Global Gaming Business, December 2021 by Global Gaming Business

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CONTENTS

Vol. 20 • No. 12

december

Global Gaming Business Magazine

COLUMNS

34 COVER STORY Platform Pleasure

10 AGA Keeping Our Word

GAN’s addition of Coolbet gives it a complete sports betting and iGaming platform that allows its clients to stand out in a competitive B2B online gaming field. Years of experience in the U.S. market give the company the edge over new entrants to the business.

Bill Miller

12 Fantini’s Finance Inflating Investments Frank Fantini

45 Making My Point

By Roger Gros

Breaking the Mold

On the cover: Dermot Smurfit, the founder and president of GAN

Roger Snow

DEPARTMENTS

FEATURES 16 The Millennial

40 Advertising

Dynamic Casino marketers are only beginning to understand the dynamics of serving the millennial customer, who eschews slot machines, prefers social activities, and is devoted to the smartphone.

Evolution As the casino industry expands to new channels such as sports betting and iGaming, operators should evolve how they advertise their brands. By Julia Carcamo

By Bill Sokolic

46 California Dreaming California lawmakers considering several bills will ultimately determine the nature of the potentially lucrative sports betting market in the state. By Marjorie Preston

20 Trending in 2022 Our annual rundown of the Top 10 trends for the coming year shows that while there are many bright spots and good opportunities ahead, the lingering Covid-19 pandemic will still show its influence. By Brendan D. Bussmann, Roger Gros, Frank Legato, Patrick Roberts, Richard Schuetz, Marek Suchar, Keith Whyte, and Brian Wyman

4 The Agenda 6 By the Numbers 8 5 Questions 13 AGEM 50 Emerging Leaders With Konami Gaming’s Lauren Bates, San Manuel’s Heather Thomas, and Meruelo Gaming’s Andrew Diss

55 Frankly Speaking 56 New Game Review 60 Cutting Edge

52 Sports Betting Futures As New York prepares to launch sports betting and New Jersey’s sportsbooks pass $1 billion in revenue, operators look to new wagering options.

62 Goods & Services 65 People 66 Casino Communications With Kent Young, President, Spin Games

By Dave Bontempo

DECEMBER 2021 www.ggbmagazine.com

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THE AGENDA

Being a Blockhead

By Roger Gros, Publisher

s I get older, there are many things that have become incomprehensible to me, but make perfect sense to others. While much of this is attributable to the way I was brought up, these things just don’t add up. They’re not logical, but it’s probably my fault I can’t grasp them. Let’s start with social gaming. While I get the thrill of gambling—the excitement of the win, the anticipation of a possible win, and the rush of adrenaline that you get—I don’t understand how you can get the same feeling if you aren’t risking anything. I remember a few years ago, several years after the advent of iGaming in New Jersey, the folks at the Tropicana told me that they were making more money from social gaming than they were from online gaming. Now my first thought, which was probably correct, was that they weren’t doing online gaming correctly. But I was truly shocked that these “play for fun” gaming sites were accumulating that much revenue. In fact, in our cover story this month on GAN, the founder and CEO Dermot Smurfit was one of the early proponents that all casinos needed a social gaming link, and of course he was right, judging from the success he’s made of GAN. But how about esports? I come from a generation before video games. I remember being hunched around a Pac-Man game in a bar after my shift as a dealer in Atlantic City in the late ’70s, but that’s about as much as I got into video games. But of course my children and grandchildren are experts at the video games with the various titles of Fortnight, DOTA, Call of Duty, League of Legends, Grand Theft Auto and more. About 10 years ago, I was invited to an esports tournament at the Cosmopolitan in Las Vegas and was amazed that thousands of people would cram into a ballroom to watch people play video games. And that there were actually announcers like the play-by-play types on broadcasts of actual sports, commenting on the action. But since the majority of the attendees were under 21, I couldn’t see how a casino could truly utilize esports as an attraction in a profitable way. Wrong again. So while my amazement at the phenomenon of people actually enjoying watching other people play esports continues to this day, I can now see a path to profitability for casinos, even if it takes a few more years to totally evolve.

Global Gaming Business DECEMBER 2021

Now this one really gets me: NFTs. As it’s explained to me, an NFT, or non-fungible token, is valuable because it can be rare. So non-fungible means that it has unique properties that can’t be exchanged from something else. It’s mostly digital art that is perceived to have some value either because it’s gone viral or it’s a one-of-a-kind item. When I was a kid, I was totally into baseball cards. I had boxes and boxes of them. I traded them, I matched them, I even put them between the spokes of my bike to make a motorcycle sound. I still have my Pete Rose rookie card, whose value had gone up and down more than a yo-yo over the years. I get that collecting NFTs is similar, but it’s not something you can hold in your hand. How can you duplicate digital art millions of times, but not affect the value of the original? If I owned the Mona Lisa, I’d understand that yes, it can be duplicated, but I own the original because it’s a physical item. How can you do the same with an NFT? Yes, I’ve got a long way to go on this one. Something the gaming industry is going to have to confront soon is cybercurrency. This is similar to an NFT because you can’t hold a bitcoin in your hand. It exists in the ether, so how can it have value? I recently was informed that one bitcoin is worth somewhere in the neighborhood of $50,000. That’s a pretty hefty coin. But I guess with the headlong rush into cashless transactions, we’re going to have to find a place for cybercurrency whether I understand it or not. In the same vein, I also have trouble grasping how blockchain works, particularly in the gaming setting. Yes, I understand that blockchain information exists on thousands of computers at the same time allowing us to record transactions in a logical manner, but I’ve also been told that blockchain is very hackable. So how could that work when casinos are already having trouble protecting their data from cyberattacks by teenagers? Oh, and Russians too! Regulators are going to have to come to terms with both cybercurrency and blockchain, and I’m glad I’m not the one who has to explain it to them. Because the older I get, the more I long for the days of simple math and things that I can touch and feel, like cards on a blackjack table or chips at a poker game.

Vol. 20 • No. 12 • DECEMBER 2021 Roger Gros, Publisher | rgros@ggbmagazine.com twitter: @GlobalGamingBiz Frank Legato, Editor | flegato@ggbmagazine.com twitter: @FranklySpeakn Marjorie Preston, Managing Editor mpreston@ggbmagazine.com Monica Cooley, Art Director mcooley@ggbmagazine.com Terri Brady, Sales & Marketing Director tbrady@ggbmagazine.com Becky Kingman-Gros, Chief Operating Officer bkingros@ggbmagazine.com Lisa Johnson, Communications Advisor lisa@lisajohnsoncommunications.com twitter: @LisaJohnsonPR Columnists Frank Fantini | Bill Miller | Roger Snow Contributing Editors Dave Bontempo twitter: @bontempomedia Brendan B. Bussmann | Julia Carcamo | Marie Casias Patrick Roberts | Richard Schuetz Bill Sokolic twitter: @downbeachfilm | Marek Suchar Michael Vanaskie | Keith Whyte | Brian Wyman __________________

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. 1000 Nevada Way • Suite 204 • Boulder City, NV 89005 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 2021 Global Gaming Business LLC. Boulder City, NV 89005 GLOBAL GAMING BUSINESS is published monthly by Casino Connection International, LLC. Printed in Nevada, USA. Postmaster: Send Change of Address forms to: 1000 Nevada Way, Suite 204, Boulder City, NV 89005

Official Publication

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BY THE

NUMBERS

HoLd on! I

t’s always been an issue when casino executives consider raising the hold percentage of their slot machines. The fear is that they’ll lose players who will migrate to another casino where the hold percentage isn’t so high. But can players tell the difference? Two professors from the University of Nevada, Las Vegas, Anthony Lucas and A.K. Singh, recently conducted a study called “The House Edge and Play Time: Do Industry Heuristics Fairly Describe This Relationship?” aimed at determining whether a higher house advantage (identified as “par” in the study) results in higher or lower revenue compared to a lower house edge. Based on modified versions of licensed pay tables from reel slot machines, simulations of play failed to indicate a statistically significant difference in the spins per losing player (SPLP), despite a marked difference in the pars (i.e., 7.9 percent versus 12.9 percent). In other words, within the “100 years of play” simulated for the study, the higher house edge generated a statistically similar number of spins. To reflect a volume of play consistent with frequent gambling, the simulations included results from one to four visits per week, for the equivalent of one year. The level of play was applied to multiple scenarios of buy-in amounts and stoppage-of-play criteria. Most outcomes indicated a negligible decline in SPLP, in spite of the 63 percent increase in the par, or house edge. These results were reproduced from a second pairing of games featuring a 117 percent increase in par (i.e., 4.6 percent versus 10 percent). The outcomes suggested that operators may be overly mindful of the fallout from increased pars. The authors of the study conclude that casinos may be leaving money on the table by failing to raise the par. To download a copy of the study, visit unlv.edu/news/article/ are-casinos-making-right-bet-when-it-comes-slots.

Bouncing Back

Annual Visitor Volume: July 2011 - July 2021

Las Vegas

Annual Convention Attendance: July 2011 - July 2021

Las Vegas

n quarterly reports published by RCG Economics in its “Nevada By The Numbers” section, visitation to Las Vegas is still far short of the historical averages since 2011. In July 2021 only 27 million people had found their way to Las Vegas. Lots of that falloff could be attributed to the disappearance of the meetings and convention business in town. While some of the larger shows are now scheduled to return, very few shows had arrived by July, with the notable exception of Indian Gaming 2021, produced by the National Indian Gaming Association. And while the number of visitors may not have rebounded, the RevPAR (hotel revenue per available room) has almost fully rebounded, giving casino executives and officials with the Las Vegas Convention and Visitors Authority hope that once a full convention slate returns, the visitors and the revenue should follow. To download the full report, visit rcgecon.com.

Global Gaming Business DECEMBER 2021

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NUTSHELL

5Questions John Pappas Founder & CEO, Corridor Consulting

“They

Said It”

“I don’t think a single operator will make money in New York.” —Jay Snowden, CEO, Penn National, on the high tax rate for mobile sportsbooks in New York, and not highlighting the fact that Penn did not receive a license

or more than a decade, John Pappas was the face of legalized online poker in the United States as he led the Poker Players Alliance during a period of the introduction of legal online gaming in the U.S. and a crackdown on sites like Full Tilt and PokerStars following the passage of the Unlawful Internet Gaming Enforcement Act (UIGEA) in 2006. His positive message eventually accounted for 4 million members of the PPA who helped lobby states to legalize online gaming and poker. Today, he’s also helping to promote Idea Growth, an organization founded by attorney Jeff Ifrah to advocate legal online gaming. He spoke with GGB Publisher Roger Gros at G2E in October. GGB: You were involved in the legalization of online gaming, specifically online poker years ago. What was it like in those days? Pappas: I can remember going into meetings in those days and suggesting that the legalization of online

1 2 3 4 5

gaming would be a good thing, and just being met with a chorus of “it’s not going to happen, we don’t want it, it’s not going to happen.” We were standing alone being laughed at by most people. Now I think everyone’s standing together trying to figure it out. There are still holdouts, especially in Nevada. It’s slow to progress there when it comes to digital anything because of the reluctance of some factions to understand this new wave of gaming and consumer interaction. When did you begin to see the shift in attitudes toward online gaming?

I think it was when Caesars and MGM began to get on board. When they began to recognize the potential, things started to change. For Caesars, it was the World Series of Poker. That’s a very valuable brand, and you have to remember that poker was what everyone was talking about in those early days. They knew there were millions of people playing online poker, and how could they monetize this powerful asset they had? This is why you only have online poker approved in Nevada, because Caesars has the WSOP. Poker isn’t as lucrative as online casino in states where both are legal. Why is that?

Poker is a very difficult product on a state-by-state basis. If you have mass pooled liquidity in multiple states, it becomes a lot more compelling. It’s very difficult to have a successful business, both from an operator’s standpoint and a player’s standpoint. One of the great things about playing on the Full Tilt or PokerStars sites back in 2009 was that there were 20,000 people there. If I wanted to play a $2 Sit-AndGo or a $1,000 Texas Hold ’em game, I could do that. Is the legalization of sports betting going to be the conduit to legalizing iGaming in those states as well?

Yes, in most cases. Part of our organizational efforts with Idea is to go into these states that have successful online sports betting and point out that the next evolution of this is online casino gaming. We’re partnering with the casino industries in these states so we don’t come off as being the only ones who want it. States like Michigan, Pennsylvania and New Jersey were smart. They did it all together without piecing it out. It’s going to take an education process to get them on board. I wish I could tell you that all those states that so quickly passed sports betting would be just as quick to legalize iGaming, but I expect it will take a couple of legislative sessions for people to understand the issues. Tell us about Idea Growth and why it was started.

Regulated gaming has changed the face of online gaming and even e-commerce because of KYC, geolocation, the data that you have to understand who a person is, where they are betting, how much they’re betting… You would never have that data available in a bricks-and-mortar casino. So casinos in every state have an interest in iGaming. It’s going to get bigger, and we need to have a unified voice—a way to speak to lawmakers and regulators to make them understand iGaming. Idea was founded by Jeff (Ifrah) and a few others, and now has grown to 30-plus members, everything from the operators to payment processors to geolocation companies, and KYC data centers. We’re all aligned together to get the word out. It’s a very powerful tool.

Global Gaming Business DECEMBER 2021

CALENDAR November 30-December 2: SBC Summit North America, Meadowlands Exposition Center, East Rutherford, New Jersey. Produced by SBC. For more information, visit SBCEvents.com. December 6-8: Race Track Industry Program (RTIP) Symposium, Tucson, Arizona. Produced by the University of Arizona. For more information, visit ua.rtip.org/symposium. December 12-14: NCLGS Winter Meeting, Hyatt Regency, Austin, Texas. Produced by the National Council of Legislators from Gaming States. For more information, visit NCLGS.org. February 1-3: ICE London, ExCeL Centre, London. Produced by Clarion Gaming. For more information, visit ICELondon.uk.com. February 2-5: iGB Affiliate London, ExCeL Centre, London. Produced by Clarion Gaming. For more information, visit london.igbaffiliate.com. February 15-17: World Game Protection Conference, Tropicana Las Vegas. Produced by World Game Protection. For more information, visit WorldGameProtection.com. March 1-4: SiGMA Africa 2022, Nairobi, Kenya. Produced by SiGMA. For more information, visit SiGMA.world/Africa. March 14-16: Casino Marketing Bootcamp, New Orleans, Louisiana. Produced by J Carcamo & Associates. For more information, visit CasinoMarketingBootcamp.com. March 21-22: iGaming Next New York City ’22, The Convene, 46th Street, New York City. Produced by iGaming Next. For more information, visit iGamingNext.com/NYC22. March 22-23: ASEAN Gaming Summit, Shangri La at the Fort, Manila, Philippines. Produced by Asian Gaming Brief. For more information, visit AseanGaming.com.

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AMERICAN GAMING ASSOCIATION

Keeping Our Word Gaming’s recovery is well under way with momentum leading into 2022 by Bill Miller

hroughout this roller coaster of a year, we’ve endured Covid-19 concerns, supply chain disruptions and labor shortages, and widespread economic uncertainty. But through it all, the gaming industry remained resilient, united and determined. At the beginning of 2021, the American Gaming Association set one overarching goal: accelerate gaming’s recovery. While there is still work to do, we are pleased with the results thus far. Commercial and tribal gaming are on track for the best year ever and suppliers’ sales pipelines

“

Despite the challenges 2021 presented, we were able to bring more than 13,000 industry leaders together safely and successfully at G2E for the first time in two years.

”

are filling up. Our latest Gaming CEO Outlook shows industry leaders anticipate continued hiring, wage growth and new capital investment for both operators and suppliers into 2022. In Washington, D.C., the AGA has delivered against our 2021 priorities. We have continued to develop industry champions in the Biden administration and new members in the 117th Congress. With an engaged Congressional Gaming Caucus, we have blocked harmful policies, including new taxes, while supporting Covid-19 priorities like the successful reopening of international travel. The AGA pursued efforts to modernize the regulatory landscape with a specific focus on payments modernization in more jurisdictions. 10

Global Gaming Business DECEMBER 2021

Today, players in eight states and throughout tribal properties have access to payment choice on the casino floor. We also worked with law enforcement to target illegal gambling with gray market machines and sports betting. The association’s role as a convener was on full display as many of us gathered in Las Vegas for Global Gaming Expo 2021. Despite the challenges 2021 presented, we were able to bring more than 13,000 industry leaders together safely and successfully at G2E for the first time in two years. Finally, we advanced the sustainable growth of sports betting. Our promotion of the responsible expansion of sports betting through the “Have A Game Plan. Bet Responsibly” public service campaign is paying off with more than 20 partners and counting. These efforts have helped accelerate our industry’s momentum. As we head into 2022, we’re going to continue our focus on bringing gaming back while building on this strong foundation to advancing new priorities, including: • Championing responsibility in sports betting and engaging all stakeholders to address volume and content concerns related to sports betting advertising and marketing. • Showcasing the commitment and leadership of AGA members in environmental, social and governance (ESG) efforts. • Building industry champions on Capitol Hill and advancing policy priorities in Washington, D.C. by highlighting gaming’s importance to communities across the country. • Growing AGA membership and aligning our diverse membership behind essential industry priorities. We look to 2022 with significant momentum, optimism and strong confidence in our industry’s resilience—a key trait that will continue to see us through any challenge that may arise. Thank you for all your hard work to keep our industry strong. Bill Miller is president and CEO of the American Gaming Association.

