Global Gaming Business, July 2020 by Global Gaming Business

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GGB Global Gaming Business Magazine

July 2020 • Vol. 19 • No. 7 • $10

CRUSHING

CASH

CASINO MARKETING MONITOR PAGCOR FIRE SALE? TRIBAL TURNAROUND RG & CORONAVIRUS

Sports Bettor Service How to improve the player experience

How operators and suppliers are working together to return to prosperity

Brazen Betting

Why unregulated games are thriving in loopholes

Association of Gaming Equipment Manufacturers

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CONTENTS

Vol. 19 • No. 7

july

Global Gaming Business Magazine

20 COVER STORY

COLUMNS

Rethinking Cash

10 AGA Cashing Out

The risks of handling cash in a global pandemic may accelerate the disappearance of cash as the main method of payment in casinos, as it has disappeared as a payment method in most commercial settings outside of gaming.

Jonathan Michaels

12 Fantini’s Finance Riding the Roller Coaster Frank Fantini

30 Responsible Gaming Don’t Forget RG Ted Hartwell

By Roger Gros

FEATURES

38 Tribal Reboot

16 Team Marketing Casino marketing is a team sport, with a property’s success as the No. 1 driver of job satisfaction.

Tribal casinos were the first to reopen following the Covid-19 shutdown, and while not subject to state oversight, tribes have worked with state officials on their plans to reopen safely.

By Julia Carcamo

By Bill Sokolic

26 ‘Skill’ and Money

44 Relying on Data

Unregulated gaming machines purporting to employ skill continue to operate, boosted in two states as a way to recoup money during the global pandemic.

42 Making My Point Cure for Insomnia Roger Snow

54 Operations The Elephant in the Room Andrew Klebanow

DEPARTMENTS 4 The Agenda

As casino hotels prepare to return to operations, data analytics technology becomes an important tool in building guest profiles.

6 By the Numbers

By Dave Bontempo

14 AGEM

By Frank Legato

8 5 Questions

48 Emerging Leaders With Aristocrat’s Luciana Van Sickle

50 New Game Review 60 Frankly Speaking 62 Goods & Services

34 F2P and Sports Betting Offering sports bettors free-to-play games has been one way sports betting operators have maintained fan engagement during the Covid-19 shutdown. By Brendan Bussmann

56 Privatizing PAGCOR Strapped for revenue because of the Covid-19 crisis, politicians are proposing the sale of casino assets owned and operated by the Philippine Amusement and Gaming Corporation.

65 People 66 Casino Communications With Sara Slane, Founder, Slane Advisory

By Andrew Klebanow

JULY 2020 www.ggbmagazine.com

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THE AGENDA

It’s Only Words

Vol. 19 • No. 7 • JULY 2020 Roger Gros, Publisher | rgros@ggbmagazine.com twitter: @GlobalGamingBiz Frank Legato, Editor | flegato@ggbmagazine.com twitter: @FranklySpeakn

By Roger Gros, Publisher

Marjorie Preston, Managing Editor mpreston@ggbmagazine.com Monica Cooley, Art Director mcooley@ggbmagazine.com

o it appears that the phrase “pent-up demand” has superseded the phrase “new normal” when it comes to evaluating the current state of the casino industry. I know we’re all sick of the new-normal phrase. Pent-up almost sounds like constipation, but the good kind—if there’s anything like that. Yes, we all yearned for the reopening and thought the closures went on too long—at least, I did. As a resident of Nevada, which had relatively low Covid-19 numbers compared to other states, I thought Governor Steve Sisolak delayed too long. Remember, gaming tax revenues account for a full 40 percent of the Nevada state budget, with tourism and other tax revenues related to gaming taking up at least another 20 percent. And with more than 300,000 people out of work, which gave Nevada the highest unemployment rate for any state in history—by far—it was frustrating to see gaming people and companies suffer so badly. And when Arizona reopened a full two weeks before Nevada to packed (within Covid parameters) casinos—all citing “pent-up demand”—it was even more frustrating, and advanced to aggravating. Around the nation, the story was the same. Customers who had been confined to their houses for more than two months had one thing in mind—let loose and gamble for a while. Now, this was a surprise to most observers. First, they thought people would be timid and fearful about coming out of the lockdown and gathering around other people. Well, that proved to be wrong. People have missed the camaraderie of gambling and hanging out on the casino floor. They also expected that because many people took a financial hit, whether it was getting furloughed from their jobs, seeing their 401Ks shrink, or some other fiscal calamity, their desire to return to gambling would be tempered. Again, not necessarily true. A study by Synergy Blue, the innovative arcade-game slot maker, revealed that not much would change in the budget of the gambler, and that’s pretty much turned out to be true. The extra $1,200 that every American got in their pockets wasn’t covered in the survey, but the spend so far seemed to be quite healthy. Of course, every casino opened with similar

Global Gaming Business JULY 2020

procedures in place. They all included a combination of temperature checks, testing for employees, social distancing, capacity limits, Plexiglas dividers, cleanliness patrols, face mask stipulations and more. Virtually all casino employees were required to wear face masks, which were strongly recommended for casino customers in most jurisdictions but mandatory in others. Disagreements about how effective they were abounded, particularly when some patrons showed up with old western bandanas covering the bottom part of their faces, but not sealed up. Talk about a nightmare for surveillance. I strolled through the Bellagio the first day it was open and the casino floor looked like a foreign land. The Plexiglas shields encompassed every blackjack table and bartop slot. Every other slot machine was turned off—a terrible look, by the way. A full craps table meant six players, three on each side. The conservatory at Bellagio was open and spectacular as usual. But you had to line up and wait until people came out so you could maintain the 6-foot distance. The lobby bar still included the piano player, but it will be a while before any of the great shows, conventions or public events return to Bellagio. Those face masks turned into an issue when probably only a quarter of the customers wore them, even though there are boxes of them at the entrances to the casino. In the ensuing days, there was a debate over whether face masks should be required for all who enter the casino, but the gaming board decided to leave it alone. What did I see during this day 1 of freedom? People having fun, which has been a scarce commodity over the last few months. I saw people who aren’t living in fear, who just want to get on with their lives, which includes enjoying gambling and all that goes with it. And frankly, this surprises me. I’ve had several conversations over the past year about how the fun seemed to have gone out of casino gaming. This experience seemed to reject that contention. No, we don’t know everything about how casinos will respond after reopening, but providing a place where people can find an escape and have some fun to satisfy their “pent-up demand” isn’t such a bad thing for our business.

Terri Brady, Sales & Marketing Director tbrady@ggbmagazine.com Becky Kingman-Gros, Chief Operating Officer bkingros@ggbmagazine.com Jessica Walker, Operations Manager jwalker@ggbmagazine.com Lisa Johnson, Communications Advisor lisa@lisajohnsoncommunications.com twitter: @LisaJohnsonPR Columnists Frank Fantini | Ted Hartwell | Andrew Klebanow Jonathan Michaels | Roger Snow Contributing Editors Dave Bontempo @bontempomedia | Brendan Bussmann Julia Carcamo @jccarcamo | Andrew Klebanow Bill Sokolic @downbeachfilm __________________

EDITORIAL ADVISORY BOARD Rino Armeni, President, Armeni Enterprises

•

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

• Julie Brinkerhoff-Jacobs, President, Lifescapes International

• Nicholas Casiello Jr., Shareholder, Fox Rothschild

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

• Dean Macomber, President, Macomber International, Inc.

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

• Jim Rafferty, President, Rafferty & Associates

• Thomas Reilly, Vice President Systems Sales, Scientific Games

• Michael Soll, President, The Innovation Group

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

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

• Roy Student, President, Applied Management Strategies

• David D. Waddell, Partner Regulatory Management Counselors PC Casino Connection International LLC. 901 American Pacific Drive, Suite 180 • Henderson, Nevada 89014 702-248-1565 • 702-248-1567 (fax) www.ggbmagazine.com The views and opinions expressed by the writers and columnists of GLOBAL GAMING BUSINESS are not necessarily the views of the publisher or editor. Copyright 2020 Global Gaming Business LLC. Henderson, Nevada 89014 GLOBAL GAMING BUSINESS is published monthly by Casino Connection International, LLC. Printed in Nevada, USA. Postmaster: Send Change of Address forms to: 901 American Pacific Dr, Suite 180, Henderson, NV 89014

Official Publication

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BY THE

NUMBERS

Figure A

The Increasing Acceptability of Casino Gambling in America

STATe oF The IndUSTRY T

he annual report by the American Gaming Association, the “State of the States” report, is the high point of the analysis of commercial gaming in the United States each year. The 2020 report, reflecting data from 2019, will be the last of the good times for a couple of years, but it does show how popular gaming was becoming prior to the Covid-19 disaster. A longtime element of the State of the States measures the acceptability of gaming to Americans by answering the question “Gaming is acceptable/unacceptable for me or anyone else.” In Figure A, the 2020 report shows the largest gap in the history of the research, with 75 percent more acceptable than unacceptable. The data further shows that 105 million unique Americans visited a casino of some sort last year, up from 53.1 million when that was first measured in 2001. Not surprisingly, gross gaming revenues for commercial casinos hit a record high in 2019, $43.6 billion (Figure B). And while the State of the States report focuses only on commercial gaming, it recaps tribal gaming revenue (also a record high) to show that the commercial casinos are only part of the picture in the U.S. and partner with tribal communities in important and influential ways that benefit the entire industry (Figure C). But the State of the States is really exactly that. The AGA report takes every state where gaming is legal and gives a in-depth analysis, complete with the types of gaming offered in that state, the revenue numbers, gaming taxes created, market overview, and impact on the state (Figure D). To download a copy of the 2020 State of the States report, visit the AGA website, AmericanGaming.org.

Figure B

Annual U.S. Commercial Gaming Revenue 2008 to 2019

Figure D

Figure C

United States: Tribal Casino Gaming Revenue FY2014 to FY2018

Global Gaming Business

JULY 2020

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NUTSHELL

“They

5Questions

Scott Fisher and Suzanne Leckert

Partners, Convergence Strategy Group hen Virginia legalized casinos in five economically disadvantaged locations last year, Danville was the W only city that went through a request for proposal (RFP) process to find a developer for a casino in that town. The city hired Convergence Strategy Group and principals Scott Fisher and Suzanne Leckert, to handle the process, which just ended with the city choosing Caesars Entertainment out of seven original bidders. Fisher and Leckert explain how the process was developed, who they worked with and why Caesars was deemed to have the most compelling plan for a casino at an abandoned industrial site. They spoke with GGB Publisher Roger Gros from their offices in New Orleans in June. To hear a full podcast of this interview, visit GGBMagazine.com. GGB: Why did Danville decide to issue an RFP rather than simply negotiate with one company? Scott Fisher: There are so few opportunities in the country to develop some great properties in relatively

1 2 3 4 5

non-competitive markets. While Caesars is a great company, by issuing an RFP Danville was able to see proposals from many other great companies to bid against them. The city got to see some great opportunities through the bidding process and ended up getting what we think is a really attractive plan by Caesars. In addition, the city manager wanted to make sure they had an open and transparent process, so there could be no allegations of a backroom deal with a gaming company, and they clearly accomplished that. What’s the next step in the process? Suzanne Leckert: Danville will hold a referendum in November. While we’ll be providing some informa-

tion, the campaign is mostly going to be handled by Caesars. The city itself is being neutral. They’re not advocating for or against having a casino, they just want all the information to be out there, even though the fiscal impacts will be substantial. What was the city looking for in the proposals? What did Caesars propose that put them over the top? Leckert: When we first got involved, the city manager of Danville, Ken Larking, told me he wanted to put

any revenues they get from casinos directly into education for the town to make Danville’s school system the best in the state. So the city was most interested in the tax revenues it would earn off any casino project. But they were also looking for redevelopment of brownfields, these abandoned industrial sites that are a very visible sign of the city’s decline. The Caesars proposal did just that, proposing a development at the Schoolfield and White Mill sites. The city also realizes it can also use some of the Caesars money to incentivize other developments on these sites. Why is Danville such a good market, according to your report to the city? It is on the border with North Carolina, which has a couple of tribal casinos. Fisher: We started by doing a market assessment and arrived at a pretty broad range of what the market po-

tential was, depending on the scale of the resort that was built. But we also did an alternative model, which recognized that North Carolina as a state is also looking into the possibility of allowing commercial casinos. Since the market potential for Danville was going to be driven very much by North Carolina residents, especially in the Greensboro and Raleigh/Durham area, that could chop the revenue potential in half. But the Cherokee properties really don’t have any overlap of the market for a Danville casino. Caesars is in the middle of a purchase by Eldorado. How did the city take that into account when considering that application? Leckert: We requested information about the merger to find out if Eldorado would still be on board at the

end of the day. We received assurances by Eldorado and Caesars management that this project has the full support of Eldorado, and they remain committed to it going forward.

Global Gaming Business JULY 2020

Said It”

“The days of 16 people standing around the dice table high-fiving one another are over for now. But it’s going to bounce back. Las Vegas is part of the American culture. I think it’ll come back better than ever.” —Adam Wiesberg, general manager, El Cortez Casino in Las Vegas, who’s confident the impact of the coronavirus will fade over time

CALENDAR EDITOR’S NOTE: Since every conference and trade show set for July has either been canceled, rescheduled or modified, below are their new dates and/or status. CANCELED: July 27-29: OIGA 2020 Conference, Tulsa Convention Center, Tulsa, Oklahoma. Produced by the Oklahoma Indian Gaming Association. For more information, visit OIGA.org. CANCELED: August 11-13: Australasian Gaming Expo, ICC Sydney. Produced by the Gaming Technologies Association (GTA). For more information, visit AustGamingExpo.com. September 11-12: NCLGS Summer Meeting 2020, Intercontinental Magnificent Mile, Chicago. Produced by the National Council of Legislators From Gaming States. For more information, visit NCLGS.org. RESCHEDULED: September 22-23: ASEAN Gaming Summit 2020, Shangri La BGC, Manila. Produced by Asia Gaming Brief. For more information, visit aseangaming.com. October 5-8: Global Gaming Expo, Sands Expo Center, Las Vegas. Produced by American Gaming Association and Reed Exhibitions. For more information, visit GlobalGamingExpo.com. RESCHEDULED: October 26-27: East Coast Gaming Congress, Harrah’s Resort, Atlantic City. Produced by Spectrum Gaming, Cooper Levenson, the Friedmutter Group and Sysco. For more information, visit EastCoastGamingCongress.com. RESCHEDULED: November 4-6: 34th National Conference on Gambling Addiction and Responsible Gambling, Hyatt Regency Capitol Hill, Washington, D.C. Produced by the National Council on Problem Gambling. For more information, visit NCPGambling.org. November 9-11: Sports Betting USA & Investment Summit, New York City. Produced by Clarion Gaming. For more information, visit SportsBettingUSAConference.com. RESCHEDULED: December 1-3: Betting on Sports America, Meadowlands Exposition Center, East Rutherford, New Jersey. Produced by Sports Betting Community. For more information, visit SBCEvents.com. RESCHEDULED: December 1-3: G2E Asia 2020, Venetian Macao. Produced by Reed Exhibitions and the American Gaming Association. For more information, visit G2EAsiaMacau.com.

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AMERICAN GAMING ASSOCIATION

Goodbye to Cash Casino players want a way to utilize digital, contactless payment options when gambling By Jonathan Michaels

s casinos reopen across the country, the Covid-19 pandemic has required operators and suppliers to reimagine all aspects of our business to promote public health and build guest and employee confidence ahead of their return. These safety protections will likely look different in Oklahoma than in Las Vegas, and Lake Charles will look different from Southern California. Guests might experience mandatory mask-wearing, infrared heat scanners to monitor temperatures, and partitions to promote social distancing. New approaches that promote health and safety should also extend to how guests pay on the casino floor. Unlike much of the resort experience, where contactless technologies can be introduced seamlessly, customers are limited to cash on the casino floor, at a time when choice is increasingly expected. According to research by the American Gaming Association from May, almost 60 percent of past-year casino-goers are less likely to use cash in their everyday lives because of the Covid-19 pandemic. This translates to customer preferences on the casino floor. Fifty-four percent of customers indicate that they would be very likely to utilize a digital or contactless payment option when they gamble. The majority (57 percent) also say having the option to use a digital or contactless payment option on the casino floor is important to them. Casinos remain one of the most cash-intensive businesses in the world, so the modernization of payments for casino gambling is one of the AGA’s top priorities. Not only does modernization bolster regulatory efforts and responsible gaming measures, it also gives customers the choice they expect in their daily lives—choice that is especially important in today’s environment. Over the last 18 months, the AGA has

Global Gaming Business JULY 2020

engaged in a collaborative process to understand the current state of payments and formulate a framework for introducing payment options on the casino floor. Our paymentsmodernization working group—made up of commercial and tribal operators and suppliers—has heard directly from customers, worked with regulators and policymakers, held open dialogues with responsible gaming and problem gambling advocates, and brought card networks

54%

Fifty-four percent of customers indicate that they would be very likely to utilize a digital or contactless payment option when they gamble. and payment processors to the table. The culmination of this process is the AGA’s Principles for Casino Gaming Payment Modernization, released in June. It outlines seven key mandates: • Equip customers with more tools to wager responsibly • Ensure state laws enable a flexible regulatory approach, capable of keeping pace with evolving forms of digital payments • Give customers payment choice and convenience • Address heightened customer public health concerns • Provide customers confidence in digital payment security

• Create a uniform regulatory environment for casino operators, suppliers and regulators • Empower law enforcement to better identify offenders through digital payment analysis Every gaming jurisdiction will implement payment modernization differently. It could range from card services—already available in some states—to smartphone apps that can be used to purchase gaming chips or credits. Payment choice doesn’t mean the elimination of cash, as many patrons enjoy that as part of their gambling experience. Giving our guests choice in how they pay won’t just enhance their experience. With today’s technology, we can empower consumers with the tools they need to set budgets, time limits and other safeguards that promote responsible gaming. The AGA and our members are committed to working with all stakeholders to roll out payment modernization in a thoughtful way that puts responsibility at the forefront. Digital payments also create a record that can track money movements far more accurately and quickly than cash, providing law enforcement and regulators new tools to identify illegal activity like fraud. And, working with regulators, digital transactions can enhance the robust anti-money laundering and Know Your Customer activities already under way at every casino in America. By working in close coordination with gaming regulators, the financial services industry, responsible gaming stakeholders and the industry, the AGA seeks to pave the way for innovation that can bring casino payment options into the 21st century. Read the AGA’s Principles for Casino Gaming Payment Modernization on AmericanGaming.org.

Jonathan Michaels is vice president, strategic alliances for the American Gaming Association.

