructure. As such, web application firewall (WAF) services, network level DDoS detection, and network level DDoS protection all play an essential part. In addition, endpoint protection and security information and event management (SIEM) also are important given the remote working situation the world still finds itself dealing with. Tobin said if something untoward happens, such as a breach, the appropriate teams are notified immediately. “Although the types of attacks we’re seeing are increasingly growing in complexity and strength, we have many years of experience backing us up,” Tobin said. “Staying at the forefront of technological trends and continual investment in our security product range enables us to keep our customers’ systems fortified.”

America, the beautiful (market) In the American Gaming Association’s recent State of the States report, commercial gaming revenue for US casinos plummeted 31% in 2020 from 2019 as they lost more

“ACCELERATED BY THE PANDEMIC, IT PROBABLY WON’T SURPRISE MANY THAT CYBER ATTACKS WERE SIGNIFICANTLY UP YEAR-ON-YEAR IN 2020.”

CONTINENT 8

than 45,600 business days to pandemic-related closures. However, as legalization of sports betting spread to numerous new states last year, the segment saw significant growth, with Americans legally wagering more than $21.5 billion in 2020, compared to $13 billion in 2019. Tobin said with more states continuing to legalize both sports betting and online gaming, Continent 8 is opening new data centers in the US while continuing to monitor the growth of gambling in Canada and Mexico. “North America is an exciting market and offers a myriad of growth opportunities for us and our customers,” he assessed. Continent 8’s investment in the US began in 2014 in response to regulation of online gaming in New Jersey. This led to the company building a state-of-the-art, Tier 3 data center within the Atlantic City Convention Center, which opened June 2019.

“THE SHIFT TO ONLINE PLAYER ACQUISITION HAS BOOSTED SIGN UPS, BUT UNFORTUNATELY THIS MEANS THAT THEY WILL BE, OF COURSE, OPEN TO MORE CYBER ATTACKS.” “We have grown significantly since, as we now are live in more than 20 states with additional sites going live this year,” he adds. 2021 will be a pivotal year in the US, Tobin continued, with 19 states set to decide on legalizing online sports betting. “This rapid regional expansion has been a continual challenge, but we pride ourselves on our first-to-market capability for our customers. With new markets switching on very quickly, we have to act fast to ensure operators can maximise the growth opportunities. Our customers can be reassured that Continent 8 will be present in every suitable regulated state. And with that, our on-the-ground team has expanded significantly to best service our customers’ needs.”

Fighting fraud at online signups Among the challenges posed by the pandemic, many sports betting operators had to change their account-opening procedures from in-person to online. From one perspective, that means more people are able to sign up more quickly and start playing, but as head of a security firm, Tobin sees vulnerabilities. 52 GAMINGAMERICA

“As with most things, there are two sides to this coin. The shift to online player acquisition has boosted sign ups, but unfortunately this means that they will be, of course, open to more cyber attacks.” Tobin said operators should be using one of the many know your customer (KYC) software suppliers. To do so, operators will have to interface their betting platform with the KYC platform via an API, which opens up potential attack vectors for cyber criminals. To mitigate the risk, Tobin advised operators to allocate significant resources to API protection and ensure their network is regularly checked for weaknesses using key techniques such as penetration testing. “This process is absolutely critical to your systems protection, given the extremely sensitive information being transmitted, such as passport and driving license scans,” he says. Internal breaches are an increasing risk too, Tobin added. As more processes are completed online, it gives rise to criminals seeking to exploit a company by falsely claiming to be from a legitimate organization. This is usually combined with a threat or request for information like that an account will close, a balance is due or information is missing from an account. “Employees need to be continually trained in how to identify and address these malicious attempts from the early stages, minimizing any opportunities for a safety breach,” he warned.