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FANTINI’S FINANCE

Inflating Investments At a time of economic uncertainty, where should you park your money?

here isn’t any argument, anymore. We are in a period of significant inflation. How long it will last, how high inflation will rise and where interest rates will go are still being debated. But there is no debate that inflation is a new fact of investing life. And that raises the eternal question: Where should I put my money? One answer: the gaming REITs. The truth is that tangible assets hold their value when money loses its value, whether that be precious metals, commodities, maybe cryptocurrencies in our new age and, of course, real estate. Gaming REITS have three advantages: 1. They pay good dividends. Gaming and Leisure Properties and VICI Properties have respective dividend yields of 5.5 percent and 4.9 percent. Combine with stock price appreciation and it’s a formula to beat inflation. 2. Real estate is an appreciating asset. In times of inflation it’s good to own something that grows in value while money loses its value. Real estate appreciation is especially true in the Las Vegas Valley and along the Las Vegas Strip, and VICI owns a lot of Strip property. 3. Their rents are about as secure as anything can be in an uncertain financial world. That was proven during the Covid panic of 2020. REITs focused on shopping malls, apartments and office buildings had to worry about their rents. VICI and GLPI did not. Casinos paid their rents month after month even as they slashed spending elsewhere. Further, casinos have their own pricing power, and leases are adjusted for inflation. Talking about real estate, Red Rock Resorts and Golden Entertainment own 100 percent of the land their casinos occupy. And they have excess real estate. And they are in booming Las Vegas Valley. And they don’t have to pay rent to a landlord. And, well, you get the idea. There is still a lot to be decided about how the sale-leaseback phenomenon will work out for casinos that have chosen to go asset-light. Getting big wads of cash to invest in growth sounds appealing. But those companies also now have big new ex-

By Frank Fantini

pense lines in rents. And they no longer have an appreciating asset to offset inflation.

YAY, DIVIDENDS… …Was the rallying cry of the late Las Vegas Sands CEO Sheldon Adelson, and in his spirit, dividends might be coming back as companies have cleaned up balance sheets and are generating increasing free cash flow. IGT is leading the way, initiating a 25 cents-ashare quarterly dividend. Others may follow. Two names mentioned above, the land-owning Las Vegas-focused Red Rock Resorts and Golden Entertainment, are in the payout game, too, the former for sure and the latter likely. Red Rock Resorts has announced a $3a-share dividend, an impressive sum that yields nearly 6 percent based on the price of the stock on the day it was announced. That big a special payout might presage a regular dividend later. Golden has all but promised a special dividend in the foreseeable future, with the catalyst being $60 million received from Caesars as a contractual obligation related to Caesars’ purchase of William Hill, which ran Golden’s sportsbooks. These companies aren’t the only ones that have been talking returning of capital to shareholders. Expect to see more stock buybacks and more dividend announcements in 2022.

But the reality is much simpler. Over time, there is only one metric that matters: It’s the profit, Stupid. That reality is setting in on many investors. Penn National and DraftKings stocks, for example, have come well down from dizzying highs that were based on extraordinarily high valuations of revenues projected three and four years out. There also is a growing understanding that at some point costs to acquire players have got to become rational. Some companies have had this understanding all along. Rush Street Interactive has lived by the idea that the goal is profitability and that market share is not an end in itself. The company says its efficient marketing strategy turns customers profitable six months after signing on. Others, such as Churchill Downs CEO Bill Carstanjen, have adamantly proclaimed that, while the company must invest in player acquisition when it enters new markets, the purpose is profitability. Caesars CEO Tom Reeg expects to use the power of the company’s brand and existing relationships with the 65 million players in its database to become profitable at 50 percent margins. Most recently, Wynn Resorts CEO Matt Maddox announced his company’s commitment to rationality, saying on the company’s third quarter investor call: “Competitors are spending too much to get customers. The economics are just not something in which we’re going to participate in the short term…we’re going to be focused on building a long-term business that’s sustainable, that is not losing lots and lots of money.” That is a clarity of message that James Carville can admire.

time, there “isOver only one metric

that matters: It’s the profit, Stupid. That reality is setting in on many investors.

IT’S THE PROFIT, STUPID When Bill Clinton successfully ran for president in 1992, campaign manager James Carville famously simplified the campaign message to his staff by plastering the sign: It’s the economy, Stupid. For those investing in online sports betting and iCasino in the U.S., it is easy to get lost among all the ARPUs and MAUs and market share claims.

Global Gaming Business DECEMBER 2021

”

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 BDO delivers assurance, tax, and financial advisory services to clients throughout the country and around the globe. BDO offers numerous industry-specific practices, worldclass resources, and an unparalleled commitment to meeting its clients’ needs. The company currently serves more than 400 publicly traded domestic and international clients. The gaming, hospitality and leisure industry faces unique challenges, including a complex and dynamic regulatory environment, disruption from online gaming, liquidity issues and workforce concerns. While shifts in consumer demand and digital disruption have impacted the gaming, hospitality and leisure sectors, a successful and strategic rebound can lead to robust growth ahead. Every business should have a complete understanding of the trends and technologies disrupting connections with customers, the impacts on its tax position and how to maximize revenue. Amid changing regulations, digital innovations, changes in consumer demographics and behaviors, executives need real-time insights into when and how these trends affect the bottom line. With a partner like BDO, any company will be better equipped to respond immediately and maintain a competitive edge. BDO has decades of experience delivering guidance and customized solutions to companies throughout the gaming, hospitality and leisure sectors, with technical excellence and superior service. BDO helps gaming operators, casino resorts, leisure resorts, hotels, sports franchises and more address their specific challenges and achieve increased efficiencies, improved business intelligence and enhanced performance. BDO has the longstanding experience and sector-specific know-how to deliver tailored solutions for its clients in the gaming, hospitality and leisure industry. The company provides strategic audit, tax, advisory and digital services spanning the industry. A sampling of BDO’s key segments includes: • Traditional commercial gaming • Tribal gaming • Online gaming (igaming, esports and sports betting) • Gaming technology and manufacturing • Hotels • Sports franchises, leisure and entertainment For more information, contact Tom Donohue, assurance partner, national gaming, hospitality and leisure industry leader at 702-673-1254 or tdonohue@bdo.com.

AGEM Board of Directors Actions for November 2021 • After many months, Executive Director Marcus Prater was pleased to announce to members an agreement has been signed for AGEM’s first worldwide headquarters office at the Black Fire Innovation complex in Las Vegas. The agreement sees AGEM taking residency from February 1, 2022, in time for new Executive Director Daron Dorsey to take up his position on March 1. The new office address is 8400 W Sunset Road, Suite 300, Office 12, Las Vegas, NV 89113. • AGEM members received an in-person update recently from Stephanie Goodman, executive director of the Dr. Robert Hunter International Problem Gaming Center in Las Vegas. AGEM’s partnership with this important organization that provides counseling and treatment for problem gamblers goes back many years, and Goodman spent the first part of her presentation thanking AGEM for its financial support in helping the center stay open during the whole pandemic period. She explained that many people have suffered greatly during this time in isolation and by remaining open, the center has literally saved lives. New initiatives such as the Relapse Prevention Program have been initiated during this period, helping lots of people who have experienced additional stresses and struggled greatly due to the pandemic. Goodman took over the IPGC after the death of Hunter in 2019. She has steered the organization through a challenging period, and it continues to thrive under her leadership and is undoubtedly the No. 1 treatment facility of its kind in the world. AGEM looks forward to continuing its support and working closely with Goodman and her team. • AGEM’s initiative to change regulations in Nevada to allow for cloud-based gaming technology has taken more positive steps forward with Chairman Brin Gibson and Chief of Technology Division Jim Barbee having reviewed draft paperwork without adding any additional comments. With the period of public comment pending, the next stage will see the official petition handed over to the Gaming Control Board for review and action. As a result, it seems likely approval may be granted at the beginning of the new year. With the GCB welcoming any new technology discussions, AGEM is hopeful these moves pertain well for other technology initiatives going forward. • Although it is unlikely casinos will be seen in Japan for a number of years, AGEM is encouraged that the Japan Casino Regulatory Commission (JCRC) continues to hold regular meetings with potential stakeholders. An October 27 meeting in Tokyo regarding technical standards saw many AGEM supplier members participate. The agenda for the coming months covers additional key industry subjects. The November 25 meeting will look at technical standards for non-electronic gaming devices, and the December 22 meeting will discuss gaming manufacturer licenses. AGEM is grateful to Konami’s Ken Kamano, who continues to inform AGEM’s Compliance Committee of any updates, which are then shared with the wider membership.

AGEMindex

In October 2021, the AGEM Index improved by 31.17 points to a new high of 1,077.92, marking a 3 percent increase from the prior month. Compared to one year ago, the index has more than doubled from 495.31 for an annual growth rate of 117.6 percent. In the latest period, a majority of AGEM Index companies reported increases in stock price, with seven posting positive contributions, three recording negative contributions and one seeing no change from the prior period. The largest impact to the index was attributed to Aristocrat Leisure Limited (ASX: ALL). While its stock reported a 0.6 percent decline, Aristocrat added 15.06 points to the index due to an increase in outstanding shares that were used for equity raising to fund a new acquisition coupled with an improvement in exchange rate between the Australian dollar and the U.S. dollar. International Game Technology PLC (NYSE: IGT) was also a significant contributor to the monthly growth in the index, adding 13.82 points as the result of a 12 percent rise in stock price. The largest negative contributor to the index was Scientific Games Corporation (Nasdaq: SGMS), whose 3.6 percent drop in stock price led to a 5.32-point decrease in the AGEM Index. All three major U.S. stock indices increased over the month, with the NASDAQ and the S&P 500 growing by 7.5 percent and 6.9 percent, respectively. Meanwhile, Dow Jones Industrial Average experienced a 5.9 percent increase.

DECEMBER 2021 www.ggbmagazine.com

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ropping DDemographics Initial visitation when casinos reopened during the pandemic skewed younger. Has that pattern continued? By Bill Sokolic

appy birthday. You were born 35 years ago on a brisk November day. You grew up to be part of the first generation to come of age with the internet. You are also part of the first generation tethered to technology. You’re a millennial, the generation born between 1981 and 1996, give or take a year or two. You occupy a particular place in the casino world. To wit: the prospect of you sitting at a slot machine for hours at a clip isn’t likely to happen. Not social enough. Too solitary. Blackjack table, maybe. Craps, for sure—if you can afford it. Which brings up another to wit: you lack the discretionary income to truly make the most out of a visit to a casino resort. Yet another to wit: you want more out of said visit than hanging out in a casino. Dinner at 16

Global Gaming Business DECEMBER 2021

Millennials are more likely to play tables, not slots

Council Oaks Steaks & Seafood at the Hard Rock Hotel & Casino Atlantic City? Yes. A rock concert at the Etess Arena? Absolutely. But you probably don’t gamble enough to earn comps, so you’d have to pay cash. There’s the discretionary income thing again. That about sums up millennials and casinos. But… The millennials were among the first folks who returned to the casinos when they reopened after the coronavirus shutdowns last year. “We saw a younger demographic return faster after opening during the summer of 2020,” Hard Rock President Joe Lupo says. The elderly—that means you baby boomers—were reluctant at first over health concerns. But skewing younger lasted only until vaccines became widely avail-

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Sports betting is an activity that millennials enjoy

able, Lupo says. “We are now back to levels that were consistent prior to Covid-19, in which the millennials make up a small portion of our casino customer.” However small, millennials visit casinos even when confronted with other entertainment options, says Josh Swissman, founding partner of Las Vegas-based The Strategy Organization. “To me, that means that these patrons are here to stay,” he says.

Limited Resources

According to a report, 70 percent of millennials in the U.S. visit casinos with less than $100 to last them the entire night. Most of this money is spent on food, drinks, entertainment, and even travel and accommodations can be a big expense for just one night out at the casino.

Millennials are a huge cohort, so you have to expect some trial and error with casinos both before and after Covid-19, says Cory Morowitz, of Morowitz Gaming Advisors, LLC in Galloway, New Jersey. Again, don’t expect riches. “Since 80 percent of gaming revenue is typically driven by 20 percent of customers, I do not think this cohort is a significant driver of gaming revenue at this time,” he says. But if they have some money to spend, millennials would rather spend it on food and beverage, clubs, and rooms in destination markets, Morowitz says. “They spend about 25 percent less as a cohort than both Generation X—the generation preceding millennials—and baby boomers on entertainment purchases (per U.S. Bureau of Labor Statistics).” Much less, Lupo says. Millennials will spend 25 percent of what a baby boomer shells out. “The spend per player continues to be much higher with an older demographic.” Lupo says. That needs to be considered when factoring in how much to spend to woo this elusive crowd to the casino, Morowitz says. It doesn’t make sense pushing slots on millennials, Swissman says. “Being a more individualized activity, slots do not seem to resonate as much as table games and non-gaming amenities. Electronic table games appear to be especially attractive to this bunch,” he says.

Sports betting may be an even more attractive avenue for this generation. “This is an industry tailor made for this group,” Swissman says, “driven via a mobile device and able to be consumed and utilized in quick, bite-sized interactions. Coupling this interactive experience with the social environment of a retail sportsbook is ideal for the younger crowd because it is mobile technology, highly social, and very shareable.” Millennials’ interest in online sports betting, particularly among males, is fueled in part by esports betting. “They will also bet at brick-and-mortar casinos, but to a much lesser extent than their online activities,” Morowitz says. “The convergence of esports, iGaming and sports betting has spurred significant product innovation in the gaming industry, for both online and at brick-andmortar casinos. Many of the innovations around sports lounges and skill gaming in casinos as well as online platforms are geared to this cohort.” Gaming aside, millennials want to party. Or at least eat at a nice restaurant. “They are very much driven to the nightclubs, day clubs, pools and similar entertainment-oriented amenities,” says Morowitz. “You see this more in destination markets than in local markets, where casinos are still very much geared to an older demographic and where local casinos are typically rejected by millennials.” Without question, this group prefers amenities to gaming, Lupo says. Specifically, music, shows and nightclubs. “Otherwise, I can’t say they are truly being catered to from a casino standpoint. Pricing in the casinos, if you do not receive comps through casino play, is a deterrent until they acquire more disposable income and an affinity for casino gaming,” he says. Morowitz agrees that the spending patterns and consumer activities of DECEMBER 2021 www.ggbmagazine.com

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Nightclubs are a big attraction for younger demographics

this generation will evolve over time. “Millennials spend on convenience,” Morowitz says. “They spend their dollars online, or at local bars and restaurants. If they buy homes or move out of cities to the suburbs, or just get older, their behavioral patterns will change. This will affect their discretionary entertainment dollar. Just think of when baby boomers were young and where they are now. Most bars from our youth have been replaced by Walgreens and CVS.”

When you take into account the thousands of real-money casino apps available in 2020, the choice between leaving the house or heading to the local casino probably speaks for itself.