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FANTINI’S FINANCE

Riding the Roller Coaster It’s been a wild couple of months for gaming stocks. Don’t expect it to end anytime soon. By Frank Fantini

his year will go down in history as the Year of the Pandemic. For the stock market, 2020 might be remembered as the Year of the Roller Coaster—from the great March collapse, when much of America was shut down, to manicdepressive April and May when stocks swooned and soared each day on the latest Covid-19 news, to the raging bull of June, which is stampeding upwards as these words are being typed. The numbers are stunning. Penn National is a prime example. PENN is trading at $37 at this moment—that’s up from a March 18 low of $3.75, which had collapsed from $39.18 just one month earlier. Put another way, an investor who bought PENN stock in mid-February lost more than 90 percent of her money in a month. An investor who bought PENN stock in mid-March earned a return of 1,000 percent by early June. When has that ever happened before? PENN is an extreme example, but it’s not atypical. A similar ride has been taken by the stocks of all the brick-and-mortar casino operators and the slot and gaming technology companies that supply them. The questions are why this is happening and what it says about the future. As always, there are divergent views, from the V-shaped recovery seen by bulls, to those who fear that stocks have bounced back too far and too fast without the underlying economic strength to sustain their heady valuations. Plausible cases can be made for both arguments, and all those in-between, as is almost always true. The V case says, in fact, that the underlying economy is strong. The record-setting economy of early 2020 was artificially halted by a government shutdown intended to meet an exogenous event—a health crisis. In response, policymakers acted fast. The

Global Gaming Business JULY 2020

Fed flooded the economy with liquidity, assuring that financial markets would function and banks would lend to companies, giving them lifelines. The president and Congress rushed money to consumers and small businesses to hold them over. Companies, whether voluntarily or pressured by governments, aided their clients, ranging from rent holidays to waiving debt covenants. And now, the bulls say, companies are ready to pick up where they left off. We had a timeout, not a recession. But there’s also reason for caution, to think stocks might have gotten ahead of themselves and will sink to levels commensurate with the underlying economy, which might not be as strong as the bulls believe, perhaps blithely. Superficially and anecdotally, the bull argument has been bolstered by the enthusiasm of casino customers reentering newly opened properties. And yet, half-full casinos are not the platform on which prosperity is built, or so it would seem. Interestingly, Deutsche Bank chief gaming analyst Carlo Santarelli has published a research note in which he suggests Covid-19 will bring a transformational reduction in the expense base of the casino industry. Investors are forecasting financial performance of casino operators on an outdated understanding, and are thus underestimating the potential growth in margins, Santarelli said. Santarelli examined the history of previous downturns compared to his current analysis as he looked at the future of Eldorado Resorts, now acquiring Caesars Entertainment. Using his new assumptions, Santarelli sees the base EBITDA margin of 28 percent growing to 40 percent on a 30 percent revenue decline. Eldorado stocks will be extremely sensitive to EBITDAR changes, with every 10 percent change in 2022 adjusted EBITDAR worth $16

a share and every turn of enterprise value-toEBITDAR worth $20. And, one should think, what’s true for Eldorado is generally true for other regional casino operators. Of course, even if there’s a new expense paradigm, casinos will need true economic revival to sustain growth. The recent bouncebacks in employment and reports that next year’s convention bookings in Las Vegas are ahead of 2019 are encouraging. One place to look for investment opportunities is in the permanent changes that come out of a crisis. In the case of Covid-19, remote gambling has been a winner with the accompanying expectation that many American states will legalize sports betting and online gaming. That should be good news for companies ranging from Flutter to DraftKings, from Penn National to Eldorado, and the technology providers such as GAN and others, many listed in the U.K. and Sweden. Products to help avoid infectious disease may comprise another area of permanent change. “Contactless” may become more than a buzzword. That could benefit companies with contactless products, ranging from Everi and Scientific Games on the casino floors to hotel software providers. Of course, there are risks. Will there be a second wave of Covid-19, and will it be worse than the first? Will all the money pumped into the economy echo back in the form of inflation and its nearly forgotten costs of erosion of household wealth, then to recession in efforts to wring it out of the economic system? There’s an old expression that stocks climb a wall of worry. Perhaps that’s where we are today. Frank Fantini is the editor and publisher of Fantini’s Gaming Report. For a free 30-day trial subscription email subscriptions@fantiniresearch.com.

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AGEMupdate AGEM MEMBER PROFILE

Fi Holdings, the parent company of Southfi, is a

design-led organization comprised of companies that are best-in-class in their areas of expertise. Its collective includes some of the most industry-recognized names and talents, joining forces to provide invaluable innovation combined with fast, cost-effective and quality manufacturing services. With more than 115 years of quality manufacturing experience, its reputation and extensive database of knowledge allows Fi to serve various industries that include: â&#x20AC;˘ Medical â&#x20AC;˘ Gaming â&#x20AC;˘ Military and defense â&#x20AC;˘ Aerospace â&#x20AC;˘ Commercial State-of-the-art manufacturing facilities provide extensive and wide-ranging capabilities which include but are limited to: â&#x20AC;˘ Precision sheet metal fabrication â&#x20AC;˘ Custom plastic fabrication (RIM, injection molding, thermoforming) â&#x20AC;˘ Precision CNC machining â&#x20AC;˘ Design â&#x20AC;˘ Prototyping (+3D Printing) â&#x20AC;˘ Engineering support (DFM, CAD, 2D, BOM structure) â&#x20AC;˘ Vertical integration (Level 1 - Level 5) Fi Holdings is always looking to expand on its manufacturing capabilities based on the needs of its strategic partners. In 2020, Fi is increasing its 3D printing capabilities to expand the rapid prototyping demanded by its customers. Fi recently expanded capabilities and capacity to help its partners manage the increasing demand in the medical industry during the Covid-19 pandemic. For more information, visit fi.holdings. AGEM is an international trade association representing manufacturers of electronic gaming devices, systems, lotteries and components for the gaming industry. The association works to further the interests of gaming equipment manufacturers throughout the world. Through political action, trade show partnerships, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. Together, AGEM and its member organizations have assisted regulatory commissions and participated in the legislative process to solve problems and create a positive business environment. 14

Global Gaming Business JULY 2020

AGEM Board of Directors Actions for June 2020 â&#x20AC;˘ Greg Lee, chairman and CEO of Eureka Casinos, the resort hotel company he built with his parents Ted and Doris Lee, recently announced the creation of the Lee School Prize for Innovation and Entrepreneurship, a joint collaboration with the Lee Business School at the University of Nevada, Las Vegas. With a total pledge of $1 million, the initiative sees multiple prizes being awarded that will speed entrepreneurs in the development of innovations necessary to rapidly address the urgent problems facing the hospitality, entertainment or travel industries resulting from Covid-19. Prize winners will use the awards to develop and bring their concepts to an investor marketplace made up of leading corporations, private equity firms and angel investors. To assure a quick outcome, products and solutions must be brought to market within 12 months. Worldwide submissions are open to individuals or companies until July 5. For more information, visit LeePrize.com. â&#x20AC;˘ Joe Bertolone, executive director of the UNLV International Center for Gaming Regulation, recently sent out an update detailing the ICGRâ&#x20AC;&#x2122;s mission to continue to educate regulators even during the pandemic. AGEM has a very good working relationship with the center, having been heavily involved since its inception. In his update, Bertolone noted, â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re educating the industry about regulatory mattersâ&#x20AC;&#x201D;both technical and operationalâ&#x20AC;&#x201D;with our in-depth, multi-day focus and industry practitioners. This supports the natural evolution of the centerâ&#x20AC;&#x2122;s purpose and need to expand. All of our educational offerings are now delivered online including the ICGR Regulator Roundtable meetings and our custom training programs. This will allow us to reach a broader audience and allow much more flexibility.â&#x20AC;? â&#x20AC;˘ The NevadaWorksTogether.com website was recently launched to give gaming employees who have been furloughed or laid off access to jobs in other Nevada businesses and industries. Organizers of this worthwhile project are also currently working on potential funding for training courses that individuals may need prior to moving into other sectors. The service is providing a much-needed resource in Nevada at this difficult time. â&#x20AC;˘ A recent development with the Nevada Gaming Control Board (GCB) has seen Chairwoman Sandra Douglass Morgan delegate GCB member Phil Katsaros to oversee the Technology Division and its lab. AGEM Executive Director Marcus Prater and Katsaros recently discussed general industry issues, and itâ&#x20AC;&#x2122;s clear Katsarosâ&#x20AC;&#x2122; supplier industry background will serve him well in this new role. â&#x20AC;˘ Omron, based in Kyoto, Japan, was voted in as a new AGEM Associate member at the June board meet ing. The company has been a leading manufacturer and provider of advanced electronic components for more than 80 years and is committed to new products and solutions to promote safe gaming practices in the industry. This takes AGEMâ&#x20AC;&#x2122;s global membership to 181 companies, an all-time high.

Forthcoming Events Most events and trade shows around the world have been postponed or canceled due to the pandemic. However, the National Conference on Problem Gambling, of which AGEM is a major sponsor, has been scheduled as a Digital Symposium to be held July 20-23. The main in-person conference has now been pushed back and is now planned for November 4-6 in Washington, D.C.

AGEMindex

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The AGEM Index increased by 26.84 points in May 2020 to 402.89 points, a 7.1 percent gain from April. Ten of the 13 AGEM Index companies reported stock price increases as global markets continued to rebound 9766) per from the Covid-19 pandemic. The stock price for Konami Corp. (TYO: increased by 11.2 AGEM Games (SGMS) cent, accounting for a 7.95-point improvement in the Index, while Scientific Corp. experienced a 24.7 percent stock price jump that led to an index contribution of 5.87 points. All three major U.S. stock indices increased as the Dow Jones Industrial Average and the S&P 500 grew by 4.3 per cent and 4.5 percent, respectively. The NASDAQ also experienced a gain of 6.8 percent.

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p. 16 marketing.julia:Layout 1 6/16/20 2:36 PM Page 16

Casino Marketing— Art or Science? The first Casino Marketing Monitor study examines job performance, job satisfaction and marketing challenges By Julia Carcamo

hen I started my adventures on the vendor side of the casino marketing equation, I often found myself trying to describe a typical day to other business owners trying to get

in the door. The truth is, there’s nothing standard about a day in casino marketing. Our days are influenced by fellow department members, bosses, little old ladies out for a day of value and fun and high-touch VIPs—sometimes all at once. We work crazy hours, and sometimes those hours may find us in a costume. But I wouldn’t trade my time in this industry for anything in the world. I decided someone should mirror the “Casino Gaming Executive Satisfaction” study, by Bristol Associates Inc. and Spectrum Gaming Group, but with a specific focus on casino marketers. I kept this on my wish list, and then mentioned it to Mary Loftness of Profitable Customers and Michael Meczka of MMRC, Inc.—both experts in the industry. Along with our ongoing businesses, all of us are deeply involved in training and educating the casino marketers of today and the future. We pooled our contacts, dug for a few more and sent an extensive survey to a wide swath of casino executives to create a baseline for future studies and deeper cross-tabulation. The result is the Casino Marketing Monitor, born of a desire to examine the casino marketing environment across all gambling enterprises in the United States. At this point, we can only guess at the impact the Covid-19 pandemic will make on Year 2 responses.

Life as a Casino Marketer Casino marketing is a team sport. A majority of respondents (58 percent) informed us they have six or more direct reports, with another 34 percent having one to five. Marketing executives balance responsibility for the development of their teams while working closely with the highest decisionmakers to grow revenue. And, like the vast majority of full-time employees in the U.S, they look for ways to find a seemingly elusive work-life balance.

Global Gaming Business JULY 2020

As a casino marketer, I always thrived on the fun we had working together and hitting our goals. Our baseline responses showed I was never alone. A whopping 83 percent of those surveyed pointed to their contribution to the property’s success as the No. 1 driver of job satisfaction, with the fun environment coming in second (60 percent) and salary a distant third. As referenced previously, the Casino Gaming Executive Satisfaction report has become a benchmark for the U.S. gaming industry. It’s interesting to note that, of the eight choices given to respondents in that study, opportunity and growth were prioritized. Compensation placed second, with culture third. However, while Monitor respondents place salary and growth as lower factors in satisfaction, they still play a significant role in dissatisfaction. DRIVERS OF JOB SATISFACTION

Eighty percent of respondents reported being somewhat to extremely satisfied with their work, despite working many hours. Twenty percent reported working 44 hours or less a week; the extended work week comes as no surprise, as respondents report some level of participation in nearly all aspects of marketing. Unsurprisingly, when asked to provide the single most significant challenge, respondents said growing revenue, followed at a distant second by developing their teams.

p. 16 marketing.julia:Layout 1 6/16/20 2:36 PM Page 17

MOST SIGNIFICANT CHALLENGES KEY DATA ANALYTICS OR DECISION SUPPORT TOOLS USED

Areas of Responsibility

PERCEIVED QUALITY OF TOOLS IN USE

As of this writing, nearly half of U.S. casinos have reopened. The casino marketers associated with these openings have already started to experience shifts in their reliance on specific tools. What follows is a mix of what was learned from the study and what we’re seeing as the future of the casino marketing toolbox, in order of the currently unfolding priority.

Database Marketing It’s often said that the battle for the casino customer is fought and won or lost in the mailbox. Nowhere is this key battleground more important than in regional markets, where only a very few continue to benefit from monopolies. Although optional market share answers were only provided by about half of respondents, we clearly see that 85 percent are competing in the mailbox for that precious local business. Sixty-nine percent of respondents see more than half of the casino’s revenue from locals. Only a small minority have what was once considered a monopoly (8 percent) or duopoly (6 percent). Half of the respondents reported they share the market with two to four competitors within an hour’s drive. Thirty-six percent battle for market HOW WE COMMUNICATE share with five or more competitors. As many databases in the hospitality industry migrate to digital, the casino industry continues to see its most significant returns from dear old snail mail, but growing use of email. The database continues to be the primary channel that we use to create visits, and we’re using it AVG NUMBER OF MONTHLY pretty regularly. SixtyPLAYER OUTREACHES one percent are sending a high-value player more than six messages a month. Forty-four percent of mid-value range players are getting more than six.

Analytics and Key Metrics This dependence on mail and reinvestment makes it essential that marketers have access to critical metrics and the tools to assist them in making decisions that will drive revenue at an appropriate investment. The casino industry has seen a veritable explosion of third-party tools to assist them in this process. Respondents are confident in their access to key metrics and the analysis of drivers of the business, utilizing tools ranging from third-party tools to in-house data warehouses and desktop tools. It’s interesting to note that, while the majority of respondents use third-party tools to gain insights into key metrics, properties using in-house and desktop tools (Excel, Access, SQL, Tableau) rate the quality of the information at a consistently higher level.

Player Development Person-to-person contact with the most valued players has been a long tradition in the industry, and shows no signs of being replaced. Most respondents reported six or more employees with that responsibility. While the median number of players for each host ranges from 151 to 400, the majority are responsible for building personal relationships with up to 800 guests. PLAYERS PER HOST

JULY 2020 www.ggbmagazine.com

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Advertising The majority of respondents (77 percent) were involved in or had a responsibility for advertising of the property. Although respondents expected budgets would remain flat or grow, very few planned cuts for 2020. Now we know that, because of the closures prompted by the Covid-19 pandemic, many of our expectations for both revenue and expenses have been revised. We will have a clearer picture of the impact in the 2020 version of the Monitor report. Additionally, although 2019 advertising budgets were spread over all media forms, the change in communications channels brought on by the pandemic should likewise be reflected in revised budget allocations. Of interest is that while some industry pundits continue to look to millennials as a prime target audience, often advising a change in message and strategy, a large majority of respondents have not chosen to INHOUSE RESOURCING view their messaging and marketing in terms of audience age. Creative design and online work continued to migrate in-house, further adding to the workload we see in the number of hours worked per week.

Entertainment, Promotions and Events As we begin to return to our operations, a few marketing tools have been put on hold for the time being: entertainment, promotions and events. Entertainment has been a standard casino offering since the days of Elvis and the Rat Pack. As regional markets developed their offerings, the ability to provide headline entertainment became a must. In 2018, respondent properties hosted ticketed shows at a nearly monthly rate, if not more often. Marketers were generally on pace to increase this frequency in 2019 and to carry the pace into 2020. Today, we’re restricted in capacity and encouraged to stay a safe distance—two things that will surely dampen the energy of concerts. While smaller draws may still be a possibility, they won’t have as great an impact on the customer experience or profitability, as comps to high-worth guests have traditionally been a significant part of the attendee equation. Eighty-four percent of respondents saw promotions as essential to meeting revenue as well as creating energy on the gaming floor. While properties have seemingly found a thriving calendar of events, marketers are now faced with the challenge of meeting these expectations in ways that don’t draw crowds, are touch-free and are still ARE PROMOTIONS CRITICAL engaging. TO MEETING REVENUE? The good news is, we know what prizes gaming patrons are looking for— prizes that keep them in play, rather than bigticket items. Ninety percent of promotions are under $50,000—not lifechanging prizes. Promotional awards are being 18

Global Gaming Business JULY 2020

MOST IMPACTFUL PROGRAMS

spread over multiple winners. Seventy-eight percent of impactful promotions are based on player value and delivered one to one. The challenge today is not the development of promotional ideas. The community of casino marketers loves to share best practices through platforms such as trade shows and conferences, our Casino Marketing Masters Facebook group and spotlight events like the annual Romero Awards. Additionally, casino promotion vendors have been quick to adapt existing programs into touchless and touch-free options.

Knowledge Enhancement As mentioned earlier, after growing revenue, casino marketers view staff development as the second most significant challenge they face. As a lifelong student of marketing, this was one of the areas I was most interested in, because while I love to attend and participate in many casino marketing gatherings, it’s that moment when a marketer clicks with a concept or idea that makes the effort worth it in so many ways. The opportunity to provide relevant, accessible training is what we noticed when we created Casino Marketing Boot Camp, and it’s why we continue to develop programs to enhance marketer skills and ready them for advancement. With most training coming through self-service options such as books, webinars and newsletters, only 11 percent give high marks to the training currently available. Considering the challenges respondents have identified, training programs and options need to help them grow revenue and develop their staffs. The pandemic has forced many in-person opportunities to reschedule or cancel, but we must not lose sight of the need to create great marketers.

A Look at the Future Casino Marketing Monitor remains committed to the development of an accurate portrait of casino marketing in the U.S. The next survey will be out in the fall, and I expect that we’ll see quite a different picture in terms of the reliance on certain tools. Still, the goals of growing revenue and developing staff will continue to be of significant importance to us as individual marketers and as an industry. Visit casinomarketingmonitor.com to download a copy of the topline report of the inaugural study and to add your name to the 2020 survey pool. Julia Carcamo is the founder and president of J Carcamo & Associates, a marketing consultancy for the casino industry with decades of executive-level operational experience. For more information, visit jcarcamoassociates.com.

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CASHOUT

That dirty, grimy currency that’s gobbled up by bill acceptors on the slot machines or paddles that cram it into a cash box on the table games may become a thing of the past, thanks largely to the coronavirus pandemic

BY ROGER GROS

ash. We’ve all seen piles of bills making up millions of dollars won by the No Limit Texas Hold ‘em champion at the World Series of Poker. Or the giant cube of cash—a million bucks—once on display at Binion’s Horseshoe in Downtown Las Vegas. Those are the things dreams are made of in gambling establishments. Until now. Cash has rapidly deteriorated as a status symbol. When you can spend, deposit and collect everything on a mobile device, the actual physicality of cash becomes secondary. Except inside a casino. Unless you’re a semi-high roller who utilizes markers, cash is still the principal way to play inside a casino. Those bill acceptors on the slot machines are the first stop. Which means, of course, you have to carry your bankroll in cash, making you susceptible to loss or theft. On your exit from the casino, it’s the same thing in reverse, but a little riskier. Because who knows who spotted your hand pay or cage payout in the event of a lucky win? And now add germs, which ride along with each bill. In this era of Covid-19, when some people wipe down the packages they buy at the supermarket, cash is a space shuttle for dangerous germs and viruses. Experts estimate germs can survive on the surface of money for more than 36 hours. So why take the chance? You can buy takeaway food with contactless ease. You can have items delivered curbside without whipping out your wallet. So why hasn’t the casino industry kept pace and found a solution that will end this potentially dangerous situation? Well the good news is, it has. There’s no longer any need to play with cash or be exposed to all the dangers that go along with it. Why haven’t you seen it? Well, get ready. The coronavirus may be the catalyst to make it arrive sooner rather than later.