Looking ahead to a new normal Despite the pandemic, Tobin said 2020 was a truly successful year for Continent 8, and the company is ready to move ahead. “We expanded our footprint, welcomed new customers, invested in our product range, forged additional partnerships with hyperscale providers and grew our team globally,” he said. “Looking forward, our plan is one of continued strategic expansion across the globe. Just like everyone else, we will have to adapt to the new normal and navigate the evolving online gaming landscape from a fresh perspective.” Tobin said Continent 8 is excited about new regions opening up and what that means for online gaming as an industry. Product innovation will play a big role in the company’s future, he said, as well as “developing already proven products and partnerships, such as AWS, and becoming an AWS Select Consulting Partner, tailoring them to market needs in real time,” Tobin continued. “Our customer centric approach is an aspect that will remain the same; this will always be a pillar of our company ethos, which is why we are so excited about coming out of lockdown, keen to get back on the road, see our customers face-to-face and build lasting relationships.”

100% LAS VEGAS

READY TO ROLL Ezra Amacher, explores how the return to full capacity has Las Vegas poised for a prolific summer, highlighted by the opening of Resorts World, and the return of conventions and entertainment events. When Jill Yank arrived in Las Vegas from her home of Newport Beach, California, on Memorial Day, she wasn’t quite sure what to expect. Yank’s last trip to Las Vegas in October 2020 had left her disappointed. Though casinos had been open for several months by that point, the visit didn’t offer the usual escape she had come to cherish during her three-plus decades of traveling to Las Vegas. Yank checked in to Caesars Palace the night of May 31, mere hours before the Strip would formally return to 100% capacity for the first time since the start of the Covid-19 pandemic. Yank was quickly immersed in a different world than the one she’d left in southern California. Hundreds of guests streamed through the hotel lobby, while the casino’s poker room was packed to the brim. Even open slot machines were hard to come by. 54 GAMINGAMERICA

“Everybody was just out in droves again and it was extremely crowded,” says Yank, a real estate professional. “I was kind of shocked to see people running around again. It was so crowded and not a care in the world. You don’t know who’s vaccinated and who isn’t. It just seemed like nobody really cared, like life is back to normal.” Memorial Day weekend was a significant barometer for Las Vegas tourism, but July and August are when the region could begin to see demand that reflects pre-pandemic times. The opening of Resorts World Las Vegas, plus the debut of the Las Vegas Convention Center’s West Hall and the Boring Company’s underground tunnel, will give tourists plenty of new things to visit on arrival. Plus, the return of large conventions and mass entertainment events all but ensure the region will see sustained travel throughout the summer months.

100% LAS VEGAS

The reopening of Las Vegas is also testing the relationship between employers and the tens of thousands of hospitality workers who make the city tick. Nevada lawmakers recently passed a Right to Return law that gives workers laid off during the pandemic the right to return to their jobs beginning July 1. Approximately 50% of the 60,000 Culinary Union members were still out of work by mid-June, for instance. Local and state leaders appropriately timed Las Vegas’ reopening with the larger economic recovery of the United States. As millions of people received their vaccinations this spring, Las Vegas became a de-facto destination for Americans antsy to move around freely and let go of Covid worries. By the second week of May, casino operators began receiving the green light to return to full capacity and remove social distancing measures, including mask wearing, as long as their workforce was 80% vaccinated. Nearly every major Strip casino was approved for full capacity ahead of the June 1 full reopening deadline. The first weeks of June marked several significant milestones. World of Concrete, which kicked off June 7, ended a 15-month convention drought. The convention coincided with the long-awaited debut of the Las Vegas Convention Center’s West Hall, a 1.4 million square-foot space that came with a $1bn price tag. Nevada Governor Steve Sisolak and Las Vegas Convention and Visitors Authority president Steve Hill were among the dignitaries on hand for a ceremonial ribbon-cutting. Construction on the West Hall began in September 2018 and its opening was delayed six months. The building includes