Trending Up Stockton University in New Jersey last released a study on millennial habits in casinos in 2016. “While the data is now five years old, and the events of recent months have introduced many as yet unknown variables, we should expect some of these identified trends to have persisted to the present day,” says Jane Bokunewicz, faculty director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism (LIGHT) at Stockton University School of Business. Indeed, the study confirmed what experts and casino operators say today: • Slots were less popular with millennials; • Millennials preferred to play with friends than alone; • They would rather spend time and money in nightclubs and bars than in a casino. LIGHT’s recent 2021 Atlantic City Visitor Survey confirmed that younger patrons were among the first to return to Atlantic City. Whereas the resort’s older guests delayed returning or reduced frequency of visits— perhaps out of concern for their personal health—younger guests did not appear to have been as significantly affected. The results showed 37.8 percent of visitors were 35 to 49, which included the older end of the millennial group. The bulk of the 21-34 age group were millennials and accounted for 34.8 percent. Taken together, the 21-49 age range amounted to 64.7 percent of the visiting population, ac18

Global Gaming Business DECEMBER 2021

cording to LIGHT. Visitors 65 and up represented only 5.3 percent. “There is some suspicion that the rapid expansion of online gambling during lockdown has brought new customers into the market, many of them likely younger individuals new to gambling (i.e., millennials). Atlantic City’s casino operators have committed to diversifying their gaming and resort products, and by so doing have brought in new entertainment, nightlife and food and beverage outlets aimed at the millennial consumer,” Bokunewicz says. According to a report, 70 percent of millennials in the U.S. visit casinos with less than $100 to last them the entire night. Most of this money is spent on food, drinks, entertainment, and even travel and accommodations can be a big expense for just one night out at the casino. Maybe they’ll opt for a $10 buy-in on a table game or chance a few coins on the slots, but they’re unlikely to get any more adventurous with their bets than that, the article says. When you take into account the thousands of real-money casino apps available in 2020, the choice between leaving the house or heading to the local casino probably speaks for itself. Many of the games found in landbased casinos are games based entirely on chance. Slot machines, roulette and blackjack might sound like easy and appealing games to play for someone in, say, their 40s, but a big proportion of those under that age are more used to playing games based on strategy and skill. The millennial generation is the first to have grown up with video games, so their way of life has become one of the reasons for developing online gambling. To attract and retain the attention of young players and avoid their games becoming a boring alternative to others on the market, operators created products that borrow features from video games. Millennials lived in unstable economic conditions and are therefore notable for their rationalism. As a result, they prefer more affordable entertainment, including activities which do not involve leaving the house.

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10 Trends

2022

for

As the industry continues to recover from the Covid-19 pandemic, leaders look forward to new revenue streams

ith the December issue of GGB, as always, we look ahead to the major trends the industry is likely to experience in the coming year. Last year, of course, was different than any previous year, thanks to the Covid-19 pandemic and subsequent industry shutdowns. The pandemic continues to cast a shadow over any future predictions for the gaming industry, as many jurisdictions around the world continue to struggle to recover visitation and travel restrictions remain in place. Two of the trends we analyze in the coming pages are particularly reliant on those restrictions easing. The Chinese government continues to strictly regulate visitation to Macau, which is likely to struggle for some time before regaining its status as the world’s leading gaming jurisdiction. In Japan, the continuing pandemic keeps bumping back the time when planned integrated resorts will launch, and which operators will end up building them. Another major effect of the pandemic has been a shortage of qualified

Global Gaming Business DECEMBER 2021

workers, many having failed to return to their jobs as casinos reopened. Meanwhile, many positive trends can trace their momentum to the pandemic shutdowns—particularly sports betting, iGaming and the move toward cashless gaming across many worldwide gaming jurisdictions. We include an examination of how the rapid expansion of sports betting could potentially trigger a backlash if responsible gaming measures are not secured. And in cashless gaming, the regulatory community is key, as operators work toward offering patrons cashless options. Other bright spots for the coming year include esports, which continues a meteoric rise in popularity and in betting opportunities; distributed gaming, which has been a stable sector consistently and could be poised to grow in many states; and the recovery of the U.S. casino industry to levels exceeding pre-pandemic business. The past two years have seen unprecedented challenges for the casino industry. Here, in our view, are the key factors in meeting not only those challenges, but new opportunities.

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1 Some of the Plexiglas barriers at table games remain in place, reminding players to socially distance

Beating the Pandemic

t’s been a long nightmare shared by the world. Covid-19 impacted every corner of the world, but industries that depended upon people traveling, attending or participating were hit hard. The casino industry experienced unprecedented circumstances that included shutdowns, gaming floor redesigns and operational changes that will long survive the pandemic as it winds down. The recovery has been spotty around the world. In Asia, the impact continues. Casinos in Australia only recently reopened after at least 18 months shuttered. In New Zealand, casinos opened and closed several times, as even one case of Covid caused the government to reinstate draconian lockdowns. In the Philippines, capacity limits were only lifted last month to more than 50 percent, and development of new casinos in Cebu and possibly Boracay remained on hold. Cambodia was one of the early success stories during Covid. Authorities closed the borders and avoided the spread of the disease by instituting a “watertight” quarantine-on-arrival system. But even that system broke down, and casinos became the epicenter of Covid spread earlier this year, particularly in Sihanoukville. Macau casinos reopened after closing for a month in early 2020. But the impact of the pandemic lingers to this day as the governments of China and Hong Kong continue to strictly control border crossings. Quarantines were necessary until just recently, and new Covid cases caused Macau authorities to twice implement testing for every resident and visitor to the SAR. Macau revenues have plummeted and still are on life support. And all this is playing out as the Macau government considers how the concession renewal process will proceed. European casinos were of course heavily impacted, but the degree was differ-

ent in each country. The United Kingdom opted for almost a year of closures, while in a country like Sweden, which imposed few restrictions on its citizens, casinos remained open unless a Covid breakout was present. Today, most European casinos have reopened, but restrictions remain, depending upon the country. Canada was a country that locked down its borders and imposed strict controls on travel and access to businesses. While each province was different, most Canadian casinos remained closed until just recently, as the borders reopened only to fully vaccinated travelers. In the U.S., “two weeks to stop the spread” became at least three months. Leading the way when casinos reopened was tribal gaming. In many cases, tribal gaming is the only revenue stream for tribal governments, so reopening safely was essential. They became the model for the reopening of commercial casinos across the country, including Plexiglas barriers, widespread sanitation, and social distancing on the casino floor. And once the casinos did reopen even with capacity restrictions, revenues came roaring back. U.S. casinos have now equaled their 2020 revenue numbers in the first three quarters of 2021. The silver lining of the pandemic was the increased revenue of online casinos in jurisdictions where they are legal. In New Jersey, online revenue doubled and tripled during the lockdown, and once the Atlantic City casinos reopened, online revenues continued to climb. Sports betting was legalized in many states as well during this period, and revenue records were set month after month. Today, many states are now considering legalizing online gaming to avoid losing the entire gaming tax base, should another pandemic arise. —Patrick Roberts DECEMBER 2021 www.ggbmagazine.com

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10 Trends for 2022

Esports and Esports Betting Surge in the U.S.

sports are a type of sport where electronic systems facilitate the primary aspects of the sport. Both the input and output of the esports system as well as that of the players and teams are mediated through human-computer interfaces. Esports are competitive video gaming, both amateur and professional. They are often organized by multiple leagues, ladders, and tournaments. Players usually belong to teams or other organizations that sponsor them. Esports has been one of the fastest-growing forms of media in recent years due to the increasing popularity of online games and broadcasting technologies. In 2021, esports were watched by more than 474 million people. Six years ago, that number was only 70 million. The figures in the U.S. are also increasing exponentially. This is attracting major interest from esports-centric end-to-end betting solutions such as Oddin.gg. Venture capitalists and, more recently, private equity firms have invested significantly in the industry. Esports teams are just like professional sports. They have owners, franchises and endorsement deals. Cash prizes can also be won from tournament wins. Their total revenue and valuation are affected by all of this. Forbes reported that TSM was the most valuable organization in esports, valued at $410 million as of 2020. Cloud9 is second at $350 million, while Team Liquid comes in at $310 million. Esports leagues are likely to resume their efforts at expanding their audience by hosting live game play with regional teams in an esports format that is more similar to traditional sports leagues. According to most projections, the esports industry will surpass $1 billion in annual revenue this year. NewZoo predicts that revenue will grow to $1.8 billion by 2022. Mobile will be the future of esports. This will reduce entry barriers and allow more fans and gamers to play. Mobile gaming will account for 45 percent of all global games sales this year. This popularity is already affecting some competition spaces with the creation of new leagues in the U.S. at high schools, colleges and cities across the country. Live streaming is a key factor in the rise of esports. Esports reached a turning point in 2010 when access to broadcast technology at the consumer level and platforms like Justin.tv (later Twitch) allowed events of all sizes and scope to grow beyond their regional boundaries. The thrill of these experiences attracted a larger audience, and soon concurrent viewers of broadcasts became the measure of success. Because streaming is an intrinsic part of the esports ecosystem, developers need to think about the possible impact of esports when creating competitive games. Esports games must be entertaining for both players and viewers. A game must be simple enough for all levels of competitors to stream in order to maximize its reach. Global Web Index research shows that 53 percent of Gen Zers (defined as people born between the mid-1990s and the early 2010s) identify themselves as sports fans. This compares to 63 percent of all adults and 69 percent of millennials. Gen Zers are twice as likely as millennials not to watch live sports and half as likely to do so regularly than they are to never. This is partly due to their attention to esports. Gen Z is more interested in esports than MLB, NASCAR, and the NHL, with 35 percent of them identifying themselves as fans. Explains Becky Harris, former chair of the Nevada Gaming Control Board and an adviser to Oddin.gg, “As the popularity of esports continues its meteoric 22

Global Gaming Business DECEMBER 2021

With millions of fans around the world, the popularity of esports represents a golden opportunity for wagering

rise, continues to become more integrated in cultures around the world, and regulated sportsbook operators continue to explore ways to incorporate wagering on competitive play into their wagering options, more contemplation and consideration needs to be given to the potential of esports.” The relationship between the world of esports and sports betting is getting closer, and this is due to the professionalism of the former. If a few years ago video game sports were reserved only at a social level, now there are more and more professionals who live from this. The championships have gone from a regional area to being of a global nature, while the prizes have already accounted for millions of dollars. This growing interest in esports has also attracted the attention of the sports betting sector. The houses already see the esports modalities as safe and reliable to offer games in their market. If there are millions of fans who follow it on the internet and they are absolutely professionalized championships, there is no reason to avoid this offer in sports betting. Users can make their forecasts, both before each game or during the course of it. In fact, live betting is the most popular, as it generates double excitement and tests the capabilities of players. Nevada, New Jersey and Tennessee are the only states that completely allow esports betting. Esports betting is also regulated in certain states. This means that there are restrictions and rules, but it is not illegal. Esports betting in the states of Arkansas, Delaware, New York, Iowa, Illinois, Michigan, Rhode Island, Montana, New Mexico, Oregon and Pennsylvania is legal and regulated. This all leads to the conclusion that esports will continue to be an integral part of the sporting scene for many decades. This implies that esports betting would be accepted by a large segment of the population, much in the same way as traditional sports betting. The U.S. has a long history of sporting excellence. NFL and NBA data and interest show that there is a huge market that could be open to esports alongside traditional sports. Many U.S.-facing betting sites already offer local bettors a mixture of esports and classic sports betting. This means that esports betting in the U.S. could be a major global phenomenon. The U.S. has more than 160 million gamers and is, therefore, the secondlargest gaming market. American publishers and developers of games like Riot Games and Epic Games have helped to create some of the most prominent players in competitive gaming. In addition, esports betting sites in the U.S. have started to capitalize on the growing popularity of esports betting and cover all important tournaments and games. Although the foundation is in place, there are still many untapped opportunities. —Marek Suchar is CEO of Oddin.gg, a company dedicated to streamlining esports betting.

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10 Trends for 2022

Stability in the Routes

he distributed gaming sector traditionally has been one of the most stable in gaming. Machine routes in eight states have produced reliable returns over the years for what is a relatively small group of route operators. Of course, like every other sector of the industry, distributed gaming was disrupted by the Covid-19 pandemic. In fact, the routes were disrupted more than the traditional casinos in the largest distributed market, Nevada. While slots in casinos were idle around three months, route operations in bars were shut back down, and remained idle until October. “The state of Nevada enacted a rule that no one could sit at a bar, or play a game at a bar,” says Blake Sartini II, senior vice president of distributed gaming for Golden Entertainment, one of the largest distributed operators in the nation with more than 11,000 machines on routes in Nevada and Montana. “With 70 percent-80 percent of our distributed games located in bars in Nevada, that definitely hurt.” Sartini says the operators didn’t encounter the same problem in Montana, which was back up and running by May 2020, and since Nevada reopened, business rebounded, and has even experienced organic growth—a combined effect of population growth in Nevada and an influx of current slot players who were nervous to return to crowded locals casinos. “Southern Nevada is seeing a record number of California residents move into town, and we are seeing a significant number of those people show up at our taverns and sign up for our rewards card,” Sartini says. “In distributed gaming, we are the great outlet for anyone moving into the state.” He adds that the operator also saw organic growth in Montana, where the route market has remained stable. Illinois has been another stable market for distributed gaming, although the competitive balance changed this year when Accel Entertainment, the largest route operator in the state, was acquired by Century Gaming, Inc., Golden’s closest competitor in Nevada and Montana. Century operates around 8,500 machines in Nevada and Montana and has added more than 12,247 machines Accel operates in Illinois—around a third of that market. Sartini says Golden maintains a license in Illinois, and is always open to opportunities to establish a footprint there. “We consistently look at opportunities in that state,” he says. “We have a license at the ready and available to use if and when we find the right opportunity.” While all the route operators should see sustained growth in existing markets next year, all are heavily involved in lobbying efforts to expand the market beyond the current routes in Nevada, Montana, Illinois, Oregon, South Dakota, West Virginia and Pennsylvania—the latter a very small market consisting of six-machine operations at truck stops.

Global Gaming Business DECEMBER 2021

Sartini says the best opportunities for new distributed operations within the coming year are in Pennsylvania, where bar and tavern owners have long pushed for VGTs; and Missouri, where there have been VGT bills active in every legislative session for several years. “We have been working in Pennsylvania for five years, and Missouri’s got a game plan,” Sartini says. “We’re hoping to at least get a bill through committee in the upcoming session, and hopefully get it to the floor for a vote.” He adds that there is continued discussion on VGT bills in Virginia, North Carolina and other states, where the route operators maintain lobbying efforts. In addition to educating lawmakers on the benefits of distributed gaming, those lobbyists in many cases are working against the interests of compa-

“While we’re working against the illegal skill game operators, these small businesses need some help amid all the turmoil they’ve been through, and VGTs/distributed gaming can solve that—just in a regulated manner.” —Blake Sartini II, Senior Vice President of Distributed Gaming, Golden Entertainment

nies that have placed unregulated “skill games” in those states. While Virginia instituted a ban on the unlicensed games effective July 1, Wyoming passed a bill legalizing them. In Pennsylvania, casinos and lobbyists continue to wage a battle to eliminate more than 20,000 of the skill games spread across the state. There has been some backlash to skill-game bans from small businesses that benefit from the revenue those unregulated games generate, but Sartini says that backlash should provide an opportunity for legitimate distributed gaming. “While we’re working against the illegal skill game operators, these small businesses need some help amid all the turmoil they’ve been through, and VGTs/distributed gaming can solve that—just in a regulated manner,” he says. Meanwhile, the established distributed gaming markets will keep chugging along. “We are always focused on expansion and growth in other markets, but we have a very successful existing business right now,” Sartini says. “It has gained a lot of momentum over the last 12 months, and we feel we can use that momentum and the operational nuances we have put in place to help us be in a better position in 2022.” —Frank Legato

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4 Asian Recovery or More of the Same?