How Long? Cashless transactions have been the goal of many operators over the past few years. Christopher Justice, CEO of 20

Global Gaming Business JULY 2020

Global Payments, says it will still take some convincing before cashless systems become the norm. “Covid-19 has created a public health mandate to touch as little as possible, and emphasizes contactless—or cashless—payments,” he explains. “These payment channels help safeguard both customer and merchant from the virus through reduced or eliminated interpersonal contact.” However, he adds, there are other considerations before a customer or casino will fully accept a new means of payment. “Contactless payments will most likely not be a rule, given that it’s up to each jurisdiction’s regulations as well as the casino operator to decide what’s best for them. Two-thirds of consumers have shifted to self-service in order to maintain social distance, and 30 percent leverage contactless forms of payment.” For Omer Sattar, vice president and co-founder of Sightline Payments, the timing couldn’t be better for payment innovations. “The industry has been talking about it for a long time, and we’ve all felt that this was coming,” he says. “Needless to say, the American Gaming Association, under the leadership of Bill Miller and a number of the larger operators, started working on this about 18 months ago. Covid-19 seems to be accelerating that pace.” Because of that preparation, the industry isn’t starting from scratch. “Gaming is now in a position where I think we will start seeing a transition take place,” Sattar says. “Sometime during the course of this year, you will see operators, both commercial and tribal in multiple jurisdictions,

“The steep increase in those trends indicates that consumers prefer using a smart device to electronically manage their financial affairs. Early adopters of technology that match consumer commerce expectations will get a disproportionate share of total spend.” — Christopher Justice, CEO, Global Payments

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“I would expect regulators to be cautious as they look at new technologies coming into the casino space. This is a once-in-alifetime event. I’ve certainly never seen anything as devastating as this pandemic has been to the gaming industry. But hopefully it will spur changes that will keep players and employees safe.” —Mike Rumbolz, President and CEO, Everi

where the patron is doing all the connectivity through their own device, on their mobile phone, connecting both into slot devices and table games. So definitely there is some positive movement taking place.” Justice agrees that the movement toward cashless transactions was already getting traction when the virus made it imperative. “Consumer payment trends toward mobile and contactless were already indicating an overwhelming need to modernize. The steep increase in those trends indicates that consumers prefer using a smart device to electronically manage their financial affairs. Early adopters of technology that match consumer commerce expectations will get a disproportionate share of total spend,” he says. Ryan Reddy, vice president of systems and payment products for IGT, agrees the Covid-19 crisis has accelerated the interest of casinos in cashless transactions. “Up until now, it was a push from the suppliers to the operators and then on to the consumers,” he says. “They weren’t really asking for this, at least not dramatically, in mass numbers. And now we’re seeing that consumers care about this, and this is something important to them, and something they might make their playing decisions based on: Do I go to casino X or casino Y if Y offers me contactless transactions and X doesn’t?” Mike Rumbolz, president and CEO of payment giant Everi, says it’s taken many years to finally get the casino industry ready for cashless transactions. “I first started looking at cashless solutions back in 2005,” he says. “So here we are, 15 years later, and it’s taken a pandemic to really get everybody interested in the benefits and how we get this implemented into casinos. But even that far back, it was pretty clear to those of us involved in the fintech portion of gaming that removing as much as possible the last vestiges of cash from the floor would be of great benefit to casinos.” Even with the added impetus of Covid-19 and the desire for contactless payments, Reddy says it will take a long time before a fully cashless casino can be implemented. “Today, we have a full spectrum of payment options,” he says. “At the top, you have the most amount of contact and at the bottom, you have the least. Probably the most critical portion of payments is having contact with the environment. “We see it as sort of three different phases along that spectrum. The first is carded cashless, which has been around for quite some time. The player has a wagering account, but that account is still connected to the physical player card. So you have less interaction with cash than you would in today’s world, but it’s not dramatically reduced. “In the second phase, cardless cashless, instead of having a physical player card, you’ve got a virtual player card. So it’s basically on your mobile. You’re reducing the need to touch the card itself, but you’re still touching cash in lim-

ited interactions at the machine or at the cage in order to deposit and withdraw. And then in the third, which we call IGTPay, the player exclusively uses his mobile. So you get the virtual player card in your mobile, and you’re transferring cash from a variety of sources without touching any cash.”

TITO-Type Troubles Rumbolz says up until now, operators were somewhat reluctant to go full steam into cashless transactions because they still saw a certain utility to cash. “Cash can be used anywhere in the casino,” he says. “Unlike a ticket, which really only goes back into the slot machines and kiosks to redeem, cash can actually go to a table game or a restaurant or a shop, and then also to the front desk of the hotel. So there really is a ubiquity about the use of cash in gaming, especially in a resort environment.” Comparing cashless payments to the ticket-in, ticket-out phenomenon of a decade or more ago, Rumbolz doesn’t believe operators will be as forceful when moving players to cashless transactions. “Ticket in, ticket out was of tremendous value to a casino operator,” he explains. “Even though it was rejected roundly by customers and only taken up very slowly by certain operators, once they realized that they could remove that amount of change from a casino floor, that their hard count room would be virtually useless and they could convert it to a restaurant, and their soft count even would become easier to deal with, they got on board. “They virtually forced the patron, because the patron had no other choice. In most cases, they took the coin acceptors off the slot machines.” He doesn’t think that will happen with cashless. “Casino operators are going to allow patrons to choose,” Rumbolz believes. “Depending on the public’s appetite for this, as well as the casino’s pressure to urge them to adopt these new cashless and contactless solutions, we should see something at least similar to the transition that we’ve seen with things such as ApplePay, GooglePay, Tap and Go and those kinds of products.” For now, however, Everi’s QuikTicket is enjoying a remarkable run, according to Rumbolz. Players can access one of the thousands of Everi kiosks in casinos across North America and deposit money from a debit card to a TITO ticket, then take that ticket to a slot machine or table and immediately be in action. Rumbolz says the acceptance from operators and players has been extraordinary, but he’s looking forward to the next step: a full integrated wallet solution, the CashClub Wallet, which will be available by the end of 2020. Reddy says TITO was so easy to use that its adaptation was simply a JULY 2020 www.ggbmagazine.com

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“We’re seeing that consumers care about this, and this is something important to them, and something they might make their playing decisions based on: Do I go to casino X or casino Y if Y offers me contactless transactions and X doesn’t?” —Ryan Reddy, Vice President of Systems and Payment Products, IGT

matter of time. It’s different with cashless transactions. “This one’s a little bit more complicated than TITO, because of the phone interaction,” he says. “That’s kind of the unknown variable there, which could be good or bad. Certainly my mom and dad are using ApplePay, but I don’t know if all players are going to adopt it as quickly.” Sattar’s Sightline Payments introduced its Play+ system several years ago, meeting with some success. But Sattar says it all starts with the casino’s players club card—the “loyalty” program. “To this loyalty account, you’ll tie what generically we call ‘stored value,’” he says. “All that means is a pre-funded account that might be housed with a financial institution or a casino. And in this pre-funded account, you have tied different ways of funding your account. It could be a credit card, a debit card or your bank account. But it also could be PayPal, Venmo or Zelle—all these different kinds of payment methodologies that we’re used to using. “The beauty of the pre-funded account is that it becomes the check and balance for the gaming regulator. That becomes the key control mechanism for the gaming regulatory body. That pre-funded account is now tied into the loyalty program, which is tied to the slot system. It’s tied by some mechanism to table games, where you can move money from that pre-funded account to table games, and any other system that the casino theoretically has, including retail and dining and nightlife and all of those different items. “So the consumer experience really becomes similar to Uber, but with the nuance of gaming. The consumer will be able to walk up to a slot machine, use the pre-funded account to pack a phone or card into that slot machine, and move money into the credit meter. Or walk up to a table, move money from that pre-funded account and purchase chips right at the table. Now you have completely eliminated cash from the ecosystem, unless, of course, the consumer really wants it, which we think most people are not going to want. And that’s what that experience looks like.”

Responsible Experience As a former regulator (he was chairman of the Nevada Gaming Control Board from 1985 to 1988), Rumbolz is familiar with regulators’ reluctance to allow players access to bank accounts, credit and debit cards and even ATMs on the casino floor. He understands that reluctance. “People often forget that one of the obligations of a regulator is to make sure the industry remains healthy,” says Rumbolz. “And the biggest difficulty for people on my side of the industry—the supply side—in regulatory jurisdictions throughout the U.S., whether they be commercial or tribal, is bringing technology within the casinos up to the same level as technology in general society. There are a lot of reasons for that. I completely understand 22

Global Gaming Business JULY 2020

IGT Cardless Connect technology enables loyalty program access and cashless transfer of funds through players' mobile devices

them. And I would expect regulators to be cautious as they look at new technologies coming into the casino space. This is a once-in-a-lifetime event. I’ve certainly never seen anything as devastating as this pandemic has been to the gaming industry. But hopefully it will spur changes that will keep players and employees safe.” Rumbolz says he’s pleasantly surprised with the approach of the Nevada Gaming Control Board, particularly Chairwoman Sharon Douglass Morgan, who told GGB last month, “I’ve been actually pretty vocal in my support of trying to find a way to modernize wagering and finding ways to implement cashless payments. During this time, there has been some progress in finding ways to mitigate contact with payments, whether they be for retail or for gaming, and so we will definitely work with the technology division on that, and the manufacturers and those operators who want to explore that. “But even before the Covid pandemic, it was definitely something that was being discussed. Of course, responsible gaming being part of that conversation is also important, and depending on who you talk to, there could be ways to install alerts on people’s phones or through their banks about responsible spending. So I’m definitely eager and willing to have those conversations with manufacturers and operators.” Reddy echoes Rumbolz’s admiration for Nevada regulators looking for cashless solutions. “They’ve been great to work with,” he says. “Immediately after this happened, we reached out to them, they reached out to us. We had great conversations in terms of what we were thinking. I’m sure they had similar conversations with other stakeholders, but the impressive thing was that we had this conversation right away.” Fears that cashless payments might increase problem gambling have largely been dismissed because of the transparency of the transactions.

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“Sometime during the course of this year, you will see … in both commercial and tribal in multiple jurisdictions, where the patron is doing all the connectivity through their own device, on their mobile phone, connecting that both into slot devices and the table games.” —Omer Sattar, Executive Vice President and Co-founder, Sightline Payments

Where most problem gamblers secret away money, moving it as cash from one location to another, a cashless transaction leaves footprints that are easily and quickly noted. Sattar says that while it’s easy to recognize a problem gambler, cashless transactions can actually encourage responsible gaming. “We actually think more needs to be done in this manner,” he says. “There are great, dedicated, smart and intelligent resources in our industry that are focused on it. Unfortunately, there are other resources that are not as focused on it as they should be. “There are lessons from financial services that we believe should be applied to responsible and problem gaming, especially in the digital ecosystem. I’ll give you one example. Whoever you bank with—Citibank, Wells Fargo, Bank of America or any others—they all have a banking mobile app. In that app, they now show you high-level visuals, a graph, a pie graph or another graphic that shows you where you spend your money. It can show you how much you spent for food or on travel or entertainment, and whether that was up or down from last month. That’s a very high-level visualization tool that I can see being useful in a responsible gaming context.” Rumbolz says Everi already has some tools in place, but also agrees more could be done. “For at least the last decade, we’ve had the ability to allow the players to set their own limits, whether it be at an ATM or a kiosk or now through a QuikTicket transaction,” he says. “And ultimately, if it’s going to be through a smartphone transaction, the player can set their own limit, and that limit will stay in place no matter how much they may have changed their mind after running through the money. “It allows them to budget, but more importantly, it can alert the individual, the operator or virtually anyone you choose to have it alert. Once the system’s in place, it will track every dollar that goes into gaming transactions, and that’s valuable for everybody.” Sattar says the AGA has been a driving force behind this technology. A few years ago, payment processing was largely an online gaming concern, since few credit card companies and banks would get involved with online deposits and withdrawals. But Sattar says it’s achieved critical mass. “There are really deep discussions taking place with large issuing banks, but also with the networks like Visa, MasterCard, Discover and American Express. And not just as an ancillary benefit of, ‘Hey, this is an online-only thing,’ or, ‘This is a sports betting-only thing.’ There is $250 billion worth of cash circulating in the U.S. gaming industry. How do we help?”

Global Gaming Business JULY 2020

Count On CountR

ong before the Covid-19 outbreak, CountR was at the leading edge of gaming payment technologies, including CashIO self-service payment kiosks, the TITA table micro-kiosk and other cash access products. The company, represented in U.S. markets by Phi Gaming, offers operators the technologies they need to integrate the latest payment mediums and a complementary suite of player services. CountR’s CashIO Platinum curved 32-inch display delivers an extended range of features, while its powerful platform connects to all types of cashless transactions, including e-wallets. It also delivers sophisticated player identification and club registration with ID reading to meet the most complex regulatory requirements. As omni-channel kiosks, CashIO smart terminals interface to multiple systems, redeeming casino TITO, sports betting, horse racing betting and other types of wagering tickets and wallet accounts from a single unit. Other major functionalities comprise cash access (ATM and POS), jackpots payment, bonusing, advertising, handling multi-currency and much more—simultaneously saving operators real estate and increasing accessibility by combining functionalities under one hood. CountR’s TITA suite is the industry’s only end-to-end payment solution for live games. With its new POS (debit card buy-in) feature, true TITO capability and the industry’s fastest integrated bulk bill validator, CountR anticipates TITA will offer benefits to many of the most prestigious properties in Las Vegas and around the globe, tribal and commercial. CountR products can be linked to CountR ART software, enabling comprehensive remote monitoring and management for full auditing and servicing purposes, boosting operational efficiencies. “Mobile and cashless technologies will continue to become more and more prominent,” says CountR CEO Rainer Seyer. “Our range of products fits into any gaming environment, and the expertise and local reach of our distribution partners ensure we can provide a great level of service.”

EVE_Loyalty_GGB_FullPg_061220.pdf

6/12/20

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Illegal Games

M O BO

Unregulated “skill games” get a lifeline thanks to the Covid-19 crisis By Frank Legato

Pace-O-Matic illegal games are still ack in February, the Ameribeing offered at gas stations and can Gaming Association and convenience stores across Pennsylvania the Association of Gaming Equipment Manufacturers joined to launch a campaign against the spread of unlicensed, unregulated “skill Missouri, where games” that the gaming industry, lawmak14,000 unregulat ed games operate ers and law enforcement officials have all considered to be essentially unlicensed, untaxed and illegal slot machines. The machines, which pay cash awards that their manufacturers and proponents One court decision in Pennsylvania held that POM machines were in say are earned through skill, consider methods like seeing one result and defact illegal slot machines, but since they were not operated by a licensee, ciding whether to wager again as a skill, in one example. Developed by a few they did not fall within the jurisdiction of the state Gaming Control well-financed manufacturers, they are placed in locations as diverse as convenBoard. It was a loophole seized upon by suppliers of the games, which conience stores, laundromats, truck stops and gas stations, and have been multitinued to spread. plying for the past few years. Estimates of up to 20,000 machines across Meanwhile, lobbyists gathered in state legislatures representing several Pennsylvania are not unusual for the states where these have appeared. stakeholders—the gaming industry in attempting to ban the machines, Following the initiative begun by the AGA and AGEM, opponents of the machine suppliers who say they welcome regulation for what they consider unregulated gaming machines had been gaining ground, with law enforcelegal games, and even machine operators, who, along with the suppliers, ment seizing machines in several states, and with manufacturers such as Georhave gotten used to big earnings on the untaxed machines. gia-based Pace-O-Matic (POM), which distributes games to several states, It was in state capitals that the movement to eliminate the machines and Missouri’s Torch Electronics embroiled in court battles over the legality seemed to gather steam, with Virginia lawmakers voting in March to of their games. ban the games there, where POM machines are branded “Queen of Virginia.” In Missouri, where 14,000 unregulated games operate, Torch Electronics was facing a criminal “I would suspect a skill-game bill would trial for illegal gambling, with a hearing date scheduled for be (difficult to pass). It depends on who April 23. In Wyoming, a state Senate bill to regulate and tax the machines died in committee. the characters are that set it up, how Then, the coronavirus hit, and state economies reeled as they present it, and exactly what they businesses of all types shut down. As the crisis continued, state officials had to deal with many of the unregulated are trying to make legal, to decide games continuing to operate while legitimate casinos, along whether they’re successful or not.” with other businesses, remained idle. Court cases were de—Wyoming Senate Vice President Ogden Driskill layed along with everything else.

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Covid Reprieve As states faced a financial crisis with little tax revenue and massive unemployment, some decided to throw the unregulated games a lifeline. In Virginia, Governor Ralph Northam initially proposed legalizing the games under a bill that allowed casino gaming but banned skill games. As a compromise, Northam sent the bill back to the Senate with an amendment that would allow the games to continue to operate for one year, with a tax of $1,200 per month, per machine paid to the state. The amendment and casino legislation cleared, by wide margins in both chambers of the legislature. Of more than $100 million in potential revenue from 7,000-plus machines, 84 percent will go to a statewide Covid-19 Relief Fund. Of the remainder, 12 percent will go to host cities and counties, and 2 percent each to a problem gambling fund and to the Virginia liquor control agency. As of now, after one year, the Queen of Virginia games will become illegal. Pace-O-Matic officials and their representatives are lobbying for a permanent regulated-and-taxed status for the games. Wyoming has moved this type of game closer to that status than anywhere. A bill sponsored by state Senate Vice President Ogden Driskill was signed into law that will have the effect of regulating and taxing the so-called skill games for 14 months. (Driskill was the only committee member to vote in favor of the prior bill to tax the games.) However, the Wyoming law goes further, creating a Wyoming Gaming Commission to oversee all commercial gaming in the state, including parimutuel racing. The law stipulates that POM games and others like them must be licensed and certified by a state-sponsored testing lab, and obtain a state sticker. “Under this law, any game that doesn’t have a sticker on it from the commission is automatically illegal,” Driskill says. The law stipulates that certification, and the sticker, will be granted only to machines that meet specific criteria. “The law dictates every parameter of the machine,” Driskill says. “How the reporting works, what games they can have, how they can have them, and so forth. It’s all under the purview of the Gaming Commission now. “There is no back-door route in Wyoming anymore. You’re going to have to go through the process to get it done.” For purported skill game manufacturers—there currently are three, including POM, which brands its games “Cowboy Skill” in Wyoming—the reprieve is temporary. “They are only legal for 14 months,” says Driskill. “Then, if no legislation is passed for skill games, they will be illegal in the state of Wyoming.” Driskill estimates the opinions among Wyoming lawmakers to be split on the issue. “The Gaming Commission bill was a very difficult bill to pass,” he says. “This was the fourth time it ran. I would suspect a skill-game bill would be the same. It depends on who the characters are that set it up, how they present it, and exactly what they are trying to make legal, to decide whether they’re successful or not.” The law is set up to encourage long-term regulation and taxation of the games. It essentially requires manufacturers and operators of “skill games” to play by the same rules as suppliers and route operators in regulated VLT jurisdictions. “There are three levels of licensing,” Driskill explains. “The machine manufacturer has to be licensed, the route (operator) has to be licensed, and the establishment has to be licensed. “And there’s a lot of backbone to the law. The penalties are very severe—it’s $10,000 per offense, for each location, each machine, for anyone who breaks the law. There’s very strong encouragement not to try to game the system.” Driskill says upwards of 1,000 games from the three suppliers have already made it through the licensing process. The 14-month law, of course, sets up a year of lobbying in the Wyoming legislature. Driskill says the Covid-19 crisis has boosted the chances of a new

“In Wyoming, we tried to stop the skill games. And really, there is very little regulation. You just have to pay a license fee, and lo and behold, you’re a distributed gaming operator for skill games in Wyoming.” —Sean Higgins, Executive Vice President of Government Affairs, Golden Entertainment skill-game bill clearing the legislature. “Before the Covid crisis, even with the budget crunch, I thought they’d have a pretty hard time passing the law. But the way I set the law up, local governments get all the returns from it. I’m guessing we’re going to have cities helping to lobby for the bill at this point.” The relief to strapped local budgets will be substantial. Under the 14month law, which authorizes up to four machines per location, operators will pay a fee of $2,500 per machine, per month to the state, in addition to a 20 percent tax paid weekly on the previous week’s proceedings. When contributions pass $1 million, the 20 percent tax will be divided between the state and local governments, with 45 percent going to local governments and the school foundation and 10 percent to fund the Gaming Commission. Another Wyoming stakeholder likely to be watching debate closely are the state’s Native American tribes, which operate four casinos under compact, offering both Class III and Class II games. According to Driskill, tribes formed some of the strongest opposition initially, but in the latest case, they fully supported the legislation. “They backed it fully,” he says. “I put a tribal member on the commission, and they were exceptionally supportive. Once they understood that what we were doing was not a major expansion of gambling but only to get a handle on what was already out there, they supported letting the people decide what they want to see as far as gaming in Wyoming.”