600,000 square feet of exhibition space and 328,000 square feet of column-free space, the largest column-free exhibition space in North America, according to the LVCVA. Samsung also developed a 10,000-square-foot digital screen displayed in an open-air atrium, which is the largest digital experience in a convention center in the country. Exhibition planner Informa Markets, which put on WOC, already has 10 additional events planned at the West Hall by the end of the year. “We are thrilled to be returning to the live event format, especially in the home of the exhibitions industry in the US – Las Vegas,” said Nancy Walsh, president, North America at Informa Markets. “There is an unparalleled magic about in-person connection, from sharing laughs with old friends, creating new ones, learning from industry experts, and seeing and feeling the latest products and innovations.” Elon Musk’s The Boring Co. debuted its LVCC Loop at WOC as well. The underground tunnel carries passengers across a 200-acre campus via Tesla vehicles. The transportation system covers 1.7 miles, using two tunnels and three stations, two of which are surface and one 40 feet subsurface. The Loop transports riders in less than two minutes, saving visitors as much as a 20-minute walk. The system cost $52.5m to build, and there are plans to expand to Downtown, the Strip and Allegiant Stadium. The Caesars Forum Conference Center hosted its first major convention on June 15 as well, welcoming more than 1,000 attendees for the Meeting Professionals International World Education Congress. The 550,000 square foot conference center was initially expected to open last March but the pandemic

THE BORING COMPANY’S UNDERGROUND TUNNEL AT THE LAS VEGAS CONVENTION CENTER.

GAMINGAMERICA 55

100% LAS VEGAS

derailed those plans. Caesars has grand plans for the $370m facility, which will be used as a location for the 2022 NFL Draft.

A WORLD OF DIFFERENCE The return of conventions coincided with another momentous event: the opening of Resorts World Las Vegas. The $4.3bn project had been under construction since May 2015 and navigated through several delays, some outside of operator Genting Group’s control. The resort includes a 117,000 square foot casino and more than 3,000 hotel rooms. It is the first ground-up resort to open on the Strip since The Cosmopolitan debuted in 2010. Resorts World went ahead with a summer opening despite ongoing travel restrictions from Asia, which is expected to provide a bulk of the Mongolian-backed resort’s clientele base. McCarran Airport reported minimal international air travel through the first four months of 2021, and most of those visitors were from Mexico. David Schwartz, a gaming historian and ombudsman at the University of Nevada Las Vegas, expects both domestic and international air travel to pick up considerably later this year. “Traditionally, international tourists were the most lucrative customer segment for Las Vegas, followed by domestic fly-in convention, domestic fly-in leisure, and drive-in customers,” says Schwartz. “For many months after reopening, Las Vegas casinos relied on their least lucrative customer segment, so the return of international and domestic fly-in visitors bodes well for the industry’s future.” The influx of people visiting Las Vegas this summer has undoubtedly put a strain on casinos and other local businesses, many of which were caught off guard by how quickly tourism returned. This spring tourists were met with severe Uber and Lyft shortages, leading Sisolak to lift a ban on ride-hailing surge pricing. Several Strip restaurants and shops have yet to reopen their doors, leaving tourists like Yank frustrated. “I tried to go into two Caesars Palace shops that I frequent and the actual Caesars shop where you get the gift packs and things like that, and it wasn’t even opened,” Yank says.“I asked the staff about that and all over Vegas, they’re having trouble getting people getting back to work because they’ve either gotten other jobs or they’re not fully staffed.” Bethany Khan, director of communications and digital strategy at the Culinary Union, says the blame is on casinos who “simply haven’t recalled employees back to work.” During the peak of the pandemic, 98% of Culinary Union members were unemployed. Only 30,000 were back at work by this spring. That led Sisolak to sign SB386, a law that guarantees laid-off hospitality workers can return to their former jobs beginning in July. “This wasn’t about an argument about a bill,” Sisolak told Culinary Union members during a June 15 trip to southern Nevada. “This was about people. This was about people that worked for a living – hard-working people that have built this 56 GAMINGAMERICA