Crowds are sparce in Macau as border crossings are strictly controlled by China, Hong Kong and other countries

eading into 2020, it looked as though the gaming world would continue on its track of expansion in Asia. Macau was two years out from concession renewal. The Philippines was seeing strong growth in gaming and tourism. Jurisdictions such as Cambodia, Vietnam and others were seeing strong growth in their existing facilities with new projects being announced along the way. Yet, it was shortly after the start of that year that the world began to change, and change rapidly. Macau initially shut down for two weeks, and the rest of the world soon followed with what still remains for many jurisdictions that are in Great Shutdown mode. Gaming revenue evaporated quickly. Timelines for expansion disintegrated. Concession renewals in Macau were put in limbo other than a two-year extension to put all of the concessionaires on the same timeline for renewals. Heading into 2022, there are just as many uncertainties as portions of Asia finally began to reemerge from nearly two years of lockdown. One of the overarching issues as one looks at the Asian market with a focus on southeast Asia, and specially Macau, is understanding these markets are fueled by the flow of visitors in and out of China. The country still believes in a zero-Covid policy, which has kept the flow of visitors from Guangdong exceptionally slow at times and limited visitation to nearby Macau. A disappointing Golden Week along with Macau implementing mandatory testing for a period of time did not bode well for the last quarter of 2021, and news that the Hong Kong border would be open “by June” as stated in November is less than optimistic as the world’s largest gaming market tries to regain its prowess. There are two other hindrances to an early recovery that stem at the root of Beijing’s control over the flow of Chinese tourists in and out of the country. The first of these is the hosting of the 2022 Winter Olympics in Beijing in February. China wants to make sure this goes off without a hitch, and that will include making sure that the number of Covid-19 cases does not flare up. The only way that happens is if they keep the country in lockdown mode. The second is China’s policy toward gaming in general and the mysterious “blacklist.” President Xi Jinping clearly believes that gaming breaks up the “social harmony” of China. He has used the pandemic as a tool to further solidly this position with a supposed backlist that would ban Chinese visitors from certain jurisdictions that the PRC finds to be exploiting visitors by luring them to participate in gaming. While it is still unknown who is on this list, the reach is far and has wide implications—from preventing citizens from visiting certain areas to

the recent arrest of over 140 individuals that were illegally marketing for Tigre de Cristal in Vladivostok. The challenges for Southeast Asia, and any other jurisdiction that relies heavily on Chinese tourists, is not only when they may return, but if they will be allowed to return at all. Some of these outposts will continue to have some traffic because of settlements of Chinese nationals in these countries to support the Belt and Road Initiative. However, some of these jurisdictions may not see the return and, in some cases, might not be able to use the same tactics with junkets to allow customers and gaming dollars to flow in and out of the country. With all of these challenges on the horizon, gaming will start to materially recover closer to the second half of 2022 as the world reopens. Granted, one new variant of the virus could cause another shutdown, but countries and individuals are realizing that the world cannot shut down forever. As 2021 closed out, the gaming industry started to reopen in key Southeast Asia markets as capacity constraints and borders have started to reopen. This will bode well for markets including Cambodia, Vietnam and the Philippines that have struggled through most of the last two years. It likely means that these markets will continue to rebound and likely start to see some of the expansion that was sought after two years ago, before the pandemic began. The biggest item that will bring some clarity through 2022 is the concession renewals for Macau. While there are still many questions that need to be answered, renewals for all operators seem more likely than they did when the process was initially launched in the fall of 2021. However, the conditions and process to achieve these renewals may make it difficult for the market to return to its previously held records. The challenge will be to find a path forward that allows operators that have invested billions of dollars into a market to continue to operate in a manner that benefits all parties. As the world watches what will happen in the largest gaming market in 2022, significant opportunity lies across all of Asia along with the potential risks that remain for the industry should parameters change. —Brendan D. Bussmann is a partner and director of government affairs with Global Market Advisors (GMA).

DECEMBER 2021 www.ggbmagazine.com

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5 For the Love of the Game

Caesars Entertainment bought the sponsorship rights to the New Orleans Superdome, home of the NFL’s Saints and the site of many Super Bowls

ports betting has dominated the gaming industry’s attention over the last several years, and its emergence with the repeal of the Professional and Amateur Sports Protection Act in 2018 became a particular bright spot in 2020 as to go to the game? Caesars even recently purchased the naming rights for the Supercasinos were impacted by Covid-related closures and capacity constraints. Indome in New Orleans, a first-of-its-kind deal in the U.S., reminding fans and even deed, even while major worldwide sports were sidelined, we saw heavy wagerdaily commuters who see the stadium signage to place their wagers at Caesars ing volumes (and increased online viewership) in Japanese sumo wrestling and Sportsbook. Russian table tennis. The sports betting boon has bolstered not only gaming Generally, sponsorships often also include (limited) use of the team’s intelleccompany financials but those of teams and leagues. tual property, such as logos and other creative, providing the operator a boost in Once among the fiercest opponents of sports betting, teams and leagues credibility as they push ad campaigns through social or traditional media channels. have developed a newfound love for the industry and the opportunities that The operator also gets unprecedented access to the team, which may include such sports betting provides for further monetizing their product. Mark Cuban reallowances as arrangements for casino VIPs, celebrity appearances at parties hosted marked upon the repeal of PASPA that the by retail sportsbooks, or even potentially unique movalue of all sports franchises doubled overnight, bile betting menu options authorized only within the Teams, and leagues by extension, stadium or arena. and in the more than three years since, we have seen partnerships between teams and sportsDespite all of this, only very recently have teams are in the business of delivering books, leagues and sportsbooks, and combinaand leagues taken the final integrative step—actively content to fans. They monetize the tions that can even include media giants such as offering betting themselves or at the arena. Besides content in three main ways: direct sports betting revenue, in-arena venues typically have NBC, CBS, ESPN, Sinclair and others. The nuance of these deals can be incredibly sales and sponsorships at the sta- access to food and beverage availability and merchancomplex, but the concepts driving them are indium or arena; digital viewership, dise, and they are open for business even on non-game credibly simple. Teams, and leagues by extendays, again expanding the team’s ability to generate primarily on television, which sion, are in the business of delivering content to revenue. William Hill opened the first in-venue sportsfans. They monetize the content in three main book at Capital One Arena in Washington, D.C., and stations monetize through ways: direct sales and sponsorships at the stasince then Rivers has followed suit in Pittsburgh’s PPG advertisements; and brand dium or arena; digital viewership, primarily on Paints Arena, among others that have been announced. and merchandise. television, which stations monetize through adArizona took this a step further in 2021, when legvertisements; and brand and merchandise. Sevislation passed that allotted 20 sports betting licenses eral studies have linked sports wagering to increased propensity for game in total, 10 reserved for tribes and 10 reserved specifically for professional teams and viewership and increased duration. In other words, when you’ve got a bet on leagues. The Phoenix Mercury (WNBA), the Phoenix Raceway, the Arizona Cardithe game, you are more likely to watch and watch until the end. Increased nals, the Arizona Diamondbacks, the Phoenix Suns, TPC Scottsdale, and the Ariviewership translates to increased value of the ads, which in turn means that zona Rattlers (indoor football) have all announced sports betting partners, and teams can charge more for the broadcast rights. many offer or plan to offer betting on-site. Sports team partnerships were called out Teams also command seven-figure sponsorship deals from sports betting specifically in the New York sports betting license applications, and we can expect operators that are creeping toward eight figures for exclusivity in some marto see these partnerships expand in scope over time. kets. Notably, these partnerships are not only for the biggest of leagues. The Looking ahead to 2022 and beyond, particularly with the team-friendly result Premier Lacrosse League announced a deal with DraftKings, the LPGA cut a achieved in Arizona, expect to see teams actively engaged in the pre-legislative deal with BetMGM, and PointsBet signed a deal with the Colorado Buffaloes, process, wielding their considerable resources and leverage with politicians to effect a college team. Besides any cash infusion the team or league might receive, a policy decisions favorable to their interests, whether they are looking for licensure or partner sportsbook focusing on a menu of betting options specific to the team simply the ability to offer sports wagering in a co-branded lounge within the venue. or league has the capacity to increase interest in and viewership of games, The teams’ and leagues’ considerable political influence and fiscal wherewithal, which has tangible benefits in all of the team or league’s monetization efforts. coupled with their existing partnerships with both casinos and media companies, Meanwhile, the sports betting operator benefits greatly from these deals as can make them either a critical ally or a formidable foe in adopting legislation that well. Most pressingly, the operators are paying for physical and digital signage balances the diverse viewpoints of casinos, sports betting operators, and other releat the stadium or arena, resulting in high-quality ad impressions from fans— vant entities. after all, who is more likely to bet on a sporting event than someone who paid —Brian Wyman is a partner at The Innovation Group. 26

Global Gaming Business DECEMBER 2021

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States that legalized sports betting often set debut dates around the start of the football season rather than when the regulations were finalized and in place

Fixing the Regulations “Chaos is a friend of mine.” —Bob Dylan

he first significant attempt to regulate gambling in modern times was undertaken by Nevada in the mid 1950s and intensified in the early-to-middle 1960s. It was done, arguably, to protect the industry from itself. Accusations concerning inappropriate conduct, primarily by the suggested presence of organized crime members, had made Nevada’s gaming industry the target of the federal government, and there were concerns in the state that this drama would not end well. The response was to build a regulatory agency to act as a moat for the industry in its drive toward legitimacy. By and large, the Nevada regulatory model developed in response to this threat worked. Not only did this system allow gaming to be sustainable in Nevada, but it created a brand that proved suitable to export to many of the states of the United States in the decades that followed. Over the last few years, the gaming industry in the U.S. has undergone the shock of adapting to a new delivery system for gaming products—namely, the use of the internet. This has been primarily evidenced by a rapid legalization of mobile sports betting in many states and with a lessor adoption of iGaming. As mentioned, the most threatening problem the gaming industry had initially in Nevada was with organized crime. In today’s regulatory environment, we seem to be embracing something that is not necessarily crime, but it is certainly very unorganized. If there is a trend to all of what is going on in the United States with respect to the regulation of gaming, it is that the regulators are overwhelmed. The agencies are understaffed and underqualified to handle much of what is taking place. Moreover, the politicians are not helping. In state after state, the launch date of sports betting is set to meet the demands of the sporting calendar, such as to be open by March Madness or the start of the NFL season. These launch dates should be established by one measure, and that is when the regulatory infrastructure is in place and the regulators are ready. Essentially one-third of the states that have expanded gaming through internet products have done so without addressing the issue of potential gambling harm to consumers. Issues that have plagued places like Tennessee, Washington, D.C., Oregon, and the efforts evolving in New York (to mention just a few) certainly will not be listed in any “best in category” awards, at least in the near future. One obvious problem with the regulatory entities is that the staffs of these organizations have very weak benches, or no bench at all, as to understanding the complexity of sports betting. This is easily understood, for in most states the regulators have no experience in regulating sports betting. Moreover, most 28

Global Gaming Business DECEMBER 2021

agencies are staffed by brick-and-mortar regulators who do not necessarily understand all of the many details and nuances of delivering gaming products in a virtual world. Countering the notion that what you don’t know can’t hurt you, there is a tremendous gap in the understanding of the importance and operation of artificial intelligence in shaping the interactions between the betting operators and the consuming public in this new world of betting in the U.S. In addition, especially in the higher levels of many of our agencies, there is not much depth in data analytics, and in the virtual world, this is a knowledge and skill that touches on the entire marketing ecosystem as well as on the ability to detect fraud, money laundering, and problem gambling (to mention just three). It is also the case that the leadership in many of our agencies do not possess the necessary backgrounds and skill sets necessary to understand the reality of what they are now expected to regulate. If all of this isn’t enough of a challenge, it seems there are now concerns that address advertising. I live in Pennsylvania, and have noted as I was watching a series of gaming advertisements that this sequence was briefly interrupted by the news. There has been some use of the bully pulpit by people in authority to address this issue, but if one understands game theory, this certainly will not work. And if we believe it is an appropriate role of the government to tell a business how often it can communicate with a market, we are entering into a whole new world of slippery slopes for the bureaucrats. The point is the major trend in regulation right now is it is overwhelmed. It needs more and better assets, and this takes time and money. It also takes patience. I believe this goal could be obtained if we had a bit more adult supervision, and unfortunately this seems in short supply in the modern world of gaming. A few steps in the right direction would be to be less concerned about the apparent needs of the operators to achieve immediate world domination. We need to keep politicians away from our gaming agencies and allow them to feather their government pensions somewhere else. Regulatory agencies are not rest homes for termed-out politicians or those who lost an election. We need to pay our regulators real money, and we need to recruit talent that possesses the skill sets that are relevant to the industry that we have today. In short, we need to become alive to the necessity of building our regulatory agencies for the industry we have, not the industry we had. —Richard Schuetz is a former casino executive, regulator and educator, expert in all things gaming.

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Go Big or Go Home

he biggest trend in responsible gambling for 2022 will be nationalization. Historically, each state government and regulatory agency set their own responsible gambling requirements, with little if any coordination between other states or even among different verticals within the state. Most gambling operators also traditionally viewed consumer protection from a state-based perspective. This has led to our current patchwork of responsible gambling regulations, which has long been difficult to navigate for consumers. This state-by-state approach to responsible gambling in national broadcast, worldwide streaming and global social media increases costs and creates barriers to help. However, the rapid expansion of sports betting across the country, the largest and fastest in our history, will also lead to the nationalization of responsible gambling programs. The blitz of sports betting advertising during league broadcasts requires a national responsible gambling approach. Many states specify the use of their own state-specific help line numbers which were created decades ago. So gambling ads have to list dozens of state helplines to be in compliance. Callers who may be in crisis have to pick the right number out of dozens (in tiny font on screen for mere seconds) or they end up at the wrong state help line. Fortunately, the National Council on Problem Gambling’s National Helpline number instantly and automatically connects callers to the help line call

center in their state—just as 911 instantly and automatically connects callers to their local police emergency line. A number of regulators have recently adopted rules allowing operators to use the National Helpline number on ads in their states, but more than 20 states retain their antiquated requirements. Many other responsible gambling services are ripe for a national approach. Consumers who have a gambling addiction and want to self-exclude have to sign up with hundreds of different programs, in many cases traveling to the casino or sportsbook to sign up in person to exclude themselves from that very location. This may actually increase the risk of relapse. Advocates are working to create national-level consumer-centric approaches to responsible gambling that will increase accessibility, improve compliance, raise awareness, boost efficiency and decrease barriers to life-saving services for people at risk for gambling problems and their families. —Keith Whyte is executive director of the National Council on Problem Gambling.

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As the new year begins, the three current finalists of Osaka, Wakayama and Nagasaki are assembling their area development plans that are due in April 2022.

Japan Crosses The First Finish Line

ith the Olympics being a made-for-TV event, Japan was never able to achieve its tourism goal of reaching 40 million visitors in 2021. Looking back on 2021, the total foreign visitor volume may only amount to roughly 30,000. While border restrictions are starting to relax to a three-day quarantine, Japan has only seen 25,900 visitors through the end of October. Japan has a new prime minister, Fumio Kishida, who recently just secured the hold that his party, the Liberal Democratic Party, has on the Lower House of the Diet that will ensure that IRs remain on track as the country begins to loosen its restrictions from the Great Shutdown. Japan, which has one of the highest vaccination rates in the world, will need to have IRs become a catalyst as it looks to restore and build upon its pre-pandemic tourist volumes. With the Olympics in the rearview, IRs remain the single biggest opportunity for tourism and further investment in the country. The concept of IRs began to develop over 20 years ago, and 2022 presents itself as the year for meaningful progress in the market to begin the building and procurement for these iconic structures that will become economic engines for the country. The question that remains is how the three current frontrunners to host IRs will get their process to the finish line. As the new year begins, the three current finalists of Osaka, Wakayama and Nagasaki are assembling their area development plans that are due in April 2022. This is now six months behind schedule from the original deadline because of the pandemic that continues to be a menace across the world, among economies that remain shuttered as well as those that are reopening. At the beginning of 2020, no one likely would have foreseen these three cities as the finalists for the three initial licenses in Japan. Heading into 2022, the question becomes whether all three will be chosen in the end. The overall process became much less driven after the demise of Yokohama’s initiatives, which left investment and tax revenue on the table without having an IR in the Kanto region, the largest and most heavily populated in Japan. The Tokyo metro area continues to offer the most interesting potential opportunity as Japan’s largest population center, but remains out of the mix. This also leaves out several top-tier operators that had an interest in the Kanto region but either opted out of the Yokohama market or were left behind in the process as it fell apart in August 2021. One of the

Global Gaming Business DECEMBER 2021

The election of Fumio Kishida as prime minister means Japan will stay the course and continue to develop the integrated resorts that they hope will attract millions of tourists

biggest questions is whether these operators such as Genting, Melco, Galaxy, Las Vegas Sands or Wynn are able to get back into the race should another site become available. Osaka and its partnership between MGM Resorts and Orix seem to be set for approval. In Nagasaki, the process had narrowed to achieve their selection in Casinos Austria, and there is now a potential fallout from the two losing bids and their claims against a fair process. On the other hand, Wakayama, which is located in the neighboring prefecture to Osaka, surprised many earlier in 2021 with the announcement of Caesars as a partner. Not only was this a surprise as Caesars had taken international development out of the mix previously, but it brought further legitimacy to the Wakayama bid by having a world-renowned brand along with a solid team in Global Gaming Asset Management and Clairvest. The Japan opportunity still poses some risks as the market rolls out into the future. With the current state of geopolitical dynamics that are associated with the market, it remains to be seen whether the market will reach its potential when the first IRs open in 2027 or beyond. The pandemic continues to take its toll on the global economy, but the longer lasting geopolitical climate, specifically in Asia, makes this more interesting. Next year looks as though Japan will finally reach its first milestone in the selection of licensees. Japan remains the best announced market opportunity for the gaming industry. While the market still has its challenges ahead, the opportunity for the next phase of integrated resorts remains strong. While questions remain on whether all three current contenders will be chosen or if there will be opportunities for others to enter, look for 2022 to be the next chapter as gaming finally starts to move forward in the land of the rising sun. —Brendan D. Bussmann is a partner and director of government affairs with Global Market Advisors (GMA).