The VLT Lobby The other force likely to be lobbying for inclusion in any new Wyoming gaming legislation is the VLT industry, represented by the distributed-gaming route operators that currently supply games to markets such as Montana and Illinois, in addition to running gaming routes in Nevada. One such company involved in the Wyoming process is Golden Entertainment, one of the largest route operators in the U.S. with gaming routes in Nevada and Montana. Golden also is a casino operator, having acquired the Rocky Gap Casino Resort in western Maryland, as well as three Las Vegas casinos, including the Stratosphere, two in Pahrump, Nevada, one in Laughlin, Nevada and one in Colorado. Golden Entertainment has been involved in lobbying against unregulated gaming machines in several states, in addition to lobbying to expand its VLT footprint into new jurisdictions. “I’m out there in every emerging jurisdiction meeting with legislatures,” says Sean Higgins, executive vice president of government affairs for Golden Entertainment. Higgins says he was involved in the legislative campaigns both in Wyoming and Virginia, where the company’s lobbyists thought they had succeeded. “I hired the set of lobbyists (in Virginia) who actually got the skill-games ban passed,” Higgins says, “before the governor got cute—since he was a skill games fan, I guess—and put in this one-year extension to help pay for Covid.” In Virginia, Higgins says, Golden’s purpose was “to get distributed gaming JULY 2020 www.ggbmagazine.com

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Budget Busters Higgins says the budget crunch in the states resulting from Covid-19 will likely fuel efforts of unregulated-game manufacturers to secure legitimacy for the games. “The issue is that after operating for a number of years skewing the law—and arguing that they’re legal—they come to the legislature and say, just tax us a little bit, because we’re already here, and we can make the state money. That’s their M.O.” There are over 7,000 unregulated Queen of Virginia Higgins foresees Golden’s lobbyists continuing efforts gaming machines in bars and restaurants across that state in Pennsylvania and Missouri. “While we understand “In Missouri, we’re in the same place,” he says. with VGTs approved, or at least to get a ban on skill games “There are several court cases pending, but none of them the difficulty of stamping approved so we could take the next year and educate the leghas seen final adjudication. So games of skill continue to out unregulated gaming proliferate there as well.” islators and others in the state about VGTs.” Golden Entertainment lobbyists are now working in He also sees an uphill battle in working with state across the board, it’s states like Wyoming toward a new law next year, and in other legislatures in this year of severe budget shortfalls. important to continue states like Pennsylvania, where a skill-game ban stalled in the “The other problem becomes that you end up with legislature as the Covid-19 crisis took over. In Pennsylvania, fighting against its legislators who have some sympathy for these skill game Golden also has lobbied to pass a bill to legalize VGTs in bars operators because much like in Pennsylvania, they’re spread.” and taverns—left out of the 2017 gaming expansion law manufactured there,” Higgins says. “And so you’ve got a —Marcus Prater, Executive there, which approved them in truck stops only. senator and they’re manufactured in his home district. Director, Association of Gaming “We’re trying to pass either VGT or VLT legislation; You’re going to have some sympathy there.” Equipment Manufacturers we’re obviously trying to create regulated markets,” says HigPace-O-Matic officials did not respond to requests to gins, who notes that even the law in Wyoming—where comment for this article, but Higgins says they have an Golden was active in seeking a ban—does not clear up the advantage in the battle because of financial strength. problem. “The skill-game operators are trying to do whatever “In Virginia, if you look up Pace-O-Matic or Queen of they can to get themselves ‘regulated,’ so to speak. They were successful, on a temVirginia, you’ll see a list as long as my forearm of lobbyists they have there,” he porary basis, in Wyoming this year. If you read the legislation there, they can opsays. “Why? Because they make so much money they’ll do anything they can erate the skill games that were in place when the legislation passed, but next year, to keep their hand on that money. They do business as Pennsylvania Skill the legislature has to go back and take a look at all gaming.” Games in that state. They call themselves Cowboy Skill in Wyoming. They’re As the games’ manufacturers secure licensing in Wyoming, Higgins says he Queen of Virginia in Virginia. They always claim they’re a local company. feels the law is still providing a “back door” to authorize games that would be ille“And they make so much money, we may hire one or two lobbyists where gal in most jurisdictions, even with the testing requirement. they have eight or 10 lobbyists, or more. “In Wyoming, we tried to stop the skill games,” Higgins says. “And really, “We’re casino operators. This is a business that has been operating under there is very little regulation. You just have to pay a license fee, and lo and behold, the table, and even before there were skill games, there were gray-market you’re a distributed gaming operator for skill games in Wyoming. One of the games. What we want to do is bring it out in the light, make it legal and reguthings they did put in the bill was that you’d have to have a lab. But guess what? lated, and put product out there in which the public can have faith that they You can pick your own lab and give that lab’s name to the gaming commission. are what they say they are. That’s our business model, and we’ll continue to It’s like nothing I’ve ever seen or heard of before. So, we’re out here working to do push it.” a little education and hopefully roll that back in Wyoming as well.” Meanwhile, AGA and AGEM will continue their efforts to battle the proMeanwhile, the company continues its efforts along with the AGA and liferation of unlicensed games. AGEM to stop the spread of unregulated games in markets like Pennsylvania. “AGEM and the AGA announced in February our campaign to put a “As we look at it, they’re trying to come in through the back door, with games spotlight on the spread of unregulated gaming and initially focused on Pennwhich we say are illegal,” Higgins says. “They claim they have a loophole in the sylvania, Missouri and Virginia because the legislatures in all three states have law, and here’s the thing—any time you have a loophole, you can try to exploit been active in considering how to get rid of the scourge of unregulated gaming that loophole. And their loophole is, these are games of skill, not games of chance, growing in their states,” says Marcus Prater, executive director of AGEM. and therefore, they do not fall under gaming, or gambling. “We sent the AGEM-AGA Unregulated Gaming Machine Fact Sheet to “And then they insert themselves into small jurisdictions. I’ll use Beaver every legislator in each of those states and continue to monitor developments County, Pennsylvania as an example. They get a small court—the county court in there. We also have a plan to inform legislators in Wyoming as they debate the Beaver, which is the lowest court in the state—to agree that they’re a skill game. future of gaming there, and will be keeping an eye out for unscrupulous maAnd then they wave that court decision around to everyone to justify what they do. chine companies pushing their unregulated games in states grappling with the “And they make so much money, they can fight these court battles for years... pandemic and its aftermath. They’re making money hand over fist, because they pay no taxes, as long as they “While we understand the difficulty of stamping out unregulated gaming can get away with it. As long as no one calls them illegal, or no court gives them a across the board, it’s important to continue fighting against its spread. State final adjudication that they’re illegal, and no legislature passes laws that say they’re legislators and law enforcement owe it to their citizens and the regulated casiillegal—which they haven’t done in Pennsylvania in years—they continue to opnos and lotteries in each of their states to combat unregulated gaming and the erate. When you look at it, it’s an ingenuous business model.” machine companies that don’t create any benefits except for themselves.” 28

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RESPONSIBLE GAMING

Don’t Forget Responsible Gaming As Covid-19 protocols are put in place, let’s not look beyond the problem gambler

s the gaming industry begins the process of reopening, it’s easy to be hyper-focused on the changes that need to occur in both the physical gaming spaces and the policies designed to facilitate social distancing, monitoring and response to Covid-19. All are necessary to protect the health of team members, guests and the community, and provide an environment where returning patrons will feel both safe and entertained. It is equally critical to the mental health of team members, patrons and the community that adherence to strong responsible gaming standards not be neglected, especially now. Covid-19 introduced itself to the world in late 2019, and over the course of just a few months showed its capacity to wreak havoc not only on human health, but also on the ways in which people have had to reevaluate their social interactions, work environments and pursuit of leisure activities. The worldwide economic fallout has been extreme, with many divergent opinions from economists and pundits on how bad things really are, and prognostications about how bad it will get before things begin to turn around. Questions abound about how to time the reopening of various sectors of the economy. How soon is too soon when considering public health? How late is too late when considering economic health? The gaming industry is a microcosm of how these issues and more are playing out across the private sector. MGM Resorts and Wynn Resorts each proactively announced closure of their Nevada properties prior to Governor Steve Sisolak’s announcement requiring the entire industry to do so. Placing public and team member health above profits will undoubtedly put them in good stead with the majority of returning patrons and employees. Additionally, Wynn has been a leader in developing strategies to reconfigure the gaming space and policies to decrease the spread of Covid-19 among employees and guests. These

Global Gaming Business JULY 2020

By Ted Hartwell

policies have been touted by many in commercial and tribal gaming, and were reflected in policies approved by the Nevada Gaming Commission, charting the path properties must take to safely reopen. Although responsible gaming was absent from the first draft of the commission’s requirements for reopening, a number of public comments urged the commission to, at a minimum, include language recognizing the importance of reinforcing responsible gaming messaging.

How soon is too “ soon when considering public health? How late is too late when considering economic health? The gaming industry is a microcosm of how these issues and more are playing out across the private sector.

”

These comments were submitted from stakeholders across a wide spectrum, including current and former gaming executives, academia, treatment providers, prevention and awareness advocacy organizations and the recovery community. During a public workshop of the Gaming Control Board, Chairwoman Sandra Douglass Morgan announced that language on responsible gaming would indeed be included in the final language, which was ultimately released on May 27. While the added section on responsible gaming contains only two sentences, they are very important sentences indeed. They require licensees to reaffirm their commitment to responsible gaming measures as part of their formal reopening plans, which were submitted to

the commission for review and approval in advance of reopening. They read as follows: Responsible Gaming. Plans must include the licensee’s commitment to and implementation of responsible gaming measures. Licensees are encouraged to enhance their responsible gaming measures, including, without limitation, providing enhanced training to employees and creating specialized messaging for patrons. So, why should we care about responsible gaming as much or more now than before? And why is it important to consider implementation of enhanced training for employees and new measures and messaging for patrons? The answer is simple. The financial, emotional and psychological impacts brought about by isolation, trauma and financial or personal loss due to the events of the past several months are known risk factors for problem gambling and other addictive disorders. They create a dangerous cocktail for people who may be predisposed to problem gambling, and not cognitively equipped to make healthy decisions with regards to their personal gambling behaviors. This group includes not only people who may have begun to experience gambling problems or who were in early recovery prior to the pandemic, but also people who, because of personal experiences caused by the pandemic, are for the first time at higher risk for developing a gambling disorder. For the near term, perhaps even until a reliable vaccine has been developed and becomes widely available, the makeup of early returnees to the physical gaming space is likely to include a higher than usual percentage of individuals who are already suffering from a gambling disorder, and others who are suddenly at higher risk for developing a gambling problem specifically because of the Covid-19 pandemic. Additionally, studies show that casino team members may be at higher risk for developing a gambling disorder than the general public, and they will have experienced the same types of im-

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pacts to their lives as returning patrons, heightening that risk. Returning employees have many concerns about their own safety related to their risk of contracting and transmitting Covid-19 to their families or others, and these risks should be both addressed and mitigated to the extent possible. While responsible gaming practices may not be uppermost on team members’ minds at this time, reemphasizing the importance of maintaining these practices while reopening will give them a refresher course on the resources available to them and their colleagues who may develop a gambling problem. Team members who feel both safe and comfortable in their new environment will convey that feeling, both consciously and unconsciously, to the returning patrons. During the pandemic there has been a significant increase in the use of online gambling and gaming platforms worldwide. The increasing ability to enjoy wagering from the safety and privacy of one’s own home or hotel room is a way to socially isolate while still engaging in this form of entertainment. However, while these options provide additional means of mitigating the transmission of Covid-19, isolation is, in and of itself, a risk factor for developing a gambling disorder. Operators of purely online wagering sites as well as brick-and-mortar operators who offer the ability to wager online while in-house or in-state should be aware of the potential for increased problem gambling at this time and in the near future, and look for innovative ways to enhance messaging to these consumers in particular. Finally, as licensees work to recreate the gaming space and implement new measures to curb the spread of Covid-19, there is also the opportunity to explore innovative responsible gaming messaging and access to that messaging. As gaming environments transition to increasingly “touchless” and “cashless” operations, some traditional responsible gaming tools such as physical brochures, which may in and of themselves create an undesirable “high-touch” area may, at least in the near term, need to be replaced by touchless electronic messaging on the gaming floor and associated spaces. Additional important considerations are the inclusion of regular responsible gaming messaging and easily accessible tools in the apps on personal electronic devices that patrons use to participate in gaming on and off the floor and transfer personal funds into property accounts. The responsible gaming requirements and guidance offered by the gaming commission offer a framework to address these concerns in new and potentially more effective ways. Las Vegas’ major gaming properties have for 32

Global Gaming Business JULY 2020

many years exceeded Nevada’s state regulations on minimum responsible gaming standards, and most adhere to the principles outlined in the American Gaming Association’s Code of Conduct. Responsible gaming has long since transcended its early focus on regulatory requirements addressing those with problematic gambling behavior to include practices designed to prevent underage gambling, maintain responsible alcohol serving and consumption, and uphold a strong employee training ethic. In spite of great strides in the area of responsible gaming in recent years through introduction of its GameSense program to properties worldwide, MGM Resorts International recently took the surprising step of eliminating its director of responsible gaming position. In general, the elimination of middle-management positions, and even some upperlevel positions industrywide, comes as no surprise, as properties look for means to stem the bleeding caused by the financial impact caused by Covid-19 shutdowns. However, the elimination of responsible gaming positions sends exactly the wrong message, and at the worst possible time. Experts often talk about the need to avoid working in silos. I would argue that new policies on reconfiguration of the gaming spaces and new procedures to mitigate the potential spread of Covid-19 within those spaces are possibly best viewed through the lens of responsible gaming, which is ultimately all about creating an entertainment environment that is safe for both patrons and team members. This may be a radical idea, but these are radical times that require constant innovation and thinking outside the box as we continue to move forward into uncharted territory. Adherence to existing responsible gaming standards and exploration of potential enhanced messaging is more important than ever before. The commission’s inclusion of language requiring recommitment to responsible gaming practices and encouragement of innovation of these practices is a win not only for patrons, team members and the recovery community but also for the industry and the state of Nevada. It ensures that the great desire and need to have patrons back on the gaming floor will not overwhelm the commitment to responsible gaming practices designed to keep individuals at a healthy level of gambling, and facilitate connections to resources for those who are unable to do so. Ted Hartwell is a research scientist at the Desert Research Institute of the Nevada System of Higher Education in Las Vegas. He has consulted for years with the Nevada Council on Problem Gambling and the larger gaming industry in the areas of problem gambling and responsible gaming.

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Free to Play Driving fan engagement for tomorrow’s sports betting customer By Brendan Bussmann

NASCAR’s iRacing kept some fans busy during the total sports shutdown

s the sports arena fell silent due to the coronavirus, a host of new sports and games sparked the curiosity of sports fans and bettors, such as esports, Belarusian soccer, Russian ping pong, Taiwanese baseball, darts and more. However, the main professional leagues and other U.S. sports have moved to free-to-play (F2P) as a way to stay engaged with fans during this unprecedented and uncertain time. F2P is an opportunity for players to engage with games and products for fun or practice, sometimes in real time. F2P offers the same entertaining gameplay offering bonus rewards or prizes found in real-money games while allowing game producers, brands, and operators to cultivate new customers. F2P games have been offered for a number of years and are an important part of the gaming industry. They have been mostly a smaller part of an organization’s online gaming portfolio, but have seen a strong push as both a driver and an accessory to sports betting. Many of these games have already been used by sports or media companies as a way to further engage fans in the experience, mostly from outside the venue. However, few have figured out the secret sauce to take advantage of the fan engagement piece. Sports teams want to bring together fans both invenue and across the country in an effort to sell more merchandise and tickets, and generate further fan affinity for the game. Media companies and sponsors of sports want fans to watch more sports broadcasting and further understand the habits of viewers to drive them to a specific product or call to action.

Global Gaming Business JULY 2020

For sports betting operators, F2P can serve two purposes. The first is to build a database of potential sports bettors in a market where sports betting may not yet be legal, or has not yet launched. The previous daily fantasy sports operators were able to do this effectively by flipping a switch from one app into an official sports betting app in the markets where they were already operating. The second purpose is to educate those who are new to sports betting, to get them to understand how it works, and transition them into the new legal market. Some challenges have arisen with the second purpose, which is not always the best way to attract individuals who are interested in sports betting but feel overwhelmed by the traditional user interface. There are others who want a different experience but want to actively participate. Some operators have viewed F2P as simply checking a box, hoping it will give them some interaction that builds their brand and attracts a few more people to the process. The ones who are maximizing F2P are those who can engage fans so they keep returning.