KATE WIK

city. They fueled this tourism economy. Without you, nobody’s coming to Las Vegas.” Known as the Right to Work bill, the law mandates employers (with 30 or more employees) must offer laid-off employees job openings for the same or similar positions as the employee previously worked. Workers who receive a job offer will have 24 hours to accept or decline and must be ready to work within five days. Protections in SB386 begin July 1 and expire August 31. “No organization in Nevada has done what the Culinary Union has accomplished in order to protect workers over the past 14 months, from providing daily food assistance to fiercely advocating to have workers brought back to work, and preserving worker’s health care benefits. We are proud to have supported workers every step of the way during this crisis,” Khan says. Casinos have worked with the Culinary Union to vaccinate workers, and so far the vaccinations have kept Las Vegas’ Covid-19 infection rates down. Between mid-May to mid-June, the region maintained a seven-day average of fewer than 300 new cases per day. Ensuring that workers and guests remain healthy is a top priority ahead of a loaded summer entertainment calendar that should deliver enormous crowds. Some highlights: the July 4 fireworks show, Justin Bieber at the Wynn, UFC 264 Poirier vs. McGregor at T-Mobile Arena, the WNBA All-Star Game at Mandalay Bay, and the CONCACAF Gold Cup Final at Allegiant Stadium. “Las Vegas is a city built on hospitality and entertainment, and we are thrilled to welcome visitors back from around the country,” said Kate Wik, chief marketing officer for the LVCVA. “The excitement throughout the destination is palpable, and we know the pent-up demand to visit is real.”

CHALKLINE

IN THE ZONE Daniel Kustelski, CEO of Chalkline, says the football season is the best way for sportsbook operators to acquire new players at scale. Sportsbook operators are engaged in a major fight over player acquisition, but the ferocity of the battle is set to increase significantly as the start of the NFL season approaches. For both retail and online sportsbooks, this is more important than all other sports on the US calendar. This is because football is the most watched sport week in, week out, and it's also reflected in the betting activity in states already live like Nevada and New Jersey. Operators seem to be aware of this. If we look at data from last year despite Covid-19 disruptions, bonuses from operators are much higher at the start of the season than a few months in. There are other indicators of football’s importance to the betting industry; we often hear state regulators say they want to issue their first licenses before the football season starts. Then there are the brands looking to launch into these states. Several overseas operators have said they plan to enter various states in Q3 2021 in time for the NFL August pre-season.

DANIEL KUSTELSKI

DRAWING THEM IN TV advertising will play a big role in customer acquisition and the football season presents an opportunity to target large audiences of potential bettors. In 2020, eight of the top-viewed US TV shows were football games. The Super Bowl topped the list with an audience of 102,031,000 with the NFC Championship 49ers v Packers game in second with 43,626,000. These numbers should encourage operators to invest in marketing now and to educate, acclimate and introduce fans to betting products so they’re engaged in time for the season start. There's certainly demand for football as a sport to bet on. Historically, it's the most bet-on sport in Nevada. This is quite something when you consider there are just 256 NFL games per season compared with 2,460 NBA games. Handle per game is on average 10 to 15 times higher, too. It’s a similar story in New Jersey. In 2020, football counted for the largest share of handle, accounting for the vast amount of parlays on football. Football claimed 23% of handle, basketball 19% and baseball 7% while parlay bets accounted for 21% of total handle ($5.9bn). Oregon’s lottery-run, SBTech-powered Scoreboard sportsbook is also trending heavily toward football; of its 40,000 active players, 88% have placed a bet on football. The importance of football to drive player acquisition can also be seen in how operators have previously bonused around the season start and the Super Bowl. Take Pennsylvania, for example. Last September, bonusing as a percentage of hold hit 65% while

in February (Super Bowl it reached 50%. The numbers were even bigger in Colorado. In September, operators bonused at 181% of hold while in February it was 98%.

SPEND BIG OR SPEND SMART TV advertising and bonusing are powerful player acquisition tools but they’re also expensive. So I'd encourage operators to be smart with their marketing activity and spend. This can include competitions that run throughout the season. The most prominent is the Westgate SuperContest but others are popping up. This includes Circa Sports, which recently launched two competitions – Circa Sports Million and Circa Survivor – with $10m in guaranteed prizes up for grabs. Then of course there are freeplay games that can be launched to players now to help engage, educate and acclimate the more than 30 million people the AGA estimates will place their first sports wager over the next few years. They also allow operators to streamline marketing costs – CPAs are currently peaking at around $1,000 – while also boosting retention to ensure the best ROI and highest CLV. Of course, they need to be integrated into a wider marketing strategy, but from the data above, it’s clear football is where operators must focus their efforts and budgets. The operators that understand this and refocus their strategies now will be best positioned to leverage the opportunity the football season presents when it kicks off in September. GAMINGAMERICA 57

SIGHTLINE

THE CASHLESS GAMING REVOLUTION Joe Pappano, CEO of digital payments provider Sightline Payments, explains how Covid-19 is transforming the casino and gaming industry.