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9 Breezing Toward Cashless

hen it comes to casinos and technology, the regulatory community hasn’t always been the most expedient. For years after slot machines went digital, the queue in state-operated approval labs was ridiculously long; it took the advent of private labs to solve that problem. When cash has been involved, there also is a history of cautious regulation—many jurisdictions outlawed ATM machines on casino floors, for instance. However, when it comes to removing cash-handling from casino floors, the opposite has been true. Twenty years ago, the removal of coins from slot machines happened with blinding speed as regulators swiftly approved ticket-in/ticket-out technology. Everi is just one company that has designed Now, the removal of cash as the primary method its cashless payments system with an eye of payment on the casino floor looks like it will occur toward the concerns of regulators If there is one trend just as smoothly. Operators and casino customers have to identify with been anxious to put systems in place to enable cashless and contactless payment options on the casino floor respect to the since the pandemic lent new urgency to the goal. Suppliadvent of cashless “Governments love cashless gaming because everything can ers of cashless technology report that the regulatory comgaming, it is that its be tracked, and that has major implications on issues ranging munity has recognized the need to implement cashless options as well, and so far, applying new cashless techadoption promises from accounting to problem gambling. I feel confident that casinos nationwide will be able to offer players a convenient and fun nology in casinos has been, from a regulatory standpoint, to accelerate cashless experience in the very near future. Cashless is something smooth sailing. wanted by everyone—players, operators and regulators.” in 2022. “IGT’s experience with regulators as it relates to the “The rise of cashless solutions in the industry inevitably inadvancement of cashless gaming has been overwhelmcreases the risk of fraudulent behavior, creating the need for ingly positive and collaborative,” says Ryan Reddy, the strong account-level security and anti-money laundering (AML) supplier’s senior vice president of global product manpractices,” agrees Christopher Justice, president of Global Payments Gaming agement for VLT, poker, systems and payments. Solutions. “As an industry leader, Global Payments answered that call by en“They recognize and embrace the value of future-forward technologies gineering VIP Mobility to provide additional layers of consumer protection such as Resort Wallet and IGTPay, and are committed to facilitating opporat the game and elsewhere while working within existing gaming regulations tunities to responsibly introduce these products in casinos.” IGT is rapidly to provide the most secure cashless ecosystem in the industry.” deploying its digital wallet system and payment gateway to customers using If there is one trend to identify with respect to the advent of cashless the IGT Advantage casino management system. gaming, it is that its adoption promises to accelerate in 2022. Acres Manufacturing has experienced similar regulatory smooth sailing “I anticipate we’ll see continued expansion of cashless gaming in 2022, with its Acres Wallet product, which works within the Foundation CMS and especially as gaming operators in major gaming markets such as Nevada deinterfaces with other CMS products to add cashless functionality. ploy it more widely,” says Reddy. “IGT has several exciting deployments “Acres Manufacturing is currently working on cashless deployment with scheduled in multiple states for H1 2022, and we have been aligned with regulatory bodies in 11 states,” says Noah Acres, chief operating officer of regulatory entities throughout the process of implementing our solutions.” Acres Manufacturing. “To date, regulators have been extremely enthusiastic, —Frank Legato helpful and accommodating on this issue.

Global Gaming Business DECEMBER 2021

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10 The Great Resignation

he pandemic had many impacts on gaming, but the most insidious has ride, they’re going to take it,” he believes. “But I think a majority of folks had time been the difficulty in bringing back your employees and replacing those off and some of their basic needs were being met, but then they started reflecting who didn’t come back. It’s an issue that’s not specific to the casino industry, on what was important to them, and what they really needed to survive.” but it’s one that is difficult to solve and remains a drag on the recovery from But what happens when your employees begin to come back, but the effect of Covid-19. the pandemic lingers? Employees may begin to think there might be a better job Dubbed by the media as the “Great Resignation,” the employment crisis out there, particularly when competitors are desperate for workers. What will preis real and growing more desperate by the day. vent them from leaving? John Ceresani is a principal at the Pharos Group, a human resources con“How do employers relate to folks to get them back in the workplace after sulting group with many gaming industry clients. A former HR executive at they’ve gone through this?” Ceresani asks. “It’s going to take real leadership to figthe Claridge and Caesars Atlantic City, he recognizes the problem is complex. ure out how to do this. You’ve got to convince people that your organization val“It’s a challenge,” he says, “but it’s no different than any other industry. ues them and they’re working for something bigger than themselves. UnThe pandemic has brought up a lot of psychological issues with workers that fortunately, the larger companies just aren’t connecting with their people.” have changed the way people look at the workplace.” Older workers are more likely to consider retirement, but lots of workers who With casino closures starting at a minimum of don’t return are younger. And Ceresani says three months and stretching even today to almost there’s a reason for this. two years, Ceresani says the individual workers may “Millennials get a bad rap,” he insists. all have different reasons on whether they return to “They work hard, especially if they love work. what they’re doing. But they have to be en“The numbers of people who have left the workgaged if they’re going to do it. It has to place without getting another job is astounding,” he mean something to them. They’re not says. “It comes down to how they felt about the going to dummy up and deal, like we did place they worked prior to the pandemic. Did they in the old days.” value their people? Was it a great working environMany companies resorted to bonus ment? If you were on the right side of that, maybe offers for new employees, and Ceresani says you didn’t get hurt so badly. Your employees would that’s a viable strategy but needs to be just have had a positive feeling about going back. But if part of an overall plan. they weren’t, and they had a chance to get a time“Bonuses aren’t going away anytime —John Ceresani, Principal, Pharos Group out during these very difficult times, maybe they soon,” he says. “That’s the natural tendency don’t want to go back. When you’re working 60-70 to look at money as the solution. It’s part of hours a week you don’t have time to reflect on what the short-term solution for sure. You want might be better for you, but now you’ve had a chance to see what life was like to get people to come in and start to work. The challenge is making them stay. without that stress. Maybe it’s not what you want anymore.” Sure, you can bribe people to take a job, but if they hate that job, it’s not going to Ceresani says the time to think also stirred ideas of self-sufficiency. work in the long run. That’s the danger for employers. Turnover costs money. Whether it’s stepping back and figuring out how to retire at an earlier age, or “There should be a strategy about how you bring them in and connect them taking the chance to build a business on their own, it also played a part in the to something they can appreciate. Enlightened companies will appreciate their decision to return to work or not. employees and treat them very well.” “People retiring at an early age is also a reality now,” he says. “And some But if you didn’t consider your employees’ needs during the pandemic, you of them are starting their own businesses, finding a niche in their own world. might be playing catch-up, says Ceresani. Maybe they thought their talent was not valued at their workplace so now “During the pandemic, the Hard Rock in Atlantic City showed their employthey’re going to take the shot they’ve been putting off for so long.” ees they were valued by giving them something to help them get by—gift cards for Many state governments extended unemployment benefits for months groceries, and other things. They were thinking ahead to these problems. Casinos even after businesses began to reopen, but Ceresani doesn’t believe that was a that didn’t recognize that these problems were happening probably didn’t do so big factor in decisions about the workplace. well in bringing their people back.” “Yes, it impacted a segment of society that figure if they can get a free —Roger Gros

“When you’re working 60-70 hours a week you don’t have time to reflect on what might be better for you, but now you’ve had a chance to see what life was like without that stress. Maybe it’s not what you want anymore.”

DECEMBER 2021 www.ggbmagazine.com

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The Preacher For more than a decade, GAN’s Dermot Smurfit urged U.S. casinos to maximize their online presence, and now his company is at the forefront of B2B success in the “(Simulated gaming) is an North American market incredibly important strategic tool By Roger Gros

ince the advent of legal sports betting in the U.S., lots of European B2B companies have attempted to bring their technology and know-how to the states. And lots of them have had success because the groundwork they laid in Europe has paid off in the U.S. When operators wanted to find a technology that would power their ideas, the tried-and-true formula that worked in Europe often worked on this side of the pond, as well. But often, those European companies took time to get accustomed to the U.S. way of doing business. Whether it was confusing regulations, strict AML and KYC requirements or simply the “I need it yesterday” rush of the U.S. businessman, it wasn’t always easy to predict how those business relationships would evolve. Unless you’ve been there before. When Dermot Smurfit arrived in the United States more than 10 years ago with his Game Account Network, his goal was simple: Convince enough U.S. casino companies that they needed to establish a social gaming presence to prepare for real-money online gaming that Smurfit knew would arrive on their shores eventually. But even today, Smurfit says the simulated gaming, play-for-free component is a big piece of what GAN has to offer.

Global Gaming Business DECEMBER 2021

in our armory. It is something that generates, renders, and delivers to the typical retail casino patron, an iGaming-esque experience that effectively allows the retail casino operator to move online and start accumulating a database.” —Dermot Smurfit, CEO, GAN “It’s an incredibly important strategic tool in our armory,” he says. “It is something that generates, renders, and delivers to the typical retail casino patron, an iGamingesque experience that effectively allows the retail casino operator to move online and start accumulating a database—start building that all-important, incredibly valuable database of your patrons who want to play online. “So, you’re taking preemptive action, preemptive steps, to protect your retail casino patrons. And if you don’t develop the online community now, and build the online database now, you won’t be ready when iGaming comes, or even when online sports betting comes.” GAN also is able to merge their social media platform with the loyalty programs of the casino clients. “We were the first guys to do it back in April of 2012,” he says. “We did it for Maryland Live! and

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the Cordish Group. We switched on a free-to-play website that was connected with a casino management system and reward card. Because we were the first company to do it publicly, we’ve licensed it a couple of times, for very considerable amounts of money. “This reflects the worth of players to a U.S. retail casino operator who correctly, logically, wants to connect the retail rewards account and retail rewards card, held by their retail patron, with the online gambling experience and the online gambling account, held within an online gambling system. We connect the rewards cards to the online gambling accounts and everything flows from that relationship. The money gambled online, whether that’s for real money or simulated gaming, drives the issuance of reward points.”

Slot Success GAN recently announced exclusive arrangements to offer the games from Ainsworth and Incredible Technologies on its platform. The deals add to the content acquisition strategy devised to increase GAN’s fast-growing share of existing iGaming revenues from B2C operators who are not already clients of GAN. GAN will immediately begin deriving online content licensing fees from Incredible Technologies’ existing online operations in New Jersey. As a result of this long-term deal, GAN’s combined exclusive online slot partners’ content represented approximately 7 percent of all slots sold in the U.S during 2020. Smurfit says the deals just grow the influence and perception of GAN in the U.S. “We have the leading distribution here in the U.S., for online casino content,” he says. “We’ve got an incredible number of operator integrations and platform deployments. We are the largest online casino here in the U.S., really, if you think about it in super-simplistic redundant terms. We have an extraordinary amount of activity every single day, across all the states; we launched in West Virginia at the beginning of May—a very exciting launch for us there—as well, getting FanDuel’s online casino up and running. “And so, what I think has been under-appreciated by EGM slot machine manufacturers is not so much the complexity of turning a physical slot machine into an online game, but actually the distribution, the plumbing, the piping, the integrations that have to be done between something called a remote game server—which is just a black box filled with games—and the integration of that RGS with all the different operator platforms that are out there: GAN, Scientific Games, whoever is using whichever platform.” Smurfit puts the deals with Ainsworth and Incredible Technologies into the same bucket. “These deals have allowed GAN and these two pretty significant manufacturers of very well-respected gaming experiences here in the U.S. to focus on what they do best, which is get the games ported, get to scale, concentrate on their tech resources, not on the plumbing, not on the pipes, but on the

content,” he explains. “So you’ve got cost-efficiency, so that the manufacturers are spending their time and energy focusing on the kind of basic blocking and tackling of turning a physical slot machine into an online playable game. Because scale really counts. Ainsworth has done a great job; they’ve got 85 games playable, completed. I think 70-ish are actually out there, operational, in one of the states. But they need to get that portfolio up to 200, which is part of their obligation. “So the truth is that it lets our manufacturer partners be a lot more efficient, a lot more cost-efficient, time, resource-efficient. And everybody wins. GAN wins because we get to integrate with pretty much every B2C operator platform that’s out there already. And anyone who isn’t a client of our platform, we’ll pick them out as a client for our content. And secondarily, Ainsworth wins and our clients win, because they’re focused on simply getting their 85 games up to 200 games. And the dynamics are very similar for Incredible Technologies.” Smurfit credits the opening of iGaming and sports betting in Michigan as a milestone for the company. “We had three operator clients go live in our platform on day one in Michigan,” he says. “That was a huge technology deliverable by our team, and I was incredibly proud of everybody for making that happen for all of our clients. In no other state have we had three operators at the starting line, every one of them with the same online casino portfolio, and we were able to spend a lot of time looking at the relative performance of all the individual games in these online casinos. And for the first time, it gave a very fair evaluation opportunity, where we could say, ‘Hey, do retail slot machines in America really out-perform slot games that were designed in Europe and transported across the Atlantic, and popped up on a website?’ And the answer was yes, comprehensively. “Then we started offering some very clear financial performance metrics, that were balanced, fair, and calculated with reference to all the actual data as Michigan ramped up very, very quickly. Not only do retail slots perform financially, on a per-unit basis, but they’re also extremely important in lowering the cost of acquisition for our clients.” When GAN extended simulated gaming to sports betting a few years ago, he says the response was amazing. “We were amazed at the activity during that NFL season on fake money sports gambling,” says Smurfit. “The average bet was 53,000 fake dollars. We wondered what was happening, but they were behaving that way because we’re the only company that can show you what’s happening with real money sports betting, by comparing what’s happening with fake money sports betting. And we saw the same number of bets versus a typical DECEMBER 2021 www.ggbmagazine.com

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“This system allows the marketing team to properly segment and target those customers and retain those customers. That is a huge differentiator for us—the flexibility of the system for an operator to have a full suite of tools at their fingertips, but they don’t have to keep bouncing between multiple platforms. It’s all on unified platform.” —Rob Lekites, Vice President, GAN Sports

average bet of real money—$50, $60, $70 per unique individual sports bet, depending on which operator brand you’re talking about. But we saw the same level of engagement and utilization during the NFL season and all the key matches and events that took place during that season.” Industry veteran Rob Lekites, who was brought in from Twin Spires to run GAN Sports, says simulated sports betting will help GAN’s clients prepare for the real thing. “When we go into a market where gaming is not legal, for example, in California—we have a lot of social gaming customers—we’re continuing to grow up that customer base there,” he says. “Our customers are building a digital customer base. There’s a lot of crossover from social gaming to sports and especially from social gaming to casino. When you build that social gaming site, you get the digital brand out there, and then when sports comes and we flip that switch, there’s a lot of crossover. That’s why our social gaming customers are very important to us—because there is an opportunity for us to leverage those relationships, to continue to build on them.”