The DIC Principle One of the keys to any gaming venture is data. The cliché that “data is king” holds true in sports betting, as in other forms of gaming and in the rewards programs that organizations have developed. However, this has not traditionally been the case with sports betting, which has not seen a tremendous amount of development in the U.S. until recently. With the virtual legal monopoly previously held by Nevada, there

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The next material impact to fan engagement will be a real-time F2P user experience that delivers predictive-play questions with context and controls the timing so that players—regardless of whether they are in-venue, on their couch, or streaming the game from somewhere else—can answer questions during breaks in the action.

was no necessity to build out the database because sports betting was, and still is, viewed as an added amenity to a casino. F2P now offers a solution for a sports betting operator, team, league, media company or other stakeholder to build up a database of interested players and get a treasure trove of information that can add to further engagement in the F2P or wagering worlds. In states that are looking toward legalization of sports betting, some operators have also started to use F2P as a lobbying tool to supplement a strong government affairs strategy. As the sports betting landscape continues to change, the ways fans interact with the various games that interest them will change as well. Fans are looking for innovation not only in the game, but how they interact with it. The old saying goes that innovation is the mother of invention. The same is true of the sports betting market of the future. Today’s bettors and those in the future are looking for innovation in their experience. F2P allows operators to test various methods and innovate the experience to see what resonates with sports fans who may want to bet, if they don’t already. Sometimes the fan is forgotten in the experience, and creating a conversation between the fan and the game through an F2P offering can ensure that the fan is kept in mind. Sports are about interaction, creating a conversation between fellow fans and opposing fans alike, and building that relationship between the fan, the team and the sport that they enjoy. By creating that dialogue, organizations can build further affinity for the game and keep the fans engaged at a higher level, whether they are in-venue, watching from the comfort of their own home, or sitting at a bar with other fans. All of this drives the “DIC” Principle—Data, Innovation and Conversation. Those teams, leagues, media companies, big brands and sports betting operators that can perfect these three key ingredients in the sports engagement experience will be able to differentiate themselves in the market. This will likely lead to further market share gains, because they will know their players best through the innovation experience and conversations they create. The underlying data is the roadmap on how to move forward and create a further advantage in understanding their customer through engagement.

Real-Time Gamification As of today, more than one-third of U.S. states are operational with legalized sports wagering, with more coming online or looking to legalize in the near term. The flavors run the gamut, ranging from brick-and-mortar only to a mobile wagering option, or a blend of the two. Some states require on-site registration and funding, while others allow full mobile functionality with the ability to fund from the player’s own fan cave (as long as that fan cave is in a state that allows it, like New Jersey or Pennsylvania). One consistent player acquisition strategy for gaming operators across the board is the release of F2P offerings in partnership with teams, leagues and media companies, enabling sportsbooks to cast a nationwide net, as games with no player consideration are legal in all 50 states. These games can range anywhere from FoxBet’s Fox Sports Super 6 to the NBC Sports Predictor App, NASCAR’s Finishline, the XFL’s PlayXFL or the NBA Pick’Em games in partnership with FanDuel and BetMGM. All these games make a similar ask of the fan—to answer a group of predictive questions prior to the game (or maybe at halftime) and gain a chance to win cash and prizes by prognosticating ahead of the field. Sports wagering pundits find that more than 70 percent of bets occur in-game. As such, it seems that the next material impact to fan engagement will be a real-time F2P user experience that delivers predictive-play questions with context and controls the timing so that players—regardless of whether they are in-venue, on their couch, or streaming the game from somewhere else—can answer questions during breaks in the action. Fans will want to feel they are interacting with live content and enjoying a game play experience that’s additive to their viewing experience. One of the only companies delivering on this experience today is FanBeat, a company that designed its product and user experience around fan engagement and education to attract, monetize and activate the fan experience through real-time player gamification.

Measuring Effectiveness and ROI The NBA historically has been at the leading edge of fan engagement, and this year’s All-Star Weekend showcased the league’s first foray into real-time F2P gamification with “NBA Pick ‘Em: All-Star Edition, presented by AT&T.” Starting with Friday night’s Rising Stars, fans were asked one to two predictive play JULY 2020 www.ggbmagazine.com

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The NBA is out front with fan engagement with products including NBA2K and Last 60

questions per commercial break. Players with the most points at the end of each night were awarded “money-can’t-buy” NBA experiences, such as welcoming a draft pick to the league at the 2020 NBA Draft in New York, or courtside seats to the 2021 NBA All-Star Game in Indianapolis. The execution by TNT’s broadcast team was a key ingredient to the fan experience, prompting fans to answer the live questions posed during each event. During All-Star Saturday Night, NBA on TNT lead announcer Ernie Johnson Jr. encouraged fans to pick the winner of the Taco Bell Skills Challenge after the semifinals were set. More than 18,000 fans made predictions, with the platform processing over 1,500 submissions per second. If real-time F2P can lead to fans consuming more of the action, it creates a groundswell of viewing so that ratings climb, enabling the media companies to charge a premium for their advertising and increasing the value of the next broadcast rights deal negotiated by the rightsholder. This type of integration between a league and its broadcast partner could be a preview of not only how real-time FTP could look in the future, but also how in-game sports betting could be provided to the fans as the partnerships between media companies and sportsbooks continue to consummate. With the current void of live sports, major league organizations like NASCAR and companies like Callaway are using F2P to drive further engagement with their base. Several weeks after the start of the Great Shutdown, NASCAR and broadcast partner Fox launched an effort to engage fans of their iRacing series, and has been filling the gap with the season on hold. This will hopefully transition well for them, as they appear to be one of the first major sports to restart. Callaway has also taken advantage of the pause by engaging with fans during what would have been Masters Week in early April. Callaway’s MAVRIK Majors Trivia Challenge saw a 25 percent increase in the number of responses from the first live question to the last, a testament to the stickiness of the user interface. F2P also allows operators to find a more reasonable acquisition cost per player. In a competitive market that has some operators providing several hundreds of dollars in promotional play, providing an F2P option early and continuously can bring in players at a much lower cost and build better affination with the player. Solid F2P options can come with a cost of acquisi36

Global Gaming Business JULY 2020

Sports betting in the United States is still in its infancy. This is not a onesize-fits-all market, because gaming regulation is done and should continue to be done at the state level, one of the many justifications in the repeal of the Professional and Amateur Sports Protection Act (PASPA). This creates a unique set of circumstances for operators, as not every jurisdiction will be the same.

tions below $10 a player in some cases. Those that do not have a robust program can be in the same neighborhood as the promotional play of several hundreds of dollars per player and should not be considered. Sports betting in the United States is still in its infancy. This is not a one-size-fits-all market, because gaming regulation is done and should continue to be done at the state level, one of the many justifications in the repeal of the Professional and Amateur Sports Protection Act (PASPA). This creates a unique set of circumstances for operators, as not every jurisdiction will be the same. One thing that can bridge all these markets is a strong F2P strategy to build data upon an existing sports betting database or create one in a new market to start building market share when the market eventually legalizes and launches. The key to this strategy is to drive it with a strong engine. This includes offering an engaging product that does more than just check a box. It must be able to engage fans and keep them engaged in the same way that in-game wagering would, by captivating them for the entire contest, if they so choose. Perfecting the process may be difficult as it continues to evolve, but there are already F2P products that are pushing the envelope to offer an unmatched experience, driving fan engagement beyond current levels. Operators that can include these products and execute on this strategy will deliver a higher-level experience and create a level of engagement in their brand, supported by the sports fans’ desire to engage with their teams, sports and contests. Brendan D. Bussmann is a partner and director of government affairs with Global Market Advisors (GMA).

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Leading the Way

Hard Rock Sacramento reopened in late May

Tribal casinos were the first U.S. casinos to reopen, and business has been brisk By Bill Sokolic

he first casinos to reopen in the U.S. after the pandmic shutdown were tribal properties. Tribes depend on casino revenue for government services, jobs and other essential needs, and in many cases took advantage of their status as sovereign nations to reopen before state officials gave the OK. They did so with an abundance of caution, with the health and safety of their patrons paramount. The Hard Rock Hotel & Casino Sacramento at Fire Mountain opened its doors at 10 a.m. May 21, more than two months after it closed due to the Covid-19 pandemic. “We’ve seen strong visitation levels given our reduced occupancy protocols,” says President Mark Birtha. “We’ve been very fortunate that our loyal guests have returned. There is clearly pent-up demand for many in our region, given how long the state has been under a shelter-in-place status.” Guests enjoy a complete integrated resort experience including gaming, dining, hotel and retail, Birtha says. “They seem impressed with the amount of investment and training we’ve made in our safety and sanitation protocols. Most people seem used to these expectations already, so there’s been no pushback or real confusion. They appreciate our efforts to keep their environment safe.” Foxwoods and Mohegan Sun in Connecticut reopened June 1. Pokagon’s Four Winds Casinos in Michigan and Indiana reopened June 15. These properties, owned by sovereign nations, are not subject to the laws for commercial casinos like those in Atlantic City or Las Vegas. Yet all worked with local, state and federal agencies to develop safety measures to reopen. “Although we are a sovereign nation, we’ve also considered recommendations from the federal government, the Centers for Disease Control and Prevention (CDC), and governors from both Michigan and Indiana,” says Matthew Wesaw, tribal council chairman and CEO of the Pokagon Gaming Authority. “We’ve been closely monitoring the data related to the spread of Covid-19, consulting with medical experts and evaluating the potential impact the virus could have on our community and employees.”

Global Gaming Business JULY 2020

Common Cooperation Tribal leaders and casino operators as well as regulators coordinate regionally with other tribes in order to share information and best practices to ensure that the entire tribal government gaming industry demonstrates a commitment to safety, says Dr. Katherine A. Spilde, professor at the L. Robert Payne School of Hospitality and Tourism Management at San Diego State University, and endowed chair at the Sycuan Institute on Tribal Gaming. “Each tribal government is reopening in the way that best protects the health and safety of their community, employees and guests,” says Spilde. “Certain areas of the U.S. have very different rates of infection based on population density, public health orders and other factors. Tribal leaders work closely with other government leaders to coordinate testing, implement social distancing and public health best practices and share information.” Unlike a traditional business, tribal gaming requires hosting people in tribal homelands, which makes these decisions even more important. “The reopening of our casinos comes at a critical time for our tribe and our employees that are in need of economic relief,” Wesaw says. “Unlike state and local governments which predominantly use tax dollars to operate, the Pokagon Band of Potawatomi Indians relies on revenue from its business ventures to fund services for our citizens, including health care, housing, education, family services, financial support, police and more.” The Four Winds Casinos operations team has worked closely with the Pok-

“Unlike state and local governments which predominantly use tax dollars to operate, the Pokagon Band of Potawatomi Indians relies on revenue from its business ventures to fund services for our citizens, including health care, housing, education, family services, financial support, police and more.” — Matthew Wesaw, Tribal Council Chairman and CEO, Pokagon Gaming Authority

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“On May 13, Yuba and Sutter counties had their state attestation approved and were able to advance further in easing restrictions. In consultation with the Yuba-Sutter health officer, our protocols have been reviewed and a commitment has been made to have periodic evaluations.” —Mark Birtha, President, Hard Rock Hotel & Casino Sacramento at Fire Mountain

agon Gaming Authority, the Pokagon Gaming Commission and the Pokagon Health Task Force to finalize the details, says Frank Freedman, chief operating officer. “We will be opening with some changes to our amenities and services,” he says. Prior to reopening, Mohegan Sun relied on communication with and guidance from the tribal medical director, tribal health department and local, state and federal health officials. “It’s always the intention of the Mohegan Tribal Council, Mohegan Tribal Chairman James Gessner and our leadership to remain cooperative partners with the state of Connecticut, and that certainly remains,” says Jeff Hamilton, Mohegan Sun president and general manager. “We’ve considered some of their suggestions in further enhancing our safety measures, which were already very stringent—and totaled more than $1 million. The tribe follows or exceeds state and federal guidelines, and we look forward to further engagement with Governor Ned Lamont and his team as we progress

Tradition meets transformation

into our Phase 1 partial reopening.” More than 2,500 employees were on hand for the restart. The property had a soft opening the weekend prior to June 1 with select guests and Mohegan tribal members. “This allowed our team members a chance to become more familiar with the safety measures in place,” Hamilton says. “As the next phases happen, more team members will continue to return, though at this time it’s still too early to provide a precise outlook.” Foxwoods worked closely with the chief medical officer, the CDC and the state since the beginning of the pandemic to make certain they were in step with state guidelines to safely reopen. “All of Foxwoods’ new measures meet—and in many cases exceed—the state’s,” says Rodney Butler, chairman of the Mashantucket Pequot Tribal Nation, which owns the property. Hard Rock Sacramento, owned by the Estom Yumeka Maidu Tribe of the Enterprise Rancheria, has also acted in concert with local and state officials.

nȒȒǸ ɎȒ áǣȵˢǣ ɎȒ ǝƺǼȵ ɵȒɖ ɀƺƬɖȸƺ ɵȒɖȸ ɎȒƳƏɵ ƏȇƳ ǣȇȇȒɮƏɎƺ ǔȒȸ ɎȒȅȒȸȸȒɯ‫ي‬ ۢ Casino audit ۢ Title 31/AML compliance

ۢ Financial accounting and outsourcing

ۢ CasinoEdge Sage Intacct implementation

ۢ Software implementation and consulting

ۢ Policies and procedures

ۢ Cloud-based accounting software

ۢ Cybersecurity

ɯǣȵˢǣِƬȒȅ ³ƏǕƺ XȇɎƏƬƬɎ ¨ȸƺǔƺȸȸƺƳ ¨ƏȸɎȇƺȸ

JULY 2020 www.ggbmagazine.com

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“We worked with the Yuba county Health Department to ensure we have all the appropriate measures in place,” Birtha says. “On May 13, Yuba and Sutter Counties had their state attestation approved and were able to advance further in easing restrictions. In consultation with the YubaSutter health officer, our protocols have been reviewed and a commitment has been made to have periodic evaluations.” The resort follows the Safe + Sound plan developed by Hard Rock International, which outlines a number of daily protocols that will be instituted at all its casinos, hotels and cafés that reopen. The plan is an enhanced safety program that makes sure hygiene and sanitation practices comply with the recommendations of the CDC and other health officials from Yuba-Sutter counties and the state of California. “We take seriously our responsibility to do this right,” Birtha says. “We owe it to our entire community.”

Different Protocols Tribal casinos varied in how they reintroduced amenities in the early going. Hard Rock opened every dining venue except the buffet, but all at 50 percent capacity, with social distancing and disposable menus.

“It is always the intention of the Mohegan Tribal Council, Mohegan Tribal Chairman James Gessner and our leadership to remain cooperative partners with the state of Connecticut, and that certainly remains.” —Jeff Hamilton, President and General Manager, Mohegan Sun

“We have outdoor seating at our Council Oak Steaks and Seafood signature restaurant as well, which has been a huge hit,” Birtha says. Valet and group shuttle service was not immediately offered at Pokagon. And like Hard Rock, buffets were closed. Depending on the casino, dining will be available at player lounges, bars and steak houses. Touchless menus will be available using a scanned QR code, and disposable menus will be provided on request. There will be more spacing between tables, and party sizes will be limited. Self-service beverage stations will now be staffed. At Mohegan Sun, Todd English’s Tuscany is currently the only restaurant available for sit-down dining, but on their terrace only, with physical distancing protocols in place. Restaurants such as MJ23 Sports Bar & Grill, Sky Rise Food Court, Bobby’s Burger Palace and a few more are open for take-out only. “Overall, food and beverage service for our Mohegan Sun guests has been steady and safe. Guests can enjoy their food or drink outside as well,

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with one popular location being the outdoor terrace of the Bean & Vine Café & Wine Bar,” Hamilton says. At Foxwoods, all dining is takeout for the moment. “When we do indoor dining, each restaurant and bar will have reduced seating capacities to allow for a minimum of 6 feet between each seated party of guests. Hostesses and managers will manage physical distancing at entries, waiting areas and queues,” according to Butler. “We were very pleased with our guests’ reactions and acceptance of our new practices and safety protocols.” Head counts ensured a volume of 25 percent capacity, monitored by employee counters at the entrances. “If guests arrive when we’re at capacity, they will kindly be asked to wait until we can accommodate new visitors,” says Butler. Like casinos everywhere, tribal gaming halls require most of the following: • Face masks for guests and employees • Thermal temperature checks at entrances • Hand sanitizer stations • Enhanced cleansing and sanitizing • Social distancing • Reduced capacity • Plexiglas dividers • Reduced numbers of gaming positions for slots and table games “This will surely be a new normal for our industry and virtually all industries for some time,” Hamilton says. “Our new protocols include every other slot ma-

chine being turned off, table game seating cut in half, 6-feet distance markings for any lines and four riders per elevator car. If capacities approach the max of what is available, that’s when our team will moderate.” At Foxwoods, if a guest or employee arrives without a face mask, one will be provided. Additional cleaning teams have been added in every area of the casinos with a focus on frequent cleaning of high-touch surfaces. “We’ve meticulously studied best practices, partnered closely with medical experts and tested multiple new types of safety measures. We’re confident in the investments we’ve made and the policies and procedures we’ve put in place to mitigate risks,” Butler says. Videos from Las Vegas during its reopening in the first week of June showed guests without masks and sometimes crowded around table games. Trying to prevent such occurrences could create a sticky situation. At Pokagon properties, there will be no loitering around table games. Patrons will be asked to leave if they refuse to wear a mask, Freedman says. As far as social distancing on the casino floor, security and front-line staff will speak to the guests in a way that does not produce friction. “If they defy us, we walk them out,” he says. So far, guests are adhering to the numerous safety and preventative measures, Hamilton says. “This will be a gradual road back for virtually all industries, though we’re really encouraged with the safe, fun and responsible Phase 1 reopening that has begun at Mohegan Sun.” Says Freedman, “Hopefully, we can return to our full complement of gaming, dining, entertainment and event options.”

JULY 2020 www.ggbmagazine.com

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MAKING MY POINT

Cure for Insomnia Corporate reports often take a long time to say nothing

ell you what, if you’ve got the time and the temperament, reading a stack of corporate mission and vision statements can really help you. Fall. Fast. Asleep. Like Rip Van Winkle on warm milk and Ambien. Aye carumba, some of them are just brutal. Not only are they an assault on the eyes and the ears, with prose that’s strictly amateur and painfully purple, but also with excessive, unbridled and unnecessary, uh, wordiness. Take the mission statement of a prominent supermarket chain that shall be nameless until you look it up. Yes, take it. Please. Take it and stick it in the same bin they throw baloney in after it passes the expiration date: “To create a shopping experience that pleases our customers; a workplace that creates opportunities and a great working environment for our associates; and a business that achieves financial success.” Uh, can you say that again? Wait. On second thought, don’t. Then there’s the mission statement of McDonald’s, which more or less proves that more is less: “McDonald’s brand mission is to be our customers’ favorite place and way to eat and drink. Our worldwide operations are aligned around a global strategy called the Plan to Win, which center on an exceptional customer experience—People, Products, Place, Price and Promotion.” Yeah, Ronald McDonald should have taken one of those oversized shoes and slammed on the brakes after the first sentence. That would have accomplished that mission’s mission. But no, he had to hit the gas, only to swerve out of control with first a grammatical blunder—“centers,” not “center”—and then flip over and end up in a ditch with gratuitous allit-

Global Gaming Business JULY 2020

By Roger Snow

eration that, when spoken aloud in close proximity, will get you spat on.

The Good Of course, it’s not all a semantic cesspool out there. Some mission and vision statements are quite lovely, as a matter of fact. Pithy. Punchy. Poignant. Passably poetic. See? You’re getting spat on again. TED, of the eponymous and ubiquitous talks, says a lot in saying very little, just like the talks themselves. Whoa, dude, that’s awesome stuff. TED’s vision: “Spread ideas.” Bam. Perfect. Not even a grain of grandiloquence. You can have that sewn onto a throw pillow… or tattooed onto your forearm. Caterpillar, the Fortune 100 behemoth famous for manufacturing ginormous earth-moving equipment, is also capable of moving people’s hearts with this surprisingly emotive vision statement: “Our vision is a world in which all people’s basic needs—such as shelter, clean water, sanitation, food and reliable power—are fulfilled in an environmentally sustainable way and a company that improves the quality of the environment and the communities where we live and work.” Aww, that’s so sweet, you could have knocked us over with a 10-ton bulldozer.