JOE PAPPANO

For decades, the gaming industry has operated around the clock with cash as its central vehicle. Today, gaming operators are still open 24/7, but a once-in-a-century phenomenon, Covid-19, is changing the cash component forever. Everyone was caught off guard by shutdowns caused by the pandemic, but perhaps none was as surprised as the casino sector, used to burning the midnight oil for consumers. Clearly, the need to reopen was urgent, but safety had to be the first priority. Unprecedented times called for groundbreaking safety measures: digital payments’ long-overdue arrival in the gaming industry. The Nevada Gaming Commission’s June 2020 decision expedited casinos’ adoption of cashless payments, in line with every other consumer-focused sector of the US economy. The only downside was casinos and other gaming operators were so cash-dependent that solutions seemed further away and too complex to fully integrate fast enough. Enter Resorts World Las Vegas. In the past year, mobile wallets overtook cash, as more consumers became less comfortable with hard currency. In Q1 2020, MasterCard reported a 40% increase in contactless transactions year-over-year. Half of US smartphone 58 GAMINGAMERICA

users are now expected to use contactless payment options by 2025. Plus, 82% of consumers say they now view contactless options as a cleaner way to pay. According to the American Gaming Association (AGA), nearly 60% of casino visitors are less likely to use cash in their everyday lives due to the pandemic, and more than half of gamblers say they’d likely utilize a contactless payment option when they gamble. Thankfully, Covid-19 was not the only phenomenon that took place last year. Innovation is a force in its own right, and the pandemic spurred one of the greatest revolutions in the gaming industry in decades. Consumers’ priorities shifted, and so did those of the Strip’s first new casino in 10 years. Now, roughly a year after Nevada casinos reopened, patrons will have access to the first-ever casino property with a full cashless infrastructure. Thanks to a partnership between Sightline, NRT Technology and Konami, Resorts World Las Vegas will be the first casino in the world with a fully integrated cashless infrastructure. Patrons will be able to conveniently pay for gaming, entertainment and other onsite offerings from their phones. While the pandemic may have accelerated payments modernization in the gaming industry, make no mistake, the benefits of digital payments integration go far beyond just cleanliness and convenience. With Resorts World as a model, consumers will now be able to fund gaming from a variety of sources, thereby taking advantage of technology that allows them to set budgets and limits for their integrated casino experience. Payments modernization will also give law enforcement new insight into how money is spent, possible anomalies and advanced tracking capabilities that they simply do not have with cash. Cash will always have its place, but consumers can now experience the convenience of multiple payment options and cutting-edge technologies at their fingertips, while businesses expand and regulation becomes more seamless and effective. This summer, keep an eye on the Las Vegas Strip. What started as a frantic search for solutions during a pandemic has now led to what could be one of the largest transformations of the gaming industry in history. Digital payments are here to stay.

SOCURE

ID REQUIRED Michael Bartlett speaks with Johnny Ayers about how ID verification technology provider Socure started in financial services, and is expanding its presence in gaming.

JOHNNY AYERS

Digital identity verification technology provider Socure already made a name for itself in the financial services world before turning its attention to gaming, and its founder and CEO says its experience makes the crossover a natural fit. Johnny Ayers spoke with Gaming America on the same April day the New York City-based company signed a multi-year deal with DraftKings, Inc., to help the operator meet compliance standards. DraftKings said it will use Socure’s Intelligent KYC and Global Watchlist with Monitoring products to assist in its customer verification processes across its daily fantasy sports, sportsbook and online gaming offerings. Ayers said Socure’s platform draws from many data sources, including proprietary data with over 290 million good identities, and more than seven billion records from credit, utility and telecom. The partnership with DraftKings was a stamp of approval in online gaming, Ayers said, and noted financial services is a heavily regulated industry where fraud and money laundering are major problems. “We've been successful in financial services, for nearly nine years,” he says. “We work with many of the top banks, and Wells Fargo and Citi are among our investors.” West Virginia's MVB Bank, another Socure investor, banks many companies in online gaming. Ayers said its CEO was instrumental introducing Socure and its services to the burgeoning market. “Fraud control and anti-money laundering are important in both industries, especially given the change from in-person sports betting to online registration,” Ayers said. “As platforms such as DraftKings grow, they look like a tier 1 bank in the 60 GAMINGAMERICA