Cool Acquisition As sports betting became a larger part of the online gaming market in the U.S., Smurfit went on a global quest to find the best sports betting technology, which led to the acquisition of the European-based Coolbet after an exhaustive search that started when GAN went public. “From the onset of our IPO we have continued to enhance and perfect our internet gaming software-as-a-service solutions for the U.S. market,” he says. “As a part of that growth strategy, we have been clear that we needed to add a best-in-class sportsbook engine to round out our real-money iGaming platform, and we believe Coolbet is the perfect fit for both GAN and our customers. Coolbet launched in early 2016 in a hypercompetitive online market in Northern Europe and subsequently expanded into Latin America and Canada over the last two years. Since its launch, Coolbet has proven that its sportsbook offering is one of the best in the market today. “Coolbet’s award-winning user interface and proprietary technical platform will enable us to quickly introduce the sportsbook offering to our landbased casino customers across the U.S., who need a flexible and customizable solution to online gaming. Coolbet brings one of the most experienced teams of engineers in the industry, and their technology is built on a similar architectural design as our own, which is anticipated to make the integration process fairly seamless. “Additionally, Coolbet is more than just the best sportsbook platform we vetted during our process. Coolbet has a well-established global business, a strong and loyal B2C customer base, and a diversified revenue stream. They 36

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are expert marketers and have grown their top-line over 46 percent in highly competitive and established markets in Northern Europe, Latin American and Canada. We will not only achieve scale and diversity across our revenue streams through this combination, but we also see a strong opportunity to leverage Coolbet’s expertise and relationships in other markets where our industry-leading B2B SaaS platform can be deployed.” The technology of Coolbet is what convinced Smurfit it was the right choice. “If you’re going to buy just a pure-play B2B tech company in Europe and then bring it into the U.S.,” he says, “it’s only one part of the jigsaw puzzle. And it’s a complicated jigsaw puzzle, which I always feel is under-appreciated. It’s complex on the platform side, it’s complex on the sports product side, it’s complex on the front-end, end-user interface side. And that is all important because that’s what the end-user consumer sees, even though it’s a relatively small proportion of the totality of the tech that’s required to drive that consumer experience.” Lekites says it’s cutting-edge technology that will differentiate the product. “The technology powering GAN Sports is a young technology,” he says, “and we have the flexibility to adapt much more so than our competitors in the space, which are really working off a much older technology. It’s been around forever. So we’re in a strong position there to take advantage of that.” Richard Veltri came to GAN with Coolbet and is now the COO of that division. He says the ability to customize the platform is what makes it so attractive to clients. “GAN Sports has been really built on the proven success of a platform that delivered market-leading results in highly competitive B2C markets,” he says. “Operators are able to launch a market-leading sportsbook product while also taking advantage of customization. When we speak of customization, then we’re not only speaking about the front end or the design, but we’re really talking about the customization of the odds to differentiate yourself and really have control of the events that you’re offering as well as the bonuses and retention, and everything that goes with the sportsbook.” Smurfit says the Coolbet product allows clients the ability to differentiate themselves from their competitors. “We have a simple view,” he says, “and our view is informed by our clients, the retail casino operators. Most B2B product experiences available here in America are fairly pedestrian. They’re not particularly exciting; nobody will download a B2B sports app and go, ‘Wow! This is better than anything I’ve seen provided in the marketplace here in the U.S. today.’ So, what we believe is that Coolbet has a highly socially engaging offering. We’ve got enduser features that are surfaced to the consumer, the sports gambler, which I

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“Operators are able to launch a market-leading sportsbook product while also taking advantage of customization.”

think Jason Robins, the CEO of DraftKings, is to secure our first major U.S. retail casino optoday talking about maybe developing in the fuerator client of our omnichannel sports betture. Coolbet has it today. It’s been deployed. It reting technology and managed trading services sults in market-leading industry statistics for player solution acquired at the outset of the year retention month-to-month for the sports gambler. and demonstrated at G2E,” says Smurfit. “Coolbet is the Tesla of sports gambling apps. “The GAN team worldwide is excited to —Richard Veltri, COO, GAN Coolbet Division I’ll leave it at that.” enter the U.S. sports market next year with a Veltri says that the Coolbet platform has lots of market leader in Nevada.” different features that other online casinos can’t Thomas Mikulich, senior vice president, match. innovation and slots for Station Casinos, says the idea of giving the contract to “One of the elements that we’re bringing to the market is something GAN was logical. that we call incoming bets, where you actually see all the bets coming in “The choice of GAN reflects their proven technology platform, specialist from all your customers,” he explains, “and you see details of your potenexperience with integrating reward programs, reputation for integrity and tial win. Then you can just simply also segment between parlay or single their exciting sports betting user experience across online and retail devices, round robin, let’s say, and you can just simply copy that bet and make the and their overall commitment,” he says. “We look forward to collaborating same bet whenever you want.” closely with GAN to roll out their innovative sports experience here in NeLekites says that the adaptability of Coolbet is what will make it a sucvada.” cess. G2E brought lots of attention to Coolbet, and many companies are inter“This system allows the marketing team to properly segment and tarested in signing up. But Lekites says the company will proceed slowly, getting get those customers and retain those customers,” he says. “That is a huge the Station app perfect, before making many more commitments. differentiator for us—the flexibility of the system for an operator to have a “We don’t want to be in a position where we’re over-promising and full suite of tools at their fingertips, but they don’t have to keep bouncing under-delivering,” he says. “We’re prioritizing our existing customers. We between multiple platforms. It’s all on unified platform. We’re a white want to make them happy first. We want to make sure we do it right the first label solution giving the brands the tools to go out and offer their custime. And we’ll obviously ramp that up in late ’22 and ’23.” tomers the best sportsbook possible.” In addition to its B2B capabilities, Coolbet had some B2C operations It’s Complicated in other European, Canadian and Latin American markets, something that For Smurfit, the last 10 years of developing GAN products was just the runwill not happen in North America. Veltri says that experience only deepup to the success the company is having today. His passion for the process is ened the company’s understanding of what the players want. indicative in his reasons why an operator should choose GAN rather than “It’s been a huge benefit to us having that B2C experience outside of chase their own proprietary technology. the U.S.,” he says. “It’s given us the ability to tweak the product and see “Battle-tested technology is very, very scarce,” he points out. “My view is how the customers react and how it grows the market share. Three years there’s only really two battle-tested platforms available here in the U.S. today ago, we wouldn’t have been ready for this, but as the market grows in the that are low-risk and proven. And the marginal cost of renting our technology and our services is vanishingly small in the context of the overall opportunity. U.S., the timing is really perfect because we can now bring a superior “The iGaming and online sports technology is incredibly complicated. It product to the market.” is capital-intensive just to get to where we’re at today, never mind where we’re Station To Station going to be in a few years’ time. One of the key reasons operators choose GAN is we are a battle-tested, well-thought-of, successful, significant develGAN was just one of many platforms bidding for the contract of Red oper, owner, operator of technology, which is contributed to by so many difRock Resorts’ Station Casinos to replace their antiquated app for mobile ferent real-money gambling clients here in the U.S., and our experience is sports betting. Smurfit describes the bidding process as long and arduous unique. Our capability is very, very strong.” but at the end, GAN was awarded the contract for all Station retail sportsSmurfit’s commitment to his clients is beginning to be legendary. books and the STN betting app utilizing GAN’s GAMEStack platform “Life is all about conferring a competitive advantage on our B2B clients, and Coolbet. He believes this is another milestone for his company. to let them succeed in the marketplace,” he says. “After a comprehensive and competitive process, we are greatly pleased 38

Global Gaming Business DECEMBER 2021

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ADVERTISING: Consider Your Content & Volume

ing m a g n o re All eyes a who want to s companie their brands establish rcamo By Julia Ca

dvertising works through repeated messages that appeal to you emotionally. The emotions can range from knowing your family is wearing clean clothes to knowing you are covered if some idiot plows through an intersection and totals your car. The range of emotions affected by advertising is vast. Whether the message is good or bad, frequency is a hallmark of any media plan and will continue to be considered. As an industry, we are aware that advertising is a practical and often necessary tool. Still, we also know we must balance our marketing with some sense of responsibility to our budgets and those negatively impacted by gambling. I am dating myself, but when I started in the gaming industry, we were not allowed to do something as crazy as using the word “casino” in our television and radio scripts unless it was a part of the business’s name. Forget about saying “slots,” “winning,” or “jackpot.” Each commercial I submitted to an ad rep was reviewed (and often sent back for edits) because every local broadcast media outlet was tiptoeing around in an effort to maintain casinos as clients while not running afoul of the FCC. It was never a pleasant conversation. Today, as gambling expands into sports wagering and iGaming in states that never previously allowed it, we often see this as the lifeline we needed as we shut down our businesses in the early days of the pandemic. One side effect has been an expansion of advertising from these new(ish) players in the gaming field. As individual consumers, we have become more conscious of gaming advertising than ever before. This article is not about the ins and outs of advertising your casino, but rather about what we need to be considering as gaming expands along with ad revenue coffers. We have seen the need for guidelines play itself out in the U.K., and new cautions being raised in more countries—Sweden, Australia, Italy and Spain, to name a few. Unfortunately, we only hear these conversations after issues have been uncovered. Most notable in the U.K. is the backlash and fatigue coming from the public rather than from regulators. Becky Harris, distinguished fellow in gaming and leadership at the University of Nevada, Las Vegas, believes there was a failure to recognize how successful a vertical sports

Global Gaming Business DECEMBER 2021

wagering would be for leagues. As a result, the advertising has oversaturated and fatigued the market. We are in a position to get in front of a similar situation.

Back to the Future The entry of various platforms in any market is akin to the introduction of riverboat gaming, where multiple operators tried to get in front of potential customers as quickly as possible. The big difference is that those riverboat operators needed to wait until they opened the doors (or at least were very close to that point). Advertising done in advance of the time we could generate revenue was unheard of. With iGaming and sports wagering, operators are placing ads well in advance of perhaps even licensing. The frenzy to grab early adopters is mind-boggling, and something traditional casino marketers have probably never seen or experienced. Moreover, there does not seem to be signs of slowing down. There are currently rules promulgated by various state regulatory bodies that address advertising and marketing to minors, those on the self-exclusion list, and other groups. They often contain language such as “decency,” “good taste,” “deceptive” and “acceptable,” but none but Tennessee addresses how much advertising operators should be doing. Even then, the direction provided is somewhat vague. As a casino marketer, my advertising spend has typically been to create visits (unless we were launching a new brand which was driven by an awareness goal), which in turn build revenue. However, with sports wagering quickly becoming accessible in more than half the states as of this writing, the purpose of the incredible amount of advertising being seen this year from the likes of FanDuel, DraftKings, Caesars and BetMGM is perhaps a little different than a casino operator: to become an iconic brand and the likely choice for sports bettors.

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It is no surprise that the top three advertisers in the category account for 82 percent of the Q1 2021 spend. From what I can tell, it is working. A recent Cumulus Media survey showed FanDuel and DraftKings to have the top aided awareness levels (in states with legalized sports wagering), followed by BetMGM and Caesars. Moreover, DraftKings and FanDuel also enjoy the lead in awareness in states where sports wagering is yet to be legalized.

The Golden Goose According to Kantar Media, Caesars, DraftKings and FanDuel spent over $230.5 million on ads in 2019. In 2020, that number increased by $84.1 million to $314.6 million. This year the spending by these three operators and the new kids on the block will surely pass the $500 million mark. Although with a reported six-month spend of over $400 million by one operator alone, some estimate that number closer to $1 billion. At the start of this current NFL season, CBS was looking at double-digit revenue gains compared to the 2020 season (albeit a season that saw pandemic-related impacts to advertising commitments) not only to NFL games but to their general programming as well. The Wall Street Journal recently reported a spend of over $45 million on national advertising (for September 9 to October 17) by the top three sports wagering advertisers. This number does not include the local media buys. There is no denying that the expansion of sports wagering in the United States has been a cash cow for media outlets—particularly for local television markets—and we do not know where the bottom is yet. Unlike daily fantasy sports, which spent hundreds of millions (estimated by some at over $300 million) on advertising some years ago, officials like CBS Sports Senior VP of Sports Sales Tony Taranto see the gaming category acting as a catalyst for advertising sales and likely “the most significant new category seen in a generation.” In its Ad Intel 2.0 report, the Nielsen Company noted how uncommon it is for television to see a new category developed. Less common is when that new category becomes the golden goose. Though technically not new, the casino gaming category was somewhat taboo within the local TV industry until 2018, when the Supreme Court verdict opened the door to expansion. Nielsen also noted in its report that as of Q1 2021, online gambling now ranks 11th among 1,200 product categories for spot TV advertising dollars, accounting for a 2.1 percent share. Comparatively, legal services, the top category for dollars spent, account for 7 percent. It is no wonder some are calling our industry the “golden goose.” These comments—golden goose and most significant in a decade—are undeniably strong statements. It worries many that this kind of viewpoint could lead to a little “slippage” in how we as an industry market responsibly. Some see the number of times they see or hear a gambling ad as annoying. Many believe they encourage those who cannot control their wagering—

There is no denying that the expansion of sports wagering in the United States has been a cash cow for media outlets— particularly for local television markets—and we do not know where the bottom is yet.

precisely the type of adverse effects that concern problem gambling advocates and casino opponents. And the frequency of these ads is only increasing. We are starting to see advertising everywhere, including game areas and, most notably now, on uniforms. When we opened Harrah’s New Orleans in 1999, we were allowed (after much negotiation) to advertise on stadium units seen as fans exited the building. We were not allowed to advertise in the playing space itself, or any signage fans saw as they made their way to their seats, bathrooms or concession areas. It was as if someone drew a line where it was acceptable and where it was not. We would slip our commercials into the last break of the pre-game so everyone could feel assured that we were not advertising “in” the game broadcast. Were they concerned someone would leave to go to the casino mid-game? Did they think someone might call their bookie for a last-minute bet? The change has been like night to day. Today, professional leagues have opened the floodgates to more advertising and partnerships. “During the 2019-2020 football season, half the teams in the English Premier League had the logo of a bookmaker on the match shirt,” said Harris during the G2E session on the topic of lessons to be learned, “and we’re now seeing the entry of that concept into the United States.” We have seen casino logos on the boards of many a playing field. Major League Soccer has allowed sports gambling sponsors on its jerseys since 2019. The Washington Capitals took the lead in Major League Baseball when it announced a multi-year partnership with Caesars Entertainment that will include the Caesars Sportsbook logo on some jerseys. The NHL board of governors has given the green light to gaming sponsor patches on their jerseys for the 2022-23 season. The goal of the game now is finding enough inventory to sell.

The Scrutiny is Just Beginning Many states are taking notice of the type and amount of advertising being done and, with it, the messaging. As cited in the UNLV report The MarDECEMBER 2021 www.ggbmagazine.com

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Caesars, DraftKings and FanDuel spent over $230.5 million on ads in 2019. In 2020, that number increased by $84.1 million to $314.6 million. This year the spending by these three operators and the new kids on the block will surely pass the $500 million mark. keting Moment, there are many lessons to be learned from the growth of sports marketing in the U.K. Unchecked, we could see intervention either by regulatory bodies or the industry itself. The casino gambling industry has become mainstream. We have earned the right to advertise, but we could face review or backlash if we start imposing on other experiences. David Rebuck, director of the New Jersey Division of Gaming Enforcement, has warned that if the industry cannot control itself, the government will undoubtedly step in and create standards we may not want. When Colorado launched sports wagering, no one was surprised by the volume of advertising as 25 operators battled it out for customers. Officials expected ads to taper off, but that has not happened as of yet. Now, after fielding numerous complaints from constituents, officials are considering imposing restrictions similar to limits imposed on the marijuana industry. In Massachusetts, the Gaming Commission reviewed a report in early October from its research and responsible gaming team, which identified demographic groups particularly at risk of experiencing gambling-related problems, and provided recommendations for consideration, including limiting advertising. Although the commission noted that advertising had not been a prominent issue in past years, they were piqued to look for more insights as they posited that advertising could become more of an issue with the expansion of gaming. One commissioner noted a recent baseball game that had a gaming operator brand visible in the corner throughout the game’s broadcast.

The Language We Use The deluge of sports wagering ads uses language land-based operators have seldom used. Messages include phrases such as “risk-free,” “bonuses,” “odds boost,” and “guaranteed.” 42

Global Gaming Business DECEMBER 2021

Every time a discussion like this happens, I sense an opening into the business of casino marketing.

How Much Is Too Much? Fortunately, we have learned from past mistakes. During the daily fantasy sports boom of 2015, some felt the overload of messages. As a result, limits were set on frequency along with penalties in some jurisdictions. The NFL allows for only six spots during a game (limited to their partners), but that does not prevent a local media placement (partner or not) which could add to an advertiser’s frequency. Add local news programming to that mix, and you start to see how the saturation begins to build. Perception also plays a part, because while we are very aware of the influx of these ads, we have somehow learned to tune out the legal advice ads (which, as you recall, is still the largest advertising category). At some point, this level of spending will not be sustainable or profitable. There is a huge question mark on whether this situation will fix itself. The operators seem to think so. In its Q3 2021 analyst call, Flutter CEO Peter Jackson admitted that competition around the start of NFL wagering was “the most severe” they had seen. Many operators are trying to claim their positions in the markets, but he said the competition has started to cool off, and spending is being reined in.

Lessons To Be Learned As gaming executives, we must look to the cautionary tale being played out in the U.K. A YouGov poll found that two-thirds of adults supported a total ban on gambling ads. Operators underestimated the potential of public backlash, and now regulators are considering possible limits on advertising. There is no reason to find ourselves in the same situation as the U.K. some years from now. We do have the opportunity to get ahead of this with

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“What is most interesting here, is not what sports book operators spent on advertising, rather that sportsbook operators were not the biggest spenders. Insurance companies were. Perhaps we are all immune to insurance company ads by now.” —Becky Harris, Distinguished Dellow in Gaming and Leadership, University of Nevada, Las Vegas

self-regulation. That could be the most crucial first step before regulators step in. The U.S. market has seen other industries such as alcoholic beverages successfully self-regulate. As an industry, we have begun to move in the direction of caution. The American Gaming Association has created a Responsible Marketing Code for Sports Wagering. Like its hallmark Code of Conduct and newer AML Best Practices, the code should provide a framework to keep addressing concerns that may arise from expanding into legal sports wagering. As marketers, we must be cognizant of the fact that there is a tendency for over-saturation, such as what we saw with daily fantasy football (in 2015). Stakeholders in the advertising space need to be thoughtful about how we create demand for our product through media channels. Harris emphasized that we should be “taking care that we are not over-fatiguing audiences.” The pendulum swings back and forth, and even if it has not begun to swing back yet, it will.