The Best And the winner is… “To provide access to the world’s information in one click.” —Google Hard to beat that, in terms of brevity… as well as bravado. If you google “greatest vision statement” and that doesn’t pop up, switch to Bing.

And Now for Something Completely Different Whether well-written or clunky, laconic or loquacious, these statements all follow the same

pattern. The mission is what you currently do, and the vision is where you aspire to go. In other words, missions are a mirror, and visions are a telescope. But you can scour the S&P 500, from Abbott Laboratories (health care for humans) to Zoetis (health care for non-humans) and there’s something you won’t see from any of them. One. Word. About. Employees. Think about that for a second. And then for a minute. These companies are run by the best, the brightest, the most empathetic minds in the business universe, yet not one of them weaved their own people into their foundational documents. Hmm. Can’t be on purpose. Must be that no one considered it. So let’s consider it. If you were to conjure up one of these statements but eschewed a mirror or a telescope for something that looked into your company’s insides, an X-ray machine or an MRI or a microscope, you may come up with something like this: “Our vision is to hire doers, dreamers, and disruptors nimble enough to change with the times and innovative enough so the times must change with them.” But hey, don’t take my word—or my words—for it. Look inside your own company and dream the dream of introspection, not of what your company should do or be, but instead what you want your company’s people to do or to be. Or not to be. That is the question… as well as the answer. Roger Snow is a senior vice president with Scientific Games. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of Scientific Games Corporation or its affiliates.

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New Ways Data Will Support the Recovery The coronavirus pandemic has reshuffled the deck of revenue forecasting. For the foreseeable future, expect operators to view data in a new, more urgent way. By Dave Bontempo

n the Covid-19 era and beyond, analytics will play an even more important role in gaming operations. Casinos are pondering phased reopenings in an adjusted consumer landscape. Gone are instant room-rate and comp decisions made from number-crunched data. Peak-rate forecasts and dynamic pricing, which helped to maximize non-gaming spend in recent years, now are hollow buzzwords. Analytics will play an important but different role in the near term. The information will inform judgment calls, not replace them. From the data, operators will drill down and decide which customers can be counted on, what flexibility can be offered to big players who suffered income interruptions, and whether smaller, more frequent customers should be moved up the rewards chain. They may even redefine premier players and try to anticipate future spending choices from customers. This is an important shift in the operator-analytics relationship. Human beings, assisted by data, will deliver the difference-making personal touch in a nervous gaming industry.

The New Paradigm Cendyn is a cloud-based software and services provider that develops integrated technology platforms to drive sales, manage revenue and chart marketing performance in the travel and hospitality industry. Somewhere in the cloud lie answers to help operators shift their focus. “The timing of analytics may never be more significant than now,” according to Dan Skodol, vice president of data science and analytics for Cendyn. “Properties must evaluate where they are relative to competitors and their own projections regarding their phased reopenings. “You have to know how your business has changed. Where are you from a revenue management and marketing perspective? What changes do you need to make in your comps? Are you looking at a different set of hotel guests than before? How do you compare with your competition? Software is going to help you with that.” 44

Global Gaming Business JULY 2020

Regardless of the industry climate, Cendyn has been retooling for several months. In August 2019, the company expanded its gaming footprint by acquiring Rainmaker. Skodol, a Rainmaker veteran, considers it an ideal partnership. “Rainmaker was a natural fit for Cendyn, as revenue management complemented our existing suite of marketing and sales software products in the hospitality space, for casinos and non-casino hotels alike,” he says. “It helped expand our reach and our customer base to include more casino hotels, where the application of both CRM and revenue management is so critical to success.” Annexing Rainmaker helped Cendyn build richer guest profiles that utilize integrated data points across hotel systems, including gaming.

Using data to build richer guest profiles gives hotel casinos a superpower: the ability to truly know their most valuable patrons.

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Data science is the answer to the convergence of bricks and mortar, digital marketing and interactive gaming. That gives hotel casinos a superpower: the ability to truly know their most valuable guests, he adds. “Important relationships emerge from seemingly unrelated data,” he says. “They help hotels understand the distinct steps of the gaming guest journey, so they can capture them with the right message at the right time. Through deep dives in things like association-mining with gaming purchases, we can further personalize hotel offers by learning what purchases are linked to one another.” Skodol expects a powerful synergy between the companies. “Rainmaker has the ability to optimize on eight other revenue/profit streams aside from room revenue,” he says. “This obviously includes gaming revenue but can also look at F&B, spa and other ancillary sources. Cendyn’s CRM can provide a more complete picture of total guest worth, leading to a more effective optimization of total hotel profit.” Rainmaker products from Cendyn’s revenue cloud complement its marketing and sales clouds. The revenue area includes important Rainmaker products like guestrev and grouprev. “These absolutely work in tandem with each other in a way that no other RM systems do,” Skodol says. “We recently launched a group forecast feature that works to the benefit of both products. The products consider the projected group and transient demand together for future dates and identify the optimal group/transient mix. “Guestrev then removes the projected group block from the capacity available to transient and yields the forecasted transient demand within this new constraint. Additionally, grouprev will use the forecast to take into account the possibility of groups displacing other groups in its pricing recommendations, which is something that’s not accomplished by any traditional transient displacement model.” With Rainmaker, in the revenue-cloud realm, the operator would have a complete automated revenue management software solution to optimize total profits for the hotel. The property provides Cendyn with an ongoing feed of its booking data and the ancillary customer values associated with each room. Cendyn forecasts the property’s demand, then runs a sophisticated mathematical optimization to identify which specific segments to “accept” into the hotel and which to “reject.” On the group-business side, Cendyn’s solution empowers sales teams to book group business at optimal rates, allowing for quick responses and the highest likelihood of closing group business. “Cendyn’s CRM and ‘marketing cloud’ products are a valuable complement to any casino wanting to bolster their CRM efforts, allowing casino

hotels a single source of truth for all types of customer activity beyond simply gaming spend, where most casinos seem to focus, automating targeted marketing communications, and facilitating personalized front-line staff interactions,” says Skodol. “The ‘demand creation’ aspect of the business tackled by the marketing cloud works in tandem with the ‘demand management’ aspect of the revenue cloud. Some metrics hoteliers would use to track success inside our solutions would be things like occupancy rates, revPAR, ADR, gaming revenue per room, loyalty rates, booking pace, database churn, new-versus-returning guests and conversion rates.” This product feature will gain more traction when business improves.

The Agile Analyst This extraordinary era has made hotels, casinos and stadiums eerily quiet. But operators who gain an early, analytics-driven feel for the new environment will be the first to prosper in it. Ravi Acharya, director of engineering at Agilysys, identified a string of short-term necessities from operators. “We’re hearing from hotel and casino operators who are specifically looking for a few data sets right now as they plan for reopening after Covid-19-related closures,” he says. “We consistently hear about product mix reports, which have been in use for a while, but recently there’s an upsurge as casinos are planning what their ‘new normal’ might entail. “They’re using product mix reports to identify how patron purchasing behaviors are changing. They want to know the latest F&B purchasing trends, and what are the possible drivers. “Are the changes due to the evolving demographics or due to buyers’ perceptions that certain menu items require less staff handing, and are therefore safer? They’re even looking at how the post-Covid world may shift toward preferences for healthier items, such as salads or smaller portions. The product mix report is ideal for menu optimization and allows the business to evolve as F&B purchasing trends change.” Analytics are also used to determine how many menu items were sold and if they were tendered using comp or non-comp forms of payment. Knowing how patrons pay for their F&B purchases—and specifically, how many are leveraging their loyalty rewards—gives operators valuable insights into their businesses, Acharya says. Data shows everything, from the potential abuse of loyalty accounts to inventory levels for the most popular (or least popular) JULY 2020 www.ggbmagazine.com

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One F&B outlet used future weather data to meet demand, ordering more soup to serve guests during a cool, rainy spell.

menu items, all of which help operators manage their profit margins. And here’s some food for thought: the weather. “Analytics using the weather is yet another unique data set we see being used to plan menus, where the local weather forecast helps chefs plan their F&B promotions for the coming week,” Acharya says. “The integration of third-party weather APIs with our analytics software also allows operators to understand any potential outliers that may be skewing their data. “In one instance, weather data revealed that during a cold and rainy week, soup sales were much higher during what would typically sell during the warm summer. In this particular instance, the outlet used future weather data to ensure they would meet demand by ordering more soup from their vendor rather than having to potentially turn away patrons who were wanting the comfort of warm soup on a rainy day.” For more than 40 years, Agilysys has been a leader in hospitality software for hotels, casinos, resorts, food-service providers, stadiums and arenas. Acharya says analytics technology deployed by the company makes the difference for hotels and casinos. “Agilysys’ rGuest Analyze is strategically different from other analytics tools in that it is extensive enough to bring in data from across all property outlets, including multi-property enterprises,” he says. “Lodging, F&B and even some casino IDs are combined to present a holistic view of patron and business information, with the ability to segment down to the smallest profit center or data point. We’ve made it accessible in an easy-tounderstand graphical representation of the operator’s selected data. “Unique to rGuest Analyze is that it has two flavors—a SaaS (software as a service) solution for analytics with rich visualization and data exploration capabilities,” he asserts, “and there is also DaaS (data as a service), a method that delivers raw data to be ingested into an existing customer data warehouse for further analysis with other products.” For those who prefer the SaaS-based visualization portal, simple, intuitive slicing and dicing reveals business performance insights as the data is collected and analyzed, he says. This provides a browser-based snapshot of the requested data in an easily digestible dashboard. DaaS users, on the other hand, are most often large resorts that prefer on-demand access to their data feeds. Agilysys has built an API that enables SFTP uploads so those operators can leverage the data how and when they wish. Acharya says the company’s analytics software also lets managers look into folios to assess patron spend by room, combining retail, restaurants, entertainment, in-room dining, spa and other resort activities. Any category that hits the patron’s folio is used to evaluate the total spend, as well as the many different ways operators like to dig into their data. Another innovation is working its way through the company pipeline. 46

Global Gaming Business JULY 2020

“We have an upcoming mobile release, based on requests from our resort partners, to help make their jobs easier,” he says. “Restaurant managers, for example, can see their revenue, tips, server performances and other stats while off-property, when they’re roaming the floor or on the move in situations where they’re managing multiple on-property outlets. It’s not an app, either, and so the responsive design can be rendered on any tablet or mobile device with a web browser.”

Timely Reporting Innovation Analytics is the data analysis arm of The Innovation Group, a premier provider of advisory services for the gaming and leisure industries. Data science is its answer to the convergence of bricks and mortar, digital marketing and interactive gaming—a fundamental shift in how the global gaming industry works. The company has plunged into the post-pandemic world with a gaming industry white paper, “Coronavirus Recovery Analysis.” It’s a preliminary look at potential recovery patterns of the gaming industry. The analysis applies a range of demand recovery scenarios based on: • The level of decline in the economy measured as employment and income and in perceived customer security, based primarily on performance immediately preceding closures; • The ramp-up of economic recovery; and, • The ramp-up of consumer acceptance for spending and use of public spaces. Supply factors include the impact of social distancing and potential changes in the competitive landscape. Constraint sensitivities to reflect the impact of social distancing are based on a continuum of thresholds linked to daily win-per-unit. Win-per-unit above $500 reflects extreme constraint; below $150 reflects minimal constraint. Findings indicate that the rate of revenue recovery by the end of the first year following reopening would be lower than demand potential as long as social distancing measures are in effect. A casino with extremely high utilization pre-virus would reach pre-virus levels of only 33 percent, while a casino with minimal utilization would reach 73 percent, or an additional drop of approximately 10 percentage points off the demand potential. These estimates are based on closing three of every five gaming positions. If wider spacing is required, the recovery would naturally be lower, or vice versa. The report, like other analytics tools from market leaders, unveils the near-term interests—and unprecedented challenges—facing the industry.

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EMERGING LEADERS Big Buyer Luciana Van Sickle Global Strategic Sourcing Manager, Aristocrat Technologies uciana Van Sickle’s position at Aristocrat Technologies presents her with all kinds of obstacles. As senior manager for purchasing and, before that, global strategic sourcing manager, she’s dealt with “trade wars, freight availability, dock strikes, global pandemics, inflation costs, supplier performance, commercial problems.” The coronavirus pandemic, of course, brings its own challenges. With the shutdown of most gaming halls, casinos lacked the revenue stream to purchase new hardware, like slot machines. “It’s my job to mitigate all our supply risks and have options to secure supplies while keeping costs down and quality high,” she says. Van Sickle was born in Los Angeles and raised in Pico Riviera, L.A. County. She started working at 15, worked full-time after high school, went to junior college part-time, and got an associate degree in business administration. She married at 22, and had her first daughter a year later. “Family life and responsibilities became my first priority,” she says. “College was last.” Another daughter arrived five years later, when the family moved to Las Vegas. That’s when Bally Technologies—later Scientific Games— recruited Van Sickle as a buyer. “By the fifth year of my Bally tenure, I was promoted to senior buyer. My boss

advised me if I was interested in advancement, I would need a business degree.” She enrolled at the University of Phoenix in 2013 and graduated four years later with a bachelor of science in business management. With degree in hand and rave job performance reviews, Van Sickle joined Aristocrat in 2017. Today, she leads a team of six buyers. “I source and introduce new product launches, then negotiate the commercial terms. In the gaming industry, this would be our slot machine,” she says. Van Sickle credits her success to numerous mentors along the way, including Richard Ramonis, with whom she worked when he was vice president of procurement at Bally Technologies. “He posed a challenge, set the bar, I achieved it, then he would raise the bar,” says Van Sickle. “Continuous improvement is one of my best skills. I can adapt to a vast amount of supply-chain challenges because of what he put me through.” From Kurt Spencer, who led the hardware engineering team at Bally, “I learned how to read our specifications and understand how our products function to help me negotiate with our suppliers,” says Van Sickle. Spencer is now vice president of sales operations for Scientific Games. Alex Singleton introduced Van Sickle to a large network of valuable sources. “He is kind and humble,” she says of Singleton, vice president of sales, IGM Solutions, “and he always took the time to explain manufacturing to me in my early career.” And then there are her parents, Nabor and Yolanda Farias, who immigrated to the U.S. from Mexico 40 years ago. “My parents found a way to always work and get us what we needed however they knew how.” Van Sickle was fortunate to have people who encouraged her in her life and career. For those who seek to follow in her footsteps, she has these words of encouragement: “Treat everyone fairly and kindly. The industry is small and everyone knows everyone. In gaming, we all have the same suppliers, some of the same leadership, the same friends.” —Bill Sokolic

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NEW GAME REVIEW by Frank Legato

Happy 8’s

Incredible Technologies

his game on Incredible Technologies’ super-sized V55 cabinet is an Asianthemed game centered around the Chinese lucky number 8. The base game is a five-reel, 40-line video slot available with five different pay tables. The game’s main primary-game feature is “Scatter Blast,” an innovative accumulation mechanic for bonuses, progressives and added wilds over a cycle of eight spins. On the eighth spin, all wilds are released to the 40-line reel set below for potentially huge wins. Any progressive awards or bonus meters that have been filled with their respective scatters are also awarded. After eight spins, all bonus and progressive collections are reset to start the cycle over. Three Bonus scatters appearing within the bonus meter over the course of eight spins trigger

eight free games. Any accumulated wilds from the base game are carried over to free spins, where accumulated wilds are active on the reels and shift with every spin. All the collected wilds and features carry back over to the base game to finish up any remaining spins in the cycle for more chances to gather wilds and win progressive awards. Manufacturer: Incredible Technologies Platform: V55 Format: Five-reel, 40-line video slot Denomination: .01, .02, .05, .10 Max Bet: 60, 120, 180, 240, 300 Top Award: Progressive; $8,000 reset Hit Frequency: Approximately 40% Theoretical Hold: 5%-15%

Lucky Trail

Novomatic Americas

his Asian-themed game is part of the Ji Deng Gao Zhao series on Novomatic’s Panthera Curve 1.43 cabinet. Games in this series feature a four-level progressive jackpot, with progressives won through a picking bonus. The base game is a five-reel, 243-ways-towin video slot. Wild symbols appearing on the middle three reels trigger a unique respin feature involving a display of golden lanterns above the reels. The Wild Golden Lantern symbol substitutes for all blue scatter symbols, and the Wild Lantern symbol substitutes for all but scatters and the Wild Golden Lantern. All appearing wild symbols rise to corresponding positions in the matrix of lanterns on top of the reels as long as space is available, or else remain in their stop position. Golden Wilds are counted separately in each feature in the Rising Lanterns Jackpot meter—it takes six to win the Rising Lanterns Jackpot of $500, which can be won multiple times during a feature. Three scatter symbols (on reels 1, 3 and 5 only) trigger the Free Spin feature with 8 free spins—and a re-spin is triggered and re-triggered by a wild symbol on the last spin. All wilds on the screen are included in the evaluation of the total feature win. Free games are played at trigger bet. At the end of any feature that included a wild symbol, the Pick & Win feature for the Ji Deng Gao Zhao Jackpot may be randomly triggered. A field of 12 bags appears on the screen, each hiding one of the jackpot symbols. The player picks until matching three to win the corre-

Global Gaming Business JULY 2020

sponding jackpot. Jackpots reset at $10 (“Mini”), $50 (“Minor”), $750 (“Major”) and $15,000 (“Grand”). Manufacturer: Novomatic Americas Platform: Panthera Curve 1.43 Format: Five-reel, ways-to-win video slot Denomination: .01 Max Bet: 500 Top Award: Progressive; $15,000 reset Hit Frequency: Approximately 30% Theoretical Hold: 3%-12%

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Lucky Buddha IGT

his new game on IGT’s CrystalDual 27 cabinet features a unique repeating-win primary game bonus event. It is a colorful game built around Asian images and the main symbol, a laughing golden Buddha. The base game is a five-reel video slot available either as a 30-line game with a 60credit cost to cover or a 10-line game with a 20-credit cost to cover. Random winning spins will trigger a new game mechanic called “Repeating Win Multipliers.” After a win, the winning symbols are added to the top of the reels, each with an assigned multiplier. That multiplier will apply to any wins involving the same symbol over the ensuing seven spins.