number of accounts they are opening. Know Your Customer is very important to us.” Socure is excited about partnering with online gaming and sports betting companies, Ayers continued, adding the company expects to announce more partnerships soon. “As you see technology on contactless payments advance, a lot of the land-based operators come to us to verify identity for customers setting up digital wallets,” he explained. “Contactless payments are moving quickly in casinos. That requires ID verification and age verification, just like online gaming.” According to Ayers, fraud is a balloon – you push one side and it expands somewhere else. There've been regular data breaches, so Ayers said it’s an important time to use identify verification services. The company is tapping machine learning to identify a person’s identity with the best available accuracy. “It is a strategic competitive advantage for operators if they have super accurate verification models so they can give a seamless customer service experience for the good customers,” he said. Theoretically, an operator could stop all bad actors by manually reviewing every file, but that would be a terrible customer service experience, Ayers added. “You have to be automated, seamless and accurate, all in a few seconds,” he noted. “We will be helping DraftKings push the envelope on how they service their customers in all the states in which they operate.” According to Ayers, the regulations in the states that have legalized sports betting are similar, and companies tend to read the regulations their own way, but for the most part, the rules are very similar with a few unique wrinkles. “New Jersey did a lot of leading in setting standards,” he says. “The biggest factor to watch out for is some states allow users to be 18 versus 21 for fantasy sports versus gambling.” The message from Socure to potential clients is that they aim to verify 100% of good identities while identifying all fraud. Heavy analytics are key to accomplish this lofty goal. “As we add peers to DraftKings, it allows us to serve [them] better. The more Socure scales, the smarter we get.” The ability to verify identities of 5% more people can be seen as 5% growth, and millions in profit, all without increasing risk, Ayers said. Gaming operators are fighting to be first to run in all states with legalizing sports wagering and online casino games, but they need assistance.

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WHAT'S HOT As the summer kicks into gear, Gaming America offers some relief with the coolest and most exciting products on the market right now.

GALAXY GAMING: BONUS CRAPS PROGRESSIVE

GALAXY GAMING'S BONUS CRAPS PROGRESSIVE

Galaxy Gaming has unveiled the newest enhancement to its roster of casino games – Bonus Craps Progressive. The company said Bonus Craps is the most popular craps side wager in the market. Galaxy Gaming is building upon the existing success and broad reach of Bonus Craps, and now delivers an exciting progressive offering to enhance your table games floor. This player favorite and proven performer has been enhanced with a progressive option. Bonus Craps Progressive features two progressive models and a variety of paytables: Make ‘Em All Progressive – wins if all of the Make ‘Em All numbers (2, 3, 4, 5, 6, 8, 9, 10, 11, 12) are rolled in any order, before a 7 is rolled or a previously rolled number is repeated. The jackpot is won when all 10 numbers are rolled. Fired Up Progressive – wins if a sequence of numbers is rolled in an exact order matching the posted paytable. For example, rolling 6-5-4-3-2 in that exact order wins the jackpot. This enhancement to the already popular Bonus Craps is sure to add energy to your casino floor.

JCM GLOBAL: ICB INTELLIGENT CASH BOX SYSTEM More than 200 casino groups in North America use JCM Global’s ICB Intelligent Cash Box technology on over 270,000 EGMs, and that number continues to grow. The ICB 3 system solution is field-proven to enhance cash and asset management, reduce human errors and increase compliance. This newest version empowers operators with even better, smarter and faster data than ever before. Its new intuitive design streamlines and simplifies cash box collection, saving you time and labor. The technology also further increases security and efficiency, all with an updated, user-friendly interface that sets new standards for gaming. ICB 3 also automatically records cash box totals, and asset tracking is digital and automatic, which reduces human error and eliminates the need for meticulous cash box rotations. ICB 3 brings the gaming industry an innovative combination of management dashboards, mobility and customizable web reporting that allows users to access essential information securely anytime, anywhere. Additionally, it provides multiple graph-style reports, which can easily be modified for each user 62 GAMINGAMERICA