Is It Just Smoke And Mirrors? Is there too much advertising going on, or are we, as consumers, just noticing it more because of its newness? Consumers become desensitized to hearing the same message repeatedly. Advertisers can create multiple messages or spend more money to break through the fog. If you are on the advertiser side, you may think the levels are acceptable. We are either securing the media placements we want or need at the prices we want or seeing measurable results from the efforts. As a fan of (or watching) your favorite team, you may consider it too much for a fleeting instant, but that feeling quickly leaves you as soon as you become more involved in the game itself. As a casino marketer, you may roll your eyes at the sight of yet another 44

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sportsbook ad, and we may very well be more attuned to notice gaming ads. Depending on your viewing habits, you might go days without noticing, seeing or hearing from operators. Just weeks before the start of the current season, the NFL announced gambling ads would no longer be prohibited. According to sportswriter Anthony Crupi, there were approximately 90 television ad units sold for a little over $21 million in week one of the 2021 season (across CBS, Fox, and NBC.) “What is most interesting here,” says Harris, “is not what sportsbook operators spent on advertising, rather that sportsbook operators were not the biggest spenders. Insurance companies were. Perhaps we are all immune to insurance company ads by now.” Or perhaps sports wagering ads seem to get a much stronger emotional reaction.

The Future In a previous interview with CO Bets, EPIC Risk Management Vice President Brianne Doura-Schawhol emphasized the risk we take by not managing advertising from both a content and volume standpoint. If responsible gaming advocates see advertising as expediting a normalization of gambling, the logic says (to them) that we could cause harm by influencing those who cannot gamble responsibly. We need to work on monitoring and reviewing our advertising activities. There will continue to be many reasons for managing and making changes to how we engage in sports wagering advertising. The leagues, operators and media companies need to continue to have the conversation. Perhaps we need to develop intelligent guidelines that we as operators can comply with while still marketing for responsible growth in our businesses. More importantly, we need to be nimble enough to change quickly and ensure we do not find ourselves in the situation we see in the U.K. There are still many more states to go in the expansion of sports wagering. The conversation and self-check must be ongoing. Julia Carcamo has held property and corporate leadership positions at medium to large casino companies. She is president and chief brand strategist at J Carcamo & Associates, serving casino properties from coast to coast. She writes on a variety of casino and general marketing topics and is founder of the highly lauded Casino Marketing Boot Camp. Contact: julia@jcarcamoassociates.com.

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MAKING MY POINT

Breaking the Mold Why not craft a job that fits the candidate instead of the other way around? By Roger Snow

“You can’t have Falstaff and have him thin.” —Tucker: The Man and His Dream (1988)

ust as there are two sides to a coin, two sides to an argument, and two sides to the midnight special at Pete’s Pancake Palace—tater tots are a must—there are two sides to something else. Us. And those sides are indeed co-joined in a way that is consistent, if not necessarily intuitive. Think about it: Don’t you know someone that can tell you pi to a hundred places but can never tell you where his car keys are? Or someone painfully shy in person but dazzling in front of a crowd? Or vice versa? Or someone so beautiful or talented—or both—who yet is riddled with self-doubt? Yeah. We all do. That’s because personality traits come in pairs, like chromosomes. Or socks. Or animals on Noah’s Ark, so no, speaking of fiction, you cannot have Sir John Falstaff, Shakespeare’s affable archetype of the loud, lewd, braggadocios, vice-full, drunkard, bloated bon vivant, and have him have the chiseled physique of Michelango’s David. That would be out of character… literally. In that way, we are all Falstaff: each of us is a jigsaw puzzle of strengths and weaknesses, of skills that come naturally and those that, well, don’t come at all. You are. Your boss is. Your employees are. The problem with us being this amalgam of adequacies and deficiencies is that our jobs, while they likely play to those strengths, often steer directly into those weaknesses as well. Which leads to failure, or at least ineffectiveness. Which leads to frustration. Which leads to your career stalling out or even sputtering to a stop.

Now what if, and this may sound craycray, as the kids say—they are still saying that?—instead of companies finding the person to fit a job, they find the job to fit a person? They tailor the duties and responsibilities around the unique skills a candidate brings to the company. Take this completely made-up example, for instance: Suppose someone is brilliant at product design but is an absolute disaster at managing people. We’re talking an HR nightmare on Elm Street. But, hey, we’re

In that way, we “ are all Falstaff: each

of us is a jigsaw puzzle of strengths and weaknesses, of skills that come naturally and those that, well, don’t come at all. You are. Your boss is. Your employees are.

”

hiring for VP of R&D and the job description and organizational chart say this person has a team of engineers reporting into it. That leaves you, in the conventional approach, with two options, each of them themselves faulty. One, you can pass on the nightmare and find someone better equipped to deal with human beings but less equipped to create the next wiz-bang widget. Or two, you can hold your nose and hire the genius, hoping that the first grand-slam product is conjured up before the first class-action employee lawsuit is.

But why not a third option? Why not hire the genius—they’re hard to come by—and have someone else manage the staff? Or run the meetings? Or create the PowerPoint presentations? Or fill out the TPS reports? Why make someone do something he or she stinks at? Because it’s in the job description? That’s what’s cray-cray. And take it a step further: Go back to that jigsaw puzzle. Imagine that’s a particular goal for your team. Could be hitting a revenue budget. Could be launching a product. Could be… well, it could be anything. That’s not the point. This is: Imagine your team members are pieces of that puzzle. Who cares about job descriptions (you probably plagiarized them off Monster.com anyway, bruh)? Instead, use the piece that fits, regardless of which piece is supposed to fit. Startups do this all the time. They can’t afford the type of creeping elegance that lets them hire a, uh, junior director of advanced quantitative logistics. Instead, they have… Carol the receptionist who happens to have a knack for numbers! Give it to her. And if there’s something she struggles with, give it to someone else. Because nothing makes employees happier than doing something they’re good at. (Well, OK, a big fat bonus at the end of the year doesn’t hurt, but the point still stands.) And the converse of that is that nothing makes employees more miserable—and anxious and scared— than doing something they’re not good at. So… why make them? Take this idea for a spin. Next time you have a project around the office, divvy up the duties according to attributes. Start small and see how it goes. What have you got to lose? 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.

DECEMBER 2021 www.ggbmagazine.com

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California Sports Betting: The Battle Is Joined California gaming tribes have vowed to beat back several sports betting initiatives that could challenge their own proposal on the 2022 ballot. As ever, the odds are with the powerful tribes. By Marjorie Preston

ince 1850, when California first joined the union, it’s been perceived as a kind of American Shangri-la, drawing adventurers and opportunists with its balmy weather, waving palms, dramatic coastline and hills filled with gold. It’s the land of swimming pools, movie stars, and California girls. It’s also the most populous state in the U.S., and the largest untapped sports betting market.

Gaming, has called California “easily the largest prize in the U.S. sports betting market.” Analysts say the market could generate $2 billion in the first year, for state tax revenues of $200 million, and up to $30 billion a year at maturity. By comparison, Macau GGR topped out at $36.4 billion in 2019, and in the same year, the total amount wagered in Nevada was $5.3 billion.

Multiple Choice

Let’s look at each plan: 1. The tribal-backed initiative would permit in-person betting at casinos and racetracks, but exclude card rooms and other entities and also prohibit mobile sports betting. The measure would impose a 10 percent tax on gross gaming revenues from sports wagering at horse tracks. Tribal casinos would kick in a share of revenues. Kyle Kirkland, president of the California Gaming Association (the card rooms’ group), says the initiative “does nothing to advance sports wagering, and instead expands the tribal casinos’ tax-free monopoly on gaming and rewards those operators for prioritizing their own wealth over public health and safety.”

That could all change next year. When voters go to the polls in November, they could be confronted with up to four ballot questions on legal sports betting. One proposal favors the state’s gaming tribes—the only measure now assured of a place on the ballot. Another is supported by the state’s card rooms and their host cities. One was proposed by a group of online sportsbook companies. A late-coming fourth entry, from a faction of three tribes, departs from the original tribal measure by proposing mobile as well as land-based sports bets. They’re all competing for a place at the table, and a slice of what could be a mammoth industry. Chris Grove, a managing director for Eilers & Krejcik

Global Gaming Business DECEMBER 2021

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2. A second initiative, pushed by California’s 86 card rooms, would allow tribes, licensed horse racetracks and professional sports teams along with their own operations to offer in-person, online and mobile sports betting. The measure also would let card rooms offer more types of games. As a sweetener, the deal would set a 15 percent tax on sports betting profits, with revenues going to help the homeless, public education and mental health. 3. A third measure supported by FanDuel, DraftKings and other mobile gaming providers would allow in-person betting at tribal casinos, which could also offer online bets through partnerships with—who else?—them. It includes a 10 percent tax on online betting profits and also would earmark the money for the “California Solutions to Homelessness and Mental Health Support Account.” This coalition has earmarked $100 million for a campaign to win voter approval. 4. The outlier, that fourth measure, was put forth by three gaming tribes, two of which also backed the original tribal measure. It would give tribes the right to online and mobile sports betting, the latter through servers on tribal lands. That plan leaves out racetracks, commercial card rooms, sports franchises and corporate online operators. Columnist Dan Walters of CalMatters called it “a hedge against the DraftKings-FanDuel measure, because it assumes that given a choice between wagering online or driving to a casino to place a bet, bettors would prefer the former.”

Turf Wars In October, the tribes came out four-square against the competing measures. In a statement, the California Nations Indian Gaming Association (CNIGA) and the Tribal Alliance of Sovereign Indian Nations (TASIN) said the measures backed by card rooms and online sportsbooks would “seriously (under-

“The tribes are really good at running these campaigns, and it would be foolish to underestimate them.” —Richard Schuetz, CEO, Schuetz LLC; former member, California Gambling Control Commission

mine) tribal sovereignty and the voters’ repeated support for Indian gaming in California.” And tribal lobbyist David Quintana took issue with Plan 4, noting that the three tribes in question all partner with out-of-state operating partners to run their California casinos: the Rincon Band of Luiseno Indians (Harrah’s); the Federated Indians of Graton Rancheria (Station); and Wilton Rancheria (Boyd). “This should never be called a tribal proposal,” he carped. “It should be called what it is: a proposal by out-of-state operators with tribal stalking horses.” Anthony Roberts, chairman of the Yocha Dehe Wintun Nation, said the “deceptive measures” were created for “the sole financial benefit of their corporate sponsors and funders.” And CNIGA Chairman James Siva expressed skepticism about the homelessness rider attached to two of the three plans. “Don’t be fooled,” he said in a statement. “These measures are not a fix to homelessness, but rather a massive explosion of gaming that will directly undercut tribal sovereignty and self-sufficiency.” Columnist Walters said, “It would surprise no one if hundreds of millions of dollars are spent on the campaigns next year, because the millions would be pocket lint compared to the billions of wagering dollars that would flow through the hands of whichever interests can claim legal authority.” In many ways, this battle is already won. California gaming tribes run a

On a “Top 10” list of U.S. communities with the greatest number of homeless, six were in California: L.A. County, Santa Clara County, Alameda County, San Diego and Orange counties, and the city of San Francisco. DECEMBER 2021 www.ggbmagazine.com

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“Don’t be fooled. These measures are not a fix to homelessness, but rather a massive explosion of gaming that will directly undercut tribal sovereignty and self-sufficiency.” —James Siva, Chairman, CNIGA

The gaming tribes’ initiative shuts out mobile sports betting, at least for now. Part of the popular narrative is that a mobile industry would siphon off traffic from land-based operations, especially in smaller, remote locations where the tribes depend on in-person visitation. $20 billion industry employing some 125,000 people in the state. For 40 years, they have been a vital part of their local economies, have forged strong bonds with their communities, and have wielded considerable political muscle.

Out in Front The gaming tribes’ initiative shuts out mobile sports betting, at least for now. Part of the popular narrative is that a mobile industry would siphon off traffic from land-based operations, especially in smaller, remote locations where the tribes depend on in-person visitation. But New Jersey has proven that the brick-and-mortar market hasn’t diminished because there’s a very vigorous online sportsbook and online gaming market. The tribes simply want to proceed cautiously, to keep their hands on the reins of an important new industry and revenue stream. Most observers believe the original tribal initiative, which is already slated for a 2022 referendum, will prevail. Richard Schuetz, CEO of Schuetz LLC and former member of the California Gambling Control Commission, says the commercial sportsbook measure (DraftKings, FanDuel, et al) “will definitely get on the ballot, because they have the money to do it.” He’s less certain about the card rooms, but understands the urgency for these businesses and their host cities. In the city of Hawaiian Gardens, for example, “The last I checked, about 85 percent of the municipal government funding came from this one card room.” Revenues from the card rooms help to fund local police and fire departments and other vital services. “So it’s really critical to a lot of these cities—they just need these dollars.” Schuetz says the card rooms “want to qualify on the ballot, or at least have people believe they’re going to qualify to have a ballot initiative, just to get in the discussion. They don’t want to be left on the side of the road.” And how about the homelessness rider, which ties the success of sports betting to relief for social problems? “Would you vote for a gambling initiative that could solve homelessness versus one that lets an out-of-state company take the money elsewhere?” asks Schuetz. “Through polling, the homelessness issue just tested very high.” The latest report on homelessness from the U.S. Department of Housing 48

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and Urban Development ranked California highest for the overall number of homeless, followed by New York, Florida and Texas. And on a “Top 10” list of U.S. communities with the greatest number of homeless, six were in California: L.A. County, Santa Clara County, Alameda County, San Diego and Orange counties, and the city of San Francisco. Despite the appeal of measures to fund homeless and mental-health services, Schuetz believes the tribes remain in the pole position. “There are 109 federally recognized tribes in California. They’re kind of tight with their communities. Sometimes there are some tensions, but by and large, they employ a lot of people in those areas, and that’s a strong army moving forward. “They’re really good at running these campaigns, and it would be foolish to underestimate them.”

The End Game Whatever happens at the polls next year, Schuetz says the battle for sports betting in California is a smokescreen concealing a bigger prize: iGaming, which represents 90 percent of gaming revenues when it coexists with sports betting. “This is a longer-run play” for operators, he says. “Once (lawmakers) get accustomed to sports betting and find out it can be regulated, they’re going to say, ‘If we add slots, that’ll generate even more tax revenue for the state.’ That’s the end game, I would argue, and anybody who says otherwise has been smoking something.” Behind closed doors, the wheels are turning, and some future alliance of tribes and commercial sportsbooks could be in the offing. Amid all this infighting, one thing is pretty certain, and that’s the enthusiasm of Californians for sports, which likely would translate into a strong appetite for legal wagers. The Golden State has more professional sports teams than any other U.S. state—16 (Florida is second, with nine). By some estimates, as a single state it represents 30 percent to 35 percent of the entire United States sports betting market, perhaps more. If any legal sports betting measure flies at the ballot box next November, fans will be betting within months—certainly by Super Bowl LVII in February 2023.