Penny Pier Scientific Games

his double-progressive series of video slots on Scientific Games’ TwinStar Matrix core cabinet celebrates boardwalk-style carnivals such as one may have seen in Atlantic City or other Eastern shore towns at the turn of the 20th century. The base game is a five-reel video slot available in configurations of five, 25 or 50 paylines. There are two initial base games, called “Step Right Up” and “Pete the Sweet.” Both have the same two main bonus features. The “Drop N Slide” feature can lead to one of the four displayed prizes—in the penny version, static prizes of $10 (“Mini”) and $50 (“Minor”), and the two progressive jackpots, resetting at $1,000 (“Major”) and $10,000 (“Grand”), the top prize. Three, four or five scattered “Slide” symbols trigger the event with three, four or five games, respectively, on a five-by-five prize board filled with bronze, silver or gold coins. Each coin will display a prize of either Mini, Minor, Major or a bonus up to 250 times the total bet. For each game, up to three coins will be dropped to land either in a tube or in a spot marked “RING ME.” If the coin lands in the RING ME slot, the award will either be the Minor, the Grand or “Drop the Lot.” The three, four or five scattered Slide symbols trigger the Drop n Slide with three, four or five games respectively. A five-by-five prize board will be filled with bronze, silver, or gold coins. Each coin will display Mini, Minor, Major, or up to 250X total 52

Global Gaming Business JULY 2020

When the feature happens with the high-paying Buddha, green Dragon Turtle or Good Luck Cat symbols, the ensuing wins can be huge. When three bonus symbols appear on the reels, players will spin a giant wheel to activate the wheel bonus. The bonus wheel offers players the chance to win credits, free games, progressives, and Repeating Win Multipliers. Manufacturer: IGT Platform: CrystalDual 27 Format: Five-reel, 30-line video slot Denomination: .01 through 5.00 Max Bet: 3,000 Top Award: 100,000 credits Hit Frequency: Approximately 40% Theoretical Hold: 6%-11%

bet. For each game, up to three coins will be dropped and land in a tube or RING ME. If a coin lands in RING ME, then four to six coins, the Minor, the Grand or “Drop the Lot” will be awarded. If Drop the Lot is awarded, then coins will land in tubes until all tubes have five coins. Once all coins have landed in tubes, the “Slide Feature” starts. A platform slides back and adds the bottom row of coins in the tubes above the top of the corresponding columns of the prize board. Then the platform pushes the added coins onto the top row of the prize board, moving every coin in a column with an added coin down one position on the prize board. The feature is repeated until there are no more coins remaining in tubes. There also is a free-games feature, triggered by six or more scattered heart symbols. Three free games play out on a reel set five rows high. Each scattered heart symbol is collected, including the triggering symbols. When the free games are over, a bonus prize is awarded based on the total number of collected hearts. Manufacturer: Scientific Games Platform: Alpha; TwinStar Matrix Format: Five-reel, five-, 25- or 50-line video slot Denomination: .01, .02, .05, .10, 1.00, 2.00 Max Bet: 50, 250, 500 Top Award: Progressive; reset at 1 million times denomination Hit Frequency: Approximately 40% Theoretical Hold: 5.07%-12.78%

2020

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OPERATIONS

The Elephant in the Room If the health of your guests truly is paramount, now is the time to ban smoking

ver the course of the past month, most of the nation’s casinos have reopened. Each has introduced a variety of safety protocols. These include a reduction in seating capacity, greater separation between slot machines, physical barriers to separate employees from players and each other, temperature checks at entry points, face masks for employees and customers, and reminders to practice social distancing. Virtually every casino has stated that they are doing so for the health and safety of their customers and employees. While operators have gone to great lengths make their properties safer, many have chosen to ignore one behavior that places their patrons and employees at a heightened risk of infection: they have chosen not to prohibit cigarette smoking. While over 80 Indian casinos, a number of commercial operators and some state regulatory authorities have announced that they will prohibit cigarette smoking upon reopening, others continue to allow patrons to smoke. In so doing, they’re ignoring the elephant in the room.

Cigarette Smoking & the Virus To understand the risk that smoking poses, one must first recognize the two primary byproducts of smoking: smoke and coughing. Anyone who has smoked or has been around someone who does knows this to be true. Smoking generates smoke and it stimulates coughing. While it hasn’t been determined if the Covid-19 virus can be transmitted through cigarette smoke or vapor, what has been proven is that coughing is a primary form of viral transmission. By definition, coughing is the sudden expulsion of air and mucus from the lungs, which in turn releases respiratory droplets into the atmosphere. If a person has the virus, it can easily be spread by coughing. Face masks are designed to prevent the spread of those droplets. That is why the CDC and state health departments recommend that people wear face masks in public. In order to smoke a cigarette, it is necessary 54

Global Gaming Business JULY 2020

By Andrew Klebanow

to remove one’s face mask, which defeats its primary purpose. Furthermore, the act of smoking a cigarette requires that a smoker touch his or her lips multiple times. Those fingers then touch chips, cash, cards, machines, seating surfaces and whatever else is in reach. A smoker who is infected and is asymptomatic, or whose only symptom is a dry cough, provides the virus with an ideal accomplice to help in its further transmission. At one level, it’s understandable why casino operators would want to continue to allow smoking in their properties. The past three months have been devastating to them and to their employees. Operators just want to reopen and begin servicing their customers again. Some of those customers are smokers, and no operator would want to alienate loyal patrons who intend to spend money in their casino. Many operators also fear the permanent loss of patrons if an alternative casino permits smoking. The casino industry’s experience with smoking prohibition has produced sufficient data so operators know what to expect. In November 2002, the state of Delaware mandated that its three racetrack casinos ban smoking from their casino floors. The result was an 11.3 percent decline in gaming revenue in 2003. This was followed by an increase of 10.2 percent in 2004 and an additional 4.7 percent in 2005. Colorado saw a 9.3 percent decline in 2008-09, the first year that its smoking ban was implemented, only to see a 9 percent increase in 2010-11. Gaming revenue initially declines, but then recovers. Individual casinos within a larger market also experimented with self-imposed smoking bans. Revel in Atlantic City opened in 2012 as a nonsmoking property and closed a little over two years later. While property design and operational strategies played a significant role in the property’s demise, the non-smoking policy took the brunt of the blame. There remains a general fear among commercial operators of implementing property-wide smoking bans unless the entire market is required to do so. Even then, operators and regulators fear a loss of

market share to other jurisdictions should those markets continue to permit smoking in their casinos. Most state regulatory authorities that oversee commercial casinos have been reluctant to ban smoking during this pandemic. Nevada Governor Steve Sisolak directed the Nevada Gaming Control Board to establish rules and safety protocols for the opening of casinos in that state. The board didn’t institute a smoking ban, saying it was the responsibility of the state legislature to pass such a law. Casino regulatory authorities in Mississippi and Louisiana also did not issue bans.

The Risks of Reopening Without a Smoking Ban Contact tracing is now being used in a number of countries and is ramping up in the United States. Health departments are combining traditional tracing techniques with technologies found in mobile devices to identify hot spots and rapidly inform people who may have been exposed to the virus. The goal is to inform anyone who may have been exposed so they can get tested. What happens if contact tracing implicates a casino as a viral hotspot and worse, the source of the outbreak was a customer who was allowed to smoke in the casino? At the very least, their statements about the putting the health and safety of their customers first will be seen as disingenuous. Worse, by continuing to allow cigarette smoking, casino operators risk not only unnecessarily exposing their patrons to the virus, they risk jeopardizing their reputations and the casino industry as a whole. This industry is not governed by one regulatory body. It’s up to individual tribes, commercial operators and state regulatory authorities to decide how they want to treat smoking. Hopefully, those that recognize the threat that smoking poses in spreading the virus and endangering their customers will do the right thing and push the elephant out of the room. Andrew Klebanow is a principal at Klebanow Consulting. He has worked in the casino industry since 1977 and as a gaming consultant since 2000. He can be reached at andrew@klebanowconsulting.com.

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Hold or Fold: Should PAGCOR Sell Its Casinos?

PAGCOR Heritage, downtown Manila

Is the company a regulator or an operator? Some experts believe it’s time to make a choice | By Andrew Klebanow

s the Covid-19 pandemic continues to wreak havoc on economies throughout the world, governments are exploring ways to recover lost tax revenues by privatizing certain industries under their control. Such is the case in the Philippines, where politicians are proposing the sale of casino assets owned and operated by the Philippine Amusement and Gaming Corporation (PAGCOR). This is not the first time that the topic of privatization has been broached. Calls for PAGCOR to divest its gaming assets so the agency can devote its complete attention to casino regulation have come up numerous times in the past. The question is, is now the ideal time to sell?

Understanding the Roles of PAGCOR PAGCOR performs a variety of vital functions. It is the regulator of all games of chance in the Philippines and oversees the privately owned casinos including the integrated resorts in Entertainment City and other casinos located in resort destinations. In addition, PAGCOR regulates other forms of gaming such as e-game cafes, sports betting and electronic bingo outlets. These operations can be found throughout the provinces and collectively are sizable enterprises. There are approximately 26,000 electronic bingo machines serving the local population. In addition, there are approximately 200 e-gaming cafes, each with 50-100 machines that can be found in malls and storefronts throughout the country. In 2016, PAGCOR took over regulation of the country’s offshore gaming operations. Referred to as Philippine Offshore Gaming Operations or POGOs, these are essentially casinos housed in studios that feature a variety of table games staffed by live dealers. Players residing outside of the Philippines can log onto one of the country’s 60 online casinos, select a game and dealer, place real-money wagers, and observe the outcome in real time on their computers or mobile devices. Filipino citizens, regardless of where they live, are prohibited from wagering on 56

Global Gaming Business JULY 2020

these online portals. POGOs have become massive enterprises, and have become an important source of gaming tax revenue. They have also had a material impact on the commercial real estate markets, since they require copious amounts of office space. Their size and rapid growth have put pressure on PAGCOR to devote more resources to better regulate this industry. PAGCOR is also an operator of various casino enterprises, and these are the assets that private casino operators prize. PAGCOR operates casinos under the Casino Filipino brand. Located in popular tourism destinations, they serve a mix of locals and visitors. While PAGCOR owns these businesses and their gaming licenses, they do not own the properties in which these casinos are housed. In addition, PAGCOR operates 32 satellite casinos. They can often be found in hotels, and are operated as joint ventures with those hotels’ owners. Once again, PAGCOR does not own the real estate in which these casinos are located. They simply own the licenses and operate the casinos. PAGCOR has enjoyed robust growth, and is the third largest revenue contributor to the central government. As such, PAGCOR, in its current configuration, plays a vital role in supporting government services. In 2019, PAGCOR saw an 11.2 percent year-over-year growth in gaming revenue. It also employs 11,000 workers. Nevertheless, as the costs of dealing with the pandemic rise, there are calls for PAGCOR to cash out its casino operations. The initial questions that one must ask are, what is the value of these various gaming assets, and will a sale of those gaming assets exceed the annual contributions that PAGCOR makes to the central government? PAG-

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PAGCOR Mimosa

PAGCOR Angeles

Casino Paranque

consolidated and is known as the PAGCOR charter. In 2007, the Philippine Congress passed Republic Act No. 9487, extending the corporate life of PAGCOR by 25 years to regulate and operate games of chance, to issue licenses, and to enter into joint-venture, management and investment agreements with private entities. This led to the development of the highly successful Entertainment City integrated resort complex in Manila Bay. It would literally take an act of Congress to change PAGCOR’s Charter and allow it to sell its casino assets. This is no small task.

Who Are The Likely Buyers? COR does own the gaming devices, table games, casino furnishings and underlying casino management system that serve as the backbone of each casino’s accounting and marketing system. Because of its commitment to upstream profits, PAGCOR must constantly weigh the benefits of updating its slot machines and gaming environments against the contributions it is obligated to make to the National Treasury. Invariably, it is the latter that wins, and, while PAGCOR’s Casino Filipino properties provide an adequate gaming environment, the privately run casinos in Entertainment City offer a far more compelling gaming and entertainment experience. Any purchaser of a Casino Filipino or satellite casino will have to invest in new gaming equipment and casino management systems, and improve the gaming environments in order to grow revenue. Those capital costs must be factored in when trying to determine an appropriate price to pay for a particular casino. In normal times, placing a valuation on a particular gaming asset is a fairly straightforward exercise. An examination of past gaming revenue performance coupled with an analysis of demographic trends within the primary markets would yield a forecast of future gaming revenue. Unfortunately, these are anything but normal times. The closure of the nation’s casinos in order to stem the growth of the pandemic makes it very difficult to predict how quickly gaming revenue will recover. What is certain is that social distancing strategies will reduce gaming capacity and with it, gaming revenue. In addition, it is impossible to predict if gamers will return and play at levels they did in the past. Also, without a widely available vaccine, the pandemic could once again escalate and force the central government to again implement lockdown measures. Given this uncertainty, any potential buyer will want a substantial discount on the proposed sale price.

An Act of Congress PAGCOR was created by virtue of a presidential decree issued by President Ferdinand Marcos in response to calls for the Philippine government to put a stop to the proliferation of illegal casino operations. The decree was later amended and 58

Global Gaming Business JULY 2020

Another question that arises: Should Congress authorize the sale of PAGCOR’s casinos, who would be the likely buyers? The Casino Filipino properties represent an enticing opportunity, particularly for those casino operators who are familiar with both the local gaming and tourism markets. Possible buyers might include Bloomberry Resorts, owner of the highly successful Solaire Resort Casino; Belle Corporation, the company that owns the land on which City of Dreams sits; and a few other Philippine-based companies that have ownership interests in other gaming enterprises and ready access to cash. The satellite casinos would probably garner the interest of the individual hotel operators where these casinos are located. The question again is, what price would they be willing to pay, given the uncertainty in trying to predict future gaming revenue? Another issue that would have to be addressed is the future of PAGCOR employees and retirees. Those retirees rely on pensions that must continue to be funded, and current employees have received commitments from PAGCOR for future benefits. It is unlikely that any buyer of a casino would be willing to assume those liabilities. PAGCOR remains under enormous pressure. The rapid growth of the POGO industry will require additional resources in order to regulate online gaming activities. The reopening of its Casino Filipino and satellite casinos also remains a challenge, as is its ability to regain the momentum those properties had prior to the pandemic. PAGCOR’s recent success and the robust contributions it made to the National Treasury have created expectations that those payments will continue. Faced with all of this, it may be tempting to explore the sale of its casino assets. Nonetheless, given the market’s uncertainty, the steps required to effect a sale, and potential buyers’ reluctance to pay a high price for those gaming assets, now may be the worst time to sell those assets. Given all this, the most prudent course may be to hold onto the assets until a more opportune time arises. Andrew Klebanow is a principal at Klebanow Consulting. He has worked in the casino industry since 1977 and as a gaming consultant since 2000. He can be reached at andrew@klebanowconsulting.com.

CALL FOR NOMINATIONS AGEM Continues Memorial Awards to Honor Legacies of Jens Halle and Peter Mead Fifth Annual Jens Halle Memorial Award Honoring Excellence in Commercial Gaming Professionalism

A longtime Bally and Novomatic executive in Europe who was most recently CEO of Merkur Gaming based in Florida, Jens died on May 20, 2015 at the age of 57. He will not be forgotten and the Association of Gaming Equipment Manufacturers (AGEM) is asking for nominations that meet the following criteria:

Fifth Annual Peter Mead Memorial Award Honoring Excellence in Gaming Media & Communications

The founder and publisher of Casino Enterprise Management magazine, Peter died in Las Vegas on June 24, 2015 at the age of 54. He will not be forgotten and the Association of Gaming Equipment Manufacturers (AGEM) is asking for nominations that meet the following criteria:

“Nominees must have experience working in the mainstream “Nominees must have experience working in the global media, gaming trade press or individual gaming supplier sector for a gaming company PR/communications minimum of 10 years and possess the following traits and qualities that Jens for a minimum of 10 years and possess displayed throughout his working the following traits and qualities life: Professionalism, business success, that Peter displayed throughout his attention to detail and timely followworking life: Quality reporting and up; a willingness to ‘go the extra communication with an emphasis on mile,’ both figuratively and literally; personal contact to generate ideas and a sense of humanity in an oft-times gather information; taking risks and cutthroat business; a recognition of questioning the status quo; challenging the importance of a handshake and a Tom Nieman and Natalie Burt, (accepting on the industry to consider new ideas; and fair deal for all; and a dedication to the behalf of the late Dave Palermo) honored as identifying trusted partners to improve 2019 recipients during G2E in Las Vegas the overall product.” health of the industry as a whole.”

Do you know of someone who exemplifies these qualities? Nominate them! All nominations must be between 300 and 700 original words and submitted via email to AGEM Executive Director Marcus Prater at Marcus.Prater@AGEM.org and received by the August 1, 2020 deadline. Winners will be honored during the Global Gaming Expo (G2E) in October. ©2020 Association of Gaming Equipment Manufacturers (AGEM).

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FRANKLY SPEAKING by Frank Legato

High Stakes and Sad Tales

poker news website called “High Stakes Database” recently published a column written by “Tom”—seriously, that’s literally what the article’s byline said, “Written by Tom”—headlined “The Saddest Things Ever Seen in a Casino.” Some of the examples Tom cited actually were sad, like “Gambler Juniato” walking in front of a bus after losing all her money in a casino. Others, though, were not really sad—like “Gambler Tom” throwing strategy out the window to deliberately lose at blackjack, so his wife couldn’t get hold of his dough. Apparently, Gambler Tom was upset because he caught his wife fooling around, and for some reason, he thought the best way to exact revenge would to become a pauper himself. “That’ll show her,” he thought. By the way, that’s “Gambler Tom,” as opposed to “Tom” who wrote the article. The author seems to want to brand the tragic subjects of his sad stories as gamblers, so readers know it was gambling that led to all their woes, which he said were “both sad and shocking.” For the record, the first story, which Tom listed last, was sad and shocking, for sure. But I wouldn’t say Gambler Tom’s story was sad or shocking. I’d describe it as unusual, perhaps baffling, and maybe even a bit comical. The other supposedly sad tale, with which Tom led off his treatise on the evils of gambling, was not really sad, and certainly was not shocking. In fact, it’s not even unusual. Just after Tom’s dramatic intro to the piece, in which he stressed that a casino can be “the scene of absolute devastation,” Tom related the tale of “An American in Australia.” It’s about “Malcolm,” an American working as a roulette dealer (that’s why he’s not “Gambler Malcolm”) in an Australian casino, who witnessed an elderly man win a car worth around $30,000 as a video poker jackpot. According to Malcolm, the winner went to a podium and said he’d put more than $600 into the video poker machine that day, before winning the $30,000 sedan. My immediate reaction to learning this fact was this: “Good job!” I mean, a $600 investment nets you a $30,000 car? That sounds like a boffo gambling session to me. Not to Tom (the writer, not the gambler), whose first reaction was this: “Just how much had he spent over the years? Some days he probably spent at least $1,000, and had likely already paid for the car several times over.” Tom thought this was “sad and shocking.” I call it rampant speculation that bends in a twisted contortion to arrive at—no, jump to—a conclusion. First of all, spending at least $1,000 “some days,” on a near-zero-house edge game like video poker, definitely means there were other days when the man won at least $1,000. And maybe he even ended up winning on 60

Global Gaming Business JULY 2020

those days his wagers reached $1,000. Heck, it’s possible to spend all of $20 and end up with more than $1,000 going through the credit meter in wagers, maybe more than once. I’ve done it many times. Secondly, the unnamed gambler—we’ll call him “Gambler Osgood”—obviously has enough money to gamble, clearly enjoys it, and suffers no negative effects from the activity. He may or may not have already paid for the car throughout the years several times over, but he probably also won just as often, and maybe more (he’s elderly, so he had time) and he had a great time along the way. Just like me. I know I’ve paid for my free hotel room and free drinks many times over if you count losing wagers over the years. But I still love getting the free hotel rooms and free top-shelf liquor. (It makes me feel like Gambler Osgood.) Is that sad and shocking? Of course not. I’ll maybe concede pathetic, but so is binge-watching Green Acres. I do that, and no one’s calling it some tragic tale. Finally, it’s a car worth $30,000. What’s that, a Hyundai? I wouldn’t have needed to buy a Hyundai several times over in any event, so why is this even an issue? Malcolm followed his sad tale of Gambler Osgood with a story of an occasion when he was stacking chips at his roulette table and a $25 chip rolled onto the floor, where a 60-year-old man “cat-like pounced on the floor, scurrying on his hands and knees across a heavily soiled carpet,” before grabbing the chip and running out the door. OK, that is a little sad and shocking. I would never do that. Well, not for anything less than a $100 chip, anyway.