INTELLIGENT CASH BOX SYSTEM

and can be exported to Excel and PDF files. In the first part of 2021, JCM had several notable installations or upgrades of its ICB 3 in properties of all sizes, including Colonial Downs’ Rosie’s Gaming Emporium in Dumfries, Virginia; the casino expansion at Kickapoo Casino Shawnee and an upgrade of JCM’s ICB system in the Kickapoo main casino to the latest version of ICB 3; Black Hawk Casino in Shawnee and Sac & Fox Nation Casino in Stroud, Oklahoma; Mohegan Gaming & Entertainment’s new Mohegan Sun Casino at Virgin Hotels Las Vegas; and the new Hard Rock Casino Northern Indiana in Gary.

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ARISTOCRAT GAMING’S NEW BUFFALO LINK SLOT GAME Casino players everywhere are cheering "Buffaloooooooo" as the biggest, most anticipated game of the year – Buffalo Link from Aristocrat Gaming – stampedes onto casino floors from coast to coast. Players will instantly recognize how Buffalo Link combines the thrill and functionality of Aristocrat's legendary Lighting Link and Dragon Link games with the theme and features of the gaming industry's most recognized slot brand, Buffalo. Every player's favorite Hold & Spin functionality is in Buffalo Link, and from that feature, players have an opportunity to win the linked Grand Jackpot, standalone Major, or static Minor and Mini bonus awards. Buffalo Link has exciting new features, such as first-ever 2x and 3x multipliers on the last reel of a Buffalo game. Unique to Buffalo Link is a new mystery must-hit-by bonus, awarding either Free Games or the Hold & Spin bonus feature. Players will enjoy Buffalo Link on Aristocrat’s all-new MarsX Portrait cabinet, which provides an incredible gaming experience with amenities such as a curved 4k display, 4.1 Spatial KineticSound, virtual button deck, and wireless USB charging for mobile phones. Aristocrat Technologies, Inc., is a subsidiary of Aristocrat Leisure

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AGS LAUNCHES NHL-THEMED SLOT SERIES WITH VEGAS GOLDEN KNIGHTS GAME AGS signed a license agreement with the National Hockey League for NHL-themed slot games and table product offerings in the US and Canada. The first slot machine in the hockey collection carries a Vegas Golden Knights-theme. The game made its debut in April at South Point Casino in Las Vegas.The new game taps several features designed to appeal to Vegas locals who have a lot of love for their VGK, as the team is referred to, including the team’s “Vegas Born” slogan. The VGK slot game is larger than life – taking the space of three standard slot games at eight feet wide by eight feet tall. Game play features multiplier wilds that maximize the win to as much as 10x the bet, and scatter pays that can deliver massive wins when players land one or two Vegas Stars, one or two Golden Knights, or one multiplier. It has seating built for more than one player, which encourages players to sit and enjoy the experience with family and friends. South Point slot director Cliff Paige said, “We are elated to be the first casino to unveil the Vegas Golden Knights slot game, and look forward to offering our loyal players, many of whom are Las Vegas locals and huge Golden Knights fans, a hockey-themed

VEGAS GOLDEN KNIGHTS

slot experience based on an enormously popular team. We expect the Vegas Golden Knights game to do very well; not only does the game offer a community-style play experience as people gather to watch those giant reels spin, it also provides a great social media photo opp.” AGS chief marketing officer Julia Boguslawski added, “As a corporate partner of the Golden Knights and being headquartered in Las Vegas, it was the perfect opportunity for AGS to deliver an engaging and highly social gaming experience on an attention-grabbing slot cabinet to capitalize on the team's enormous popularity and success.” GAMINGAMERICA 63