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GOODS&SERVICES

AGA TARGETS SLOT REPORTING THRESHOLD

n May, President Donald Trump issued an executive order calling for the reform of regulations that could hamper the nation’s economic recovery. The American Gaming Association saw an opening to right a decades-old wrong. The AGA and other gaming industry representatives had called repeatedly for a modification of the IRS reporting threshold on slot-machine jackpots. Any wins of $1,200 or more automatically lock the machine up, with play to resume only after the player has filled out IRS Form W-2G. The jackpot is then reported as income, and the player receives a 1099 form listing the income for the year’s tax return. The player’s only recourse at that point is to file win-loss forms from the casino to show that he or she recorded gambling losses at least equal to the win. Casino operators have consistently complained that stopping play is a detriment to casino earnings, particularly in the case of their best players, who might generate several of these reports in the course of a typical session on a $100 or other high-denomination machine. On top of that, the AGA has pointed out that the $1,200 threshold has been unchanged since it was instituted in 1977, and complained that if the threshold is necessary, it should be updated to the equivalent of $1,200 in inflation-adjusted 2020 dollars—$5,000. As Trump seeks to get the economy restarted after months of idleness due to the Covid-19 shutdown, unnecessary regulations that hamper economic recovery have been among his main targets. The AGA was quick to respond, issuing a statement asserting that the executive order should apply to the slot jackpot reporting threshold. “As the gaming industry safely reopens and seeks to return to financial health, one critical area of regulatory reform the administration should consider is modernizing the $1,200 slot jackpot report-

Global Gaming Business JULY 2020

ing threshold,” said Bill Miller, president and CEO of the AGA, in the statement. “The current threshold is outdated and imposes significant compliance burdens on both the IRS and the gaming industry.” The statement went on to note some of the operational and efficiency burdens of maintaining the $1,200 threshold. “Because the threshold hasn’t tracked with inflation, there has been a significant increase in the number of reportable jackpots, causing more operational inefficiencies and adding to the sea of W-2G forms currently flooding an under-budgeted and understaffed IRS each year,” the statement said. Last year, Democratic Nevada Rep. Dina Titus and Republican Illinois Rep. Darin LaHood also called for an increase in the reporting threshold. And four years ago, the AGA successfully quashed an IRS attempt to lower the reporting threshold to $600.

ARISTOCRAT REPORTS FIRST-HALF PROFIT, SETTLES LAWSUIT

ustralian slot supplier Aristocrat Leisure Ltd. reported net profit of AUD1.31 billion (US$856.6 million), up 27.2 percent from the prior-year period, the result of a deferred tax asset. The profit was boosted by an income tax benefit of AUD925.2 million. Aristocrat said that, group-wide on a normalized basis, its profit after tax was AUD305.9 million, down 14.2 percent from a year earlier. In a statement, the company also confirmed the suspension of its dividend amid the Covid-19 pandemic. In a separate announcement, Aristocrat revealed that it has agreed in principle on a settlement of two lawsuits in Washington state concerning its social game subsidiary, Big Fish Games. The lawsuits related to the manner of commercial use of certain intellectual property under the Big Fish Games brand, which Aristocrat acquired for $990 million from Churchill Downs Inc. in 2018. Aristocrat will pay $31 million as part of a $155 million settlement, with Churchill Downs paying the remainder. Plaintiffs Cheryl Kater, Suzie Kelly and Manasa Thimmegowda claimed the online social gaming platforms “Big Fish Casino,” “Jackpot Magic

Slots” and “Epic Diamond Slots” offered certain products that were actually games of chance, of a type prohibited under Washington state law. In the two lawsuits, the plaintiffs were seeking on behalf of themselves and a nationwide settlement class: return of monies lost; reasonable fees for the work of attorneys; injunctive relief; and treble and punitive damages, among other things, said Aristocrat officials.

INCREDIBLE TECHNOLOGIES LAUNCHES SLOT SPACING SOLUTION

lot supplier Incredible Technologies (IT) recently announced the launch of the Universal Jumbo Edge (UJE). The latest addition to its hardware lineup is designed to assist casino operators as gaming floors across the nation are reconfigured with new social distancing measures in mind. The UJE features a combination of two award-winning slot merchandising and signage solutions—the patented mounting technology of the Simple Sign Kit, and the flexible configuration philosophy of the Infinity Edge. The simple design provides maximum flexibility, allowing the UJE to fit within any vendor’s bank configuration on the casino floor. The UJE is available in two different versions. The “Base UJE” easily mounts onto any existing game base, while the “Cylinder UJE” comes equipped with a unique curved stand that can create any number of new configurations. Both versions can support either a portrait or landscape display and the height and depth of each display can be adjusted for the perfect fit. As commercial and tribal casinos reopen their doors after Covid-19, many are electing to remove games or reconfigure back-to-back banks to more accessible pod configurations, in an effort to provide socially distanced and safe gaming experiences. The new spaces these options create can easily be filled with the UJE solution.

TRANSACT LAUNCHES SAFETY PRODUCT

rinting solutions supplier TransAct Technologies Inc. has launched Epicentral Clean2Play, a printer accessory that provides real-time printed proof that a slot machine has been cleaned, sanitized and is ready for play. Epicentral Clean2Play builds on Acres 4.0’s

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Clean Machine product, which detects when each gaming machine’s play session ends and instantly dispatches a staff member to sanitize the game. Once sanitization is complete, Epicentral Clean2Play causes the gaming machine to print a Clean2Play certification ticket, which the casino cleaning staff member then places on the machine or directly over the machine’s bill acceptor. Before the next play can begin, the cleaning voucher will be removed from the slot machine, allowing casino guests to see that the slot machine is certified as clean. Slot players will look for machines with the Clean2Play ticket before beginning their play. The Epicentral Clean2Play system utilizes parts of TransAct’s Epicentral promotional system, which provides casinos with the printing function while also giving them the ability to customize the clean-ticket voucher their slot machine players will see. This voucher can include a sanitization message, the cleaning staff member’s name, machine ID and a time stamp of when the cleaning occurred. As part of the Epicentral Clean2Play system, casinos can also incentivize their employees by printing a second voucher once the slot machine is cleaned to give the cleaning employee the chance to win prizes and validate their performance. At any time, casinos can upgrade the Epicentral Clean2Play to a fully functioning Epicentral promotional system.

seedingsovereignty.org/mask-drive. The site reads, “Masks offer significant protection against the spread of Covid-19 in indigenous communities especially at risk in remote and underserved regions.” Gary Platt responded, sending hundreds of masks to Seeding Sovereignty, and called for the gaming industry to join the fight. CEO Joe Esposito said, “We recently converted part of our Reno-based factory to create face masks, and we are honored to be able to help Native American people in need. We hope the gaming industry will join us in this ongoing fight.” Previously, Gary Platt donated a generous supply of masks to Reno’s Renown Regional Medical Center.

ANALYSTS: SUPPLIERS TO COMPETE FOR SMALLER FLOOR

s the industry’s suppliers seek to make up lost revenues after the months-long industry shutdown due to the Covid-19 pandemic, they face an uphill battle, because there will be fewer slot machines and table spaces as reopening casinos seek to

guard the safety of customers and employees, according to an investor note from Union Gaming Securities LLC. “We fear that less floor space post-reopening will lead to incrementally more competition for floor space and hurt supplier pricing power even further,” wrote Union analysts John DeCree and Sam Ghafir. “While the market largely expects reduced product sales, the risk to leased fees and participation rates is still unclear.” The note singled out leading slot supplier IGT, which posted a net loss of nearly $248.3 million for the first quarter of 2020, compared with a $40.3 million profit in the corresponding period a year earlier. “With casino operator budgets now constrained, IGT’s management has taken on multiple initiatives to preserve cash and weather the storm,” the analysts wrote, but added that they are “confident” that measures announced by IGT to cut costs, amend its revolving credit facilities and loan agreements, and end dividends—in combination with the group’s $2.2 billion of liquidity—“should provide ample resources to weather the storm and cover its modest near-term debt maturities.”

GARY PLATT DONATES MASKS TO NAVAJO NATION

asino seating supplier Gary Platt Manufacturing has donated hundreds of masks to the organization Seeding Sovereignty’s mask drive to help multiple Native American communities in New Mexico.

The Navajo Nation has been disproportionately affected by Covid-19, reporting 2,304 cases per 100,000 people. By way of comparison, the state of New York reported 1,806 cases per 100,000 people. On its website, Seeding Sovereignty has a page dedicated to Covid-19 response as well as a call for mask donations at

JULY 2020 www.ggbmagazine.com

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PEOPLE ‘CASINO KING’ STANLEY HO, FATHER OF MACAU GAMING, DEAD AT 98

tanley Ho Hung Sun, the Hong Kong billionaire who was instrumental in building Macau’s gaming industry into the largest in the world, died May 26 at Hong Kong Stanley Ho Sanatorium & Hospital. He was 98. Over the last 20 years, Ho’s casino empire contributed as much as half of the Macau government’s tax receipts. His far-flung business interests dominated the territory’s economic life in travel and transportation, banking and retail, construction, hospitality and parimutuel betting. For decades, Ho was one of Asia’s richest people, with a personal fortune estimated at HK$50 billion (US$6.4 billion) in 2018, according to the South China Morning Post. He was a philanthropist of renown who contributed billions of dollars to various institutions and charities in Hong Kong and Macau. His name appears on 12 museums, hospitals and sports facilities in the two cities, and he was the only living person to have a street in Macau named after him. When China opened to the West in the 1980s, Ho became an influential figure on the mainland as well, and cemented his relationship with the central government by benevolent gestures, such as donating bronze animal heads looted from the Summer Palace in Beijing during the Second Opium War. Ho was a controversial figure as well, targeted repeatedly by international law enforcement for his reputed affiliation with Hong Kong’s organized crime families, the triads. Ho was never charged with any wrongdoing, but the taint followed him in his attempts to extend his gaming empire into Australia and North America. Ultimately, it didn’t matter. In Macau, Ho was known as the “Casino King.” His Hong Konglisted Sociedade de Turismo e Diversões de Macau held a government-endowed monopoly on gambling in the city from 1962 until the territory reverted to Chinese sovereignty in 1999 and the monopoly was dismantled in 2002. Ho was able to set up two of his children in the business. Pansy Ho Chiu King would go on to inherit control of Hong Kong’s Shun Tak Holdings, the umbrella company for most of her father’s interests outside gaming, and was installed as a major shareholder of MGM China Holdings. Lawrence Ho Yau Lung partnered with James Packer, son of

Australian media and casino magnate Kerry Packer, in the purchase of Wynn’s subconcession. That led to the formation of latter-day gaming powerhouse Melco Resorts & Entertainment. Both Pansy Ho and Lawrence Ho are now billionaires in their own right.

CASINO EXECUTIVE LEGEND BUCKY HOWARD DIES

illard “Bucky” Howard, a respected gaming executive who helped launch Atlantic City casinos, died May 16. Howard inspired a generation of casino executives who today are Bucky Howard leaders in the industry. His contemporaries in Atlantic City included Jim Allen, Phil Satre, Steve Hyde, Mark Etess, Peter Boynton, Marc Schorr, Arte Nathan, Rudy Preito, Roger Wagner, Dennis Gomes and many others were instrumental in the success of Atlantic City in those days. Although he cut his teeth in the casinos of Nevada—his father was the surveillance manager at Binion’s Horseshoe, and they were both good friends with Jack Binion—it wasn’t until he arrived in Atlantic City that Howard began to shine. Like Steve Wynn, who employed him as the first casino manager at the Atlantic City Golden Nugget, the Boardwalk brought out the best in Howard. He later worked at the Tropicana, Showboat and Trump’s Castle and Taj Mahal. According to an obituary published in the Las Vegas Review-Journal, Howard was “the Pied Piper of Atlantic City as everyone who wanted to be somebody in the casino business wanted to be like Bucky.”

LOUISIANA OUSTS GAMBLING BOARD’S JONES

hock waves reverberated in Louisiana last month when state Senator Karen Carter Peterson, chairwoman of the Louisiana Democratic Party, forced the resignations of Louisiana Gambling Ronnie Jones Board Chairman Ronnie Jones and Ernest N. Morial Convention Center Board President Walt Leger III, a former state representative. Both men had been appointees of Governor John Bel Edwards, who appointed Lieutenant Colonel Mike Noel of the Louisiana State Police to replace Jones. The action occurred as the state Senate held a private session to consider 700 appointees by Edwards to his cabinet and dozens of boards and commissions. It left the gambling board without a

chairman as Jones was overseeing the reopening of the state’s gambling industry. Peterson has had gambling problems in the past and is on the selfexclusion lists of both Louisiana and Mississippi. “It was a total surprise to me,” Jones said of the ouster. “After the Senate had adjourned, I got a call from a staffer with the Senate and Governmental Affairs Committee. He said, ‘I have to tell you that you were not confirmed.’ I said, ‘Excuse me?’ He said it again, and I said, ‘Wow.’” He added, “This isn’t how I anticipated 46 years of state service wrapping up. I respect the process, but I don’t think it serves the citizens of the state very well.” Peterson used an uncommon procedure allowing senators to block the appointment of an individual who is a registered voter in their district. Traditionally, senators give the governor or appointee advance notice if they have concerns, but Peterson did not do that for Jones, Leger and nine other Edwards appointees she blocked. Coincidentally, Peterson is on the self-exclusion list for casinos in Mississippi and Louisiana.

TBE ARCHITECTS’ LINDA ROE RETIRES

fter a career in architecture spanning more than 50 years, Linda J. Roe has announced that she will retire from her position as vice president of client development at TBE Architects. According to a statement from TBE, “Our dear friend and colleague decided that she is ready to move on to the next phase of life, spending more time with her grandchildren and exploring personal interests.” Roe has been instrumental in establishing and maintaining client relationships for the firm, especially those in the gaming industry.

GGB

July 2020 Index of Advertisers

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JULY 2020 www.ggbmagazine.com

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CASINO COMMUNICATIONS

Sara Slane Founder, Slane Advisory

hile credit goes to New Jersey politicians Ray Lesniak and Chris Christie for pushing the landmark Supreme Court decision that overturned the Professional and Amateur Sports Protection Act (PASPA), part of the credit must go to Sara Slane, then vice president of the American Gaming Association, who led the organization’s efforts to support the lawsuit. Slane was effective and convincing in her arguments and, in the end, the campaign was successful. Slane now runs her own consultancy for organizations looking to bring legal sports betting to new jurisdictions or get into the business. She spoke with GGB Publisher Roger Gros from her home in June. The full podcast of this interview covers how sports leagues, teams and others are taking advantage of legal sports betting, as well as overviews of states where legislation is pending. Access it at GGBMagazine.com.

GGB: We just passed the second anniversary of the repeal of PASPA, certainly a landmark in the casino and sports businesses. What does it mean to mark this second anniversary of the repeal?

Sara Slane: I feel like the gaming industry has kicked the door open now on sports betting. I definitely feel like this has moved a lot faster than anyone had anticipated, certainly with states enacting legislation. And with that there’s been a huge discussion now—really understanding how it works, the benefits of legalizing sports betting, and tremendous growth now for the industry. And so it’s been incredibly exciting to be a part of it. Of course the coronavirus threw a real curveball to the sports betting industry, with the shutdown of all major sports around the world. Do you believe there’s a real pent-up desire for bettors to get back into action?

Yes, without a doubt. And even during that time when sports around the world essentially shut down, some very creative stopgap measures were put in place. Who would have imagined that we 66

Global Gaming Business JULY 2020

would create a whole new market around table tennis? But I think that there is, without a doubt, a huge pent-up demand. Now being able to be back to the typical sports people bet on, it’s going to be interesting to see the numbers that come out as a result. Because I think everyone was looking for some entertainment when they were locked in their homes. Since the introduction of legal sports betting, the dominant sports betting companies have been the same companies that were leaders in daily fantasy sports: DraftKings and FanDuel. Did the casinos understand that this was a possibility when the AGA was pushing this bill? Was there any indication that they would become so dominant so quickly?

That’s a tough question. Certainly FanDuel and DraftKings are dominating the marketplace right now. And at the time, when we were looking at PASPA, they were in the daily fantasy sports sphere, but they did quickly pivot to offer legalized sports betting. It’s a question that comes back to regulations, honestly. On one hand, the industry has kept out a lot of competition because of the high bar of regulation and how hard it is to cross that threshold, and how expensive it can be. On the other hand, there have been some complaints that it’s not really led to a lot of innovation. DFS was in this massive gray area for a couple of years. And they did the work, they legalized DFS and were continuing to operate. Casino operators had known for years that this could be a potential opportunity. It’s a doubleedged sword; I get it, on both sides. I’m empathetic to the fact that the casino operators feel like they were sidelined from an opportunity to participate in a gray market with daily fantasy sports. I also understand from the daily fantasy sports side, when they were shut down, they did all the work they needed to do to legalize it, and took advantage of the sports betting opportunity that came along.

Another thing that happened really quickly— more quickly than people would have thought— was the spread of mobile sports betting. In New Jersey, within a year, 75 percent of the market came from mobile devices. Did you think that would happen so quickly?

Not at all. I’m not surprised that mobile has overtaken retail sports betting, certainly given the locations of retail operations in New Jersey and the easier accessibility of mobile in the state. No, I wasn’t surprised. That’s where the customers are, that’s where the industry should be heading, and I think that that will continue to happen in other states. One of the goals of legal sports betting was to eliminate illegal offshore sports betting operations. This hasn’t happened to the extent that the AGA wanted. Do we need to concentrate on this to really get rid of illegal sports betting?

We had long said that the most effective way to shut down the illegal sports betting market is to have the most competitive legal sports betting market out there. But in order to compete with the illegal operators, you’re going to have to have a good regulatory model in place and a good tax structure. That’s going to empower that operator to thrive and offer good odds to compete with the illegal market. I think that truly is going to be the way that you’re going to shut it down. Are there other simple tactical things that should be happening right now? Absolutely. Legitimate media companies that have deals with gaming operators should not be taking advertising dollars from illegal operators. I think the leagues have done a good job at educating their owners about illegal markets and illegal advertising, and preventing them from taking money from any of those websites. There’s always going to be a struggle with law enforcement, and getting them to pay attention to go after illegal operators… so that will always be a challenge. But, all in all, I think that the most effective way to do it is to be able to compete with it, and empower the operators to do that.

Strength in Numbers

More than 170 member companies from 22 countries Nearly $21 billion in direct revenue • 61,700 employees 13 publicly traded companies • ONE POWERFUL VOICE Address worldwide industry regulatory and legislative issues • Discounts on major trade show booth space Promote responsible gaming initiatives • Updates from influential global industry leaders Advertising discounts in leading industry publications • Educational partnerships benefiting students and members Visibility in AGEM’s print advertisements • Exposure for publicly traded companies in the monthly AGEM Index Join AGEM today and work together with the world’s leading gaming suppliers. Marcus Prater, Executive Director +1 702 812 6932 • marcus.prater@agem.org Tracy Cohen, Director of Europe + 44 (0) 7970 833 543 • tracy.cohen@agem-europe.com Connie Jones, Director of Responsible Gaming +1 702 528 4374 • connie.jones@agem.org Design & photo-illustration by Jeff Farrell.com • AGEM and charter ESP member since 2007.

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Global Gaming Business, July 2020

Articles inside

Tribal Reboot

Skill’ and Money

F2P and Sports Betting