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PACE-O-MATIC: MANAGING ROUTES WITH VELOCITY

PACE-O-MATIC

Pace-O-Matic purchased MCM Elements and has rebranded it. Velocity is the name of the company’s new umbrella brand that will house all products related to managing routes. Velocity is a suite of software products designed to increase the efficiency, speed and security of route management for

operators in the amusement industry. MCM Elements has nine years’ experience in the amusement industry, and flagship product RouteBoost is a cloud-based route management system allowing only operators to organize and store important accounting, servicing, collection, fill and repair information. RouteBoost provides route management to make an operator’s efficiency that much easier, faster and accurate by streamlining collections, service calls, scheduling and scanning of a QR code to request fills. RouteBoost Pro uses the internet to collect data from game terminals to the cloud and generates reports from which business decisions can be made to support management decisions related to cash and assets. The second product under the new brand is TicketShield. TicketShield and Ticket Redemption Terminal (TRT) close the loop on cash in and cash out. Operators pay only once for a winning game ticket, thus reduces the potential theft of game proceeds and secures the operator’s vested interest. It brings enhanced security of cash and compliance with age requirements, and a lift in play for locations that utilize these items. Third, CashKeeper handles cash inventory management for ATM and TRT machines for an operator’s route. Finally, Law Enforcement Web Site allows easier compliance of terminals on the street to ensure that only legal terminals are placed at locations. Additional features and GPS support are provided as part of MCM Elements RouteBoost. MCM Elements has recently hit a major milestone, delivering $7 billion in revenue for its customers, while CashKeeper has delivered more than $123m in revenue.

NOVOMATIC AMERICAS: ASIAN AVIARY CELEBRATION

POWER PRIZES

Three magnificent Asian Aviaries make up this powerful banked package of standalone progressive games: Noble Peacock, Royal Crane and Eternal Mandarin Ducks all pay tribute to the rich symbolism of bird life in Chinese mythology. 64 GAMINGAMERICA

The precious lotus flower opens extra chances in the free spins while red envelopes add some extra coin power to trigger the Power Prizes coin-respin feature for the big jackpot win. With player-friendly multi-denomination options and the most powerful talismans crowding the reels, the Power Prizes collection of games is a marvelous attraction for every gaming floor. The beautiful Chinese lovebirds in Eternal Mandarin Ducks spread luck and fortune. This is a Power Prizes progressive highlight with a special red envelope twist. The Noble Peacock may very well cast one or the other benevolent eye on these reels to help you win the Power Prizes progressive. Watch out for the lotus flower and the red envelope for extra chances for the jackpot. Royal Crane is the Asian aviary game that holds the key to the secret treasure. Unlock the Power Prizes with a little luck and some help from the red envelope. The beautiful aesthetic and gorgeous imagery combined with an exciting math experience make these games highly entertaining birds of play.

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PRODUCT REVIEWS

DR GAMING TECHNOLOGY: CASHLESS IS KING

NEW CASHLESS GAMING

Cashless gaming, just like cashless anything else is without a doubt where the future lies in terms of pay and play at land-based casinos. One only has to look at where retail is, as well as online gaming and our digital neighbours in the online gambling and sports betting sectors, to realise that, and most operators have. The barriers to

adopting the technology, though, are in most cases either financial, operational, regulatory or a combination of all three. While as a technology solutions provider we can assist in driving regulatory lobbies, we cannot control them; what we can do, though, is provide solutions to the associated operational and financial questions. Let’s start with the cost. Our patented management system operates without a permanent server connection, negating the need for operators to purchase expensive servers. Then in respect of the transition or installation time, and with proper pre-planning, this can be (and has been) undertaken in sections across a casino floor in a single day without any need to close the casino. Lastly, in respect to security, ours is managed by our patented drSMIB, which collects all relevant game play data from each individual data touch points like a slot machine, the cash desk, or a live table, and shares it with all other drSMIBs in the network. In so doing, it ensures unmatched data redundancy and transactional security, as well as the provision of real-time data and reporting. Lastly, and notwithstanding the above, or the fact that some jurisdictions (like Mexico for example) have been cashless since markets opened, a key takeaway has to be the fact that players, in most cases, want choice; and while cashless is without a doubt where we’re all headed, most players (for now) want a cash option too.