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EMERGING LEADERS Nevada Born & Bred Andrew Diss Senior Vice President, Chief Strategy Officer, Meruelo Gaming f you grow up in Nevada, the epicenter of casino gaming in the United States, it may seem like you are destined for a career in gaming. Sure, there are numerous examples of Nevada natives who have excelled in pursuits outside of gaming. It’s logical, however, that many of the industry’s modern leaders grew up in parallel with the industry’s growth in states where gaming has proliferated. And no state has more of an omnipresence of gaming than Nevada. While Andrew Diss, who grew up in Nevada, didn’t begin his career in gaming, he ultimately made his way to the industry. Diss, the chief strategy officer and senior vice president at Meruelo Gaming, comments on the influence that growing up in Nevada had on him, saying, “You’re always surrounded by the gaming industry, so it’s something present in the back of your head whether you know it or not.” Diss received his undergraduate degree in political science and history, and later a master of business administration, from the University of Nevada, Reno. Upon graduating from his undergraduate program, Diss put his political science degree to work before transitioning to gaming. “I’ve had an atypical path into gaming that started after working for several years in government,” says Diss. “I was initially hired for a government affairs position with the Grand Sierra Resort in Reno that eventually morphed into including the other businesses that our ownership operates, including Sahara Las Vegas, the Arizona Coyotes and several ventures in California.” Commenting on what attracted him to, and keeps him in, the industry, Diss explains, “I enjoy working at the intersection of business and government, where one day I’ll be working on gaming matters, the next day on banking issues, the day after that on land use and construction. It’s always something different, which keeps it interesting.” Diss is quick to give credit where credit’s due when it comes to those who helped him get to where he is today. “My dad has always been the person I look up to most,” notes Diss. “But in my professional career, it’s undoubtedly my boss, Alex Meruelo. He has an incredible American Dream success story, and I am extremely fortunate to benefit from his experience, insight, and mentorship. He’s also one of the most loyal and fair people I’ve worked with.” He offers up one more mentor who’s had an outsized impact on his career, commenting, “I also look up to Phil Satre as the man that has set the bar for integrity and servant leadership in our industry.” While he has excelled at his current company, Diss believes some of the most challenging, yet exciting times of his gaming career came in his early days at Meruelo. “We were in acquisition mode, so just keeping pace with turning around the operations and culture of the Sahara and the Arizona Coyotes was an exciting challenge,” says Diss. Even though Diss notes his early days of gaming were some of his most challenging, he continues to welcome and grow from new challenges in his current role. “The best way to learn how to do something is to actually do it yourself,” says Diss. “I find myself in new situations every day where I am constantly trying to navigate an issue or opportunity for our company that is new and unique.” This perspective on new challenges and openness to learning coincides with Diss’ advice to young professionals within gaming. “The surest way to becoming indispensable is, don’t be afraid to be uncomfortable! What I mean by that is don’t limit yourself to working in areas you already know,” explains Diss. “If you want to advance your career, you need to learn new skills which can be difficult, but it’s the surest way to expand your capabilities and make yourself useful to your colleagues and impress your boss.” —Michael Vanaskie is vice president, international development for The Innovation Group.

Global Gaming Business DECEMBER 2021

Success in Selflessness Heather Thomas Senior Safety & Loss Control Manager, Yaamava’ Resort & Casino at San Manuel e’ve all heard the expression “There’s no ‘I’ in ‘team’,” but the casino gaming industry is hardpressed to find someone who personifies that expression more than Heather Thomas. In all of the milestones of her long and illustrious career, there is one common theme to be noticed: she prioritizes helping others. When asked about her successes, Thomas highlights the achievements of her employees. When prompted to reflect on her accomplishments, she details the personal and professional growth of those she has mentored. What’s with this woman? Is she just a master at avoiding the spotlight, or is there something more strategic and deliberate to her approach at discussing success? If you guessed the latter, you’re right. For there’s a phenomenon that has occurred throughout Thomas’ career, a well-known strategy that every great manager implements. Take care of your team, and you take care of yourself. The very name of her specialty, “safety and loss control,” speaks volumes to the importance of people and the part they play in making or breaking a company. For instance, Thomas has been in the longstanding habit of encouraging and assisting her direct reports in their own career advancement, to the degree that a staggering 100 percent of them have been promoted within the San Manuel organization. And really, it’s Psych 101. Employees who feel heard, appreciated, and utilized for their skill sets are employees who will work harder and display more loyalty to their employer. An organization that encourages its employees to advance, even if it’s not within their current department, is a special place indeed. Thomas touches on this in her overview of working for the San Manuel Band of Mission Indians (SMBMI) and Yaamava’ Resort & Casino. The culture here ensures that all team members are aware of the part they play in not only contributing to the success of the tribe,

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but to the legacy of a family. It’s a philanthropy that extends far beyond the walls of the casino, seeping into and positively impacting the very region itself. It comes in the form of tuition reimbursement, partnerships with local universities, internal training, membership, and community involvement and volunteering. SMBMI’s culture has also inspired leaders like Thomas to teach and innovate using out-of-the-box methods. For instance, one of the greatest accomplishments of her career occurred in 2018 when she decided to forgo the standard talking heads safety training method, replacing this method instead with an assignment for her employees to create a safety-themed escape room. Throughout the organization, departments broke into teams and each team was tasked to solve, under a time limit, a series of puzzles focused on safety, training, and emergency preparedness. The exercise invigorated the participants, imbuing them with the benefits that come from healthy competition. Thomas’ exercise garnered the attention of not only the C-suite executives of the organization, but of safety partners from other industries as well, giving her team the opportunity to present their designs, as well as exposure to executives of all ranks. The exercise was such a tremendous success that they repeated it the following year with an even larger number of participants and executives buying in. The teamwork that resulted from this kind of corporate camaraderie was more essential than anyone could have predicted as Covid-19 swept over the world shortly thereafter, shining an unprecedented limelight on the arenas of enterprise risk management, occupational safety, public health, and emergency management. These fields boomed with opportunity as a result of the pandemic, permanently shifting industry perspectives and creating career opportunities ranging from entry-level positions to executive leadership. And now as we all navigate these waters of adjustment and adaption, Thomas holds true to her mantra in molding rising leaders. “Get involved!” she advises, encouraging young professionals to build networks within their organization and throughout the gaming industry. “Volunteer at one of the many community outreach opportunities available, participate in training, and join groups and committees whenever the opportunity presents itself,” she urges. Thomas’ passion for mitigating risk continues to be affirmed through her networking efforts, and through the chances she gets to work alongside great leaders. All of these combined experiences help her better understand how to support her organization. And she continues to advise onboarding team members. “There are so many amazing people working a vast array of careers,” she says. “You never know where you might find your passion.” —Marie Casias is the manager of marketing and administration for The Innovation Group.

Finders Keepers Lauren Bates Vice President, West Game Sales, Konami Gaming, Inc. auren Bates will be the first to tell you she didn’t seek a position in the casino industry. “If I’m being honest, gaming found me,” says Bates, an Ohio State grad who grew up in Mentor, Ohio, a Cleveland suburb. Bates went out to Las Vegas to visit a high school friend. But before she left, she sent out some resumes in the hopes she could land an interview and practice her technique. Being in the resort opened her eyes. “I was slowly falling in love with Vegas, the potential opportunity, and gaming and hospital lifestyle,” Bates says. A recruiter sent Bates to Konami Gaming for an interview. The company offered a position contingent on her starting immediately. And 15 years later, Bates still works for Konami as vice president, West game sales. In her position—which covers territory west of Oklahoma—Bates develops and manages a team of sales professionals, driving revenue, charged with the development and execution of annual business strategy. Remaining with Konami all these years, Bates has experienced an industry in constant evolution and expansion. “Whether it’s new functionality like cashless play or opening new market segments such as sports betting or historical horse racing, there’s always something new and exciting,” she says. Bates feels fortunate to work on both the games and system sides of Konami. “When I initially started, many of the decisions made were relationship-based,” Bates explains. “While relationships and rapport are still critical to successful business partnerships, decisions are a lot more analytical these days.” The pandemic, Bates says, was a game changer. “I was out on maternity leave, preparing to return to work when the world closed on March 16. My plans of easing back into work while caring for my newborn son, Will, quickly changed.” Bates feels patience, hard work and tenacity can conquer any obstacle, including Covid-19. She believes in the age-old mantra: don’t take no for an answer. “‘No’ means not right now, so understand why you got that response and do the work to improve and prepare for the next opportunity,” she says. Asked about mentors, Bates gives her props to David and Gayle Eble, her parents. “My mom and dad have been my biggest cheerleaders since day one, and words will never be enough to describe how grateful I am to them and all they’ve taught me,” says Bates, who spends her rare free time with her husband, Jim, and Will, “like the importance of hard work, empathy and kindness, how to balance a career while raising a family.” Another mentor is hubby Jim, a retired gaming executive. “I am extra lucky to call this man my best friend, husband and mentor. With over 30 years in gaming, he’s worked on both the operator and manufacturer sides of the business. There isn’t a market he hasn’t worked in or product that he hasn’t sold.” And there’s Global Gaming Women, where Bates serves as vice president. “I have the privilege of working with some of the most incredible female executive leaders in the industry. Each of them provides invaluable guidance and perspective with a unique and diverse skill set.” If she could offer advice to her younger self, Bates would urge three things. “Have patience. It’s going to work out and be better than you ever imagined; trust your gut. If something doesn’t feel right it probably isn’t; stop trying to be who everyone else wants you to be. Your authentic self is what makes you great and got you where you are today.” —Bill Sokolic

DECEMBER 2021 www.ggbmagazine.com

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Maturing Books

Aided by new technology and a huge new market in New York, sportsbooks are expanding to offer a wide variety of wagers By Dave Bontempo

he heyday lives on. Legalized sports betting, hailed as a lucrative wild card in the online gaming landscape, maintains its prestige. The gambling surge forecast by the 2018 repeal of the Professional and Amateur Sports Protection Act roars above expectations as 2021 concludes. Bettors, the gaming industry and state budgets relish this new revenue source. Since 2018, American gamblers have wagered roughly $75 billion, and have created about $5 billion in revenues and nearly $750 million in state taxes, according to industry estimates. In an eye-opening milestone, New Jersey’s record handle surpassing $1 billion in online wagering in September enhances the sports-betting mystique. Optimism won’t slow any time soon. The sports-gambling expansion, in a football sense, still hasn’t hit midfield. There is at least a couple of years left in this run, as states scramble to implement their new cash cow. Arizona, Connecticut, Virginia and Louisiana highlight the 2021 expansion. Highly populated New York expects to become operational before the Super Bowl in 2022 and California may be a year or so away.

New York Prepares to Launch The buzz around New York state hit fever pitch with its November 8 announcement awarding mobile licenses to several entities. Revenue optimism soared with it, despite New York’s astronomical tax rate of 51 percent. States, gaming operators and vendors closely watch two significant startup periods, the Super Bowl in February and the launch of product before the next NFL season kicks off. Catching these two heavily bet segments

Global Gaming Business DECEMBER 2021

of the pro football season are paramount. Here’s an overview from several vantage points of the sports-betting landscape after a lucrative 2021.

Taxes Stakes continued to be raised. New Jersey handled a total $1.01 billion in sports betting in September, becoming the first state in the U.S. to surpass the $1 billion mark and breaking the previous record it had set in December last year, according to the New Jersey Division of Gaming Enforcement. A billion plus. Billion with a B. These totals dwarfed initial expectations accompanying the PASPA overturn in two major areas. One, the sports-betting pioneers who overcame decades of obstacles and hypocrisy from the professional sports leagues argued in favor of brick-and-mortar sportsbooks. They couldn’t envision what came next. In the midst of that battle, mobile betting became a monstrous presence. And it redefined the capabilities of sports wagering. Handle skyrocketed. Of New Jersey’s $1.01 billion, online sports wagering handled the lion’s share of $918.4 million, and on-site wagering at nine casinos and three racetracks handled $92.7 million in the month of September, according to the DGE. Second, nobody projected the amount of money freed from the hammerlock of illegal bookmakers. Sportsbooks have something the illegal op-

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Of New Jersey’s $1.01 billion, online sports wagering handled the lion’s share of $918.4 million, and on-site wagering at nine casinos and three racetracks handled $92.7 million in the month of September, according to the DGE. erators don’t—huge cash reservoirs. That has enticed bettors to employ practices they could not with an illegal operator, like leveraging a multilegged parlay. Players may take a $1,000, 10-legged parlay that would pay off in hundreds of thousands of dollars with an established book, because the establishment will pay the bet. An illegal bookmaker with limited cash reserves either would not take or would not pay this type of wager. This dynamic curtailed certain types of betting and under-estimations of the true revenues legal books could seize away from illegal establishments. Sports-betting money flows in ways few anticipated. And even those who anticipate trouble with New York’s horrific tax structure lined up to apply for a license.

The Data It enlivens the betting product, at online books or on one’s television. Implied win probabilities. Which team will score the next touchdown. The second half over/under of 24 points has -110 betting odds on either side. These are just some of the data points placed across the bottom of a television screen. Data also becomes a major handicapping tool. It can help determine future player and team performance, predict upcoming trends, fuel fantasy sports platforms, and allow news outlets to use statistics to market certain sports and players. This in turn drives interest and revenue in a key area of sports wagering. In the past year, industry officials estimate that the presence of in-game betting has skyrocketed, from 10 percent to 25 percent. What enables this phenomenon? Odds that change after every baseball at-bat, basketball hoop or a couple of plays run in a football game. More jurisdictions mean more operators, more bettors and more need for the statistical kindling building the betting fire.

A Product to Watch: Game Parlay Launched just before the NFL season, Game Parlay from Kambi has been a hit with bettors. During the opening weeks of the NFL season, Game Parlay bets had already proven immensely popular with players, with approximately 40 percent of NFL bettors engaging with the product. Furthermore, approximately 35 percent of Game Parlay bets were placed across more than one game— something its competitors don’t currently offer, according to Kambi. What sets the Game Parlay offering apart from those offered by other leading sportsbooks is the fact it has been built into the core of the company’s sportsbook product, company officials say. It’s the next natural step in the evolution of parlay betting, providing bettors with the opportunity to combine main and player prop bets within a

single game and across multiple games for the first time. “We knew that we needed to deliver an integrated and intuitive experience for our partners and their customers alike to get the most from the product,” a spokesman says. The fact that Kambi built the technical infrastructure required as part of the existing sportsbook, rather than bolting on a third-party product, means that the company will be able to add future product features. “For example, players will soon be able to place game parlays across additional games, leagues and sports, while in the long term we also plan to introduce cash out and in-game betting into the product,” a company official indicates.

Complex Modeling One of the key factors in being able to offer these parlays is the complexity of the mathematical modeling required, Kambi officials indicate. The company asserts that automating the systems required to accurately predict the correlation between many different outcomes and game scenarios is structurally challenging. This process also requires extensive expertise, along with resources for testing and development. The company also provides technical infrastructure to support both instantaneous odds calculation and bet placement. “When there is an effectively infinite number of bets that could be created, the power required to swiftly generate those prices, take and settle thousands of these bets a minute is naturally vast, and not something many sportsbooks are capable of catering to,” an official says.

Major New York Player Kambi just hit its own same-game parlay—a New York mobile-wagering license to utilize with some of its partners. The company was a huge winner in the New York State Gaming Commission’s (NYSGC) November 8 decision to grant mobile sports betting licenses to the major sports-betting establishments. Sportsbooks teamed up to submit bids and two consortiums were selected. One involved DraftKings, FanDuel, Bally Sports and BetMGM. Kambi headlined the other, which included PointsBet, Caesars, WynnBet and ResortsWorld. Kambi Group submitted the applications for the others, and will interact with them in areas like technology integration, generating tickets and keeping records. The state hopes to be operating before the Super Bowl. Regardless of the 2022 timing, Kambi has established a 10-year position, with several partners. According to a Kambi press release, the New York commission confirmed that a consortium led by Kambi as the primary applicant had been successful in its bid following a competitive request-for-applications process DECEMBER 2021 www.ggbmagazine.com

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Caesars Sportsbook is live in 20 states and jurisdictions—14 of which are mobile— and operates the largest number of retail sportsbooks across the country

in which it achieved the highest score. With a population of more than 20 million, New York is the most populous state to regulate online sports wagering to date, and will enable Kambi to further extend its footprint in the growing U.S. sports wagering market. “I’m proud Kambi has been selected as a recipient of a Mobile Sports Wagering Platform license in New York State,” says Kristian Nylén, Kambi chief executive officer. “The confirmation from the NYSGC marks a major milestone in the evolution of the U.S. sports betting market, of which Kambi has been at the forefront since taking the first legal online wager in 2018. “Kambi has proven time and time again that we know what it takes to succeed in some of the world’s most competitive sports wagering markets,” he adds. “Therefore, we are confident our mobile sportsbook will be just as popular with New Yorkers as our on-property product, which has been live in the state for the past two years.” One of Kambi’s partners is Rush Street Interactive, which also operates an on-property sportsbook at Rivers Casino and Resort in Schenectady, New York, where it took the first legal on-property bet in the state in 2019. “To obtain one of the few licenses on offer in New York state is testament to Kambi’s exemplary track record in the U.S., as well the strength of our partner Rush Street Interactive,” says Sarah Robertson, Kambi’s vice president of sales. “Preparations are already well advanced to ensure we are able to go live on day one of the market opening, as we have done so successfully on many occasions in the United States and across the rest of the world.” Kambi is already a leading B2B sport-betting platform in both online and on-property sportsbook functions. It provides the technology and services required to deliver a scalable and high-performance sportsbook. Kambi takes care of the day-to-day operation of the sportsbook so operators don’t have to. From pricing and risk management to integrity monitoring and customer services support, Kambi has it covered. Removing this essential but burdensome work provides operators with the freedom to focus on strategic planning and execution, and on the areas which provide true differentiation. The New York partnership with Kambi, meanwhile, is another strong development for Rush Street Interactive, a leading online sports betting and casino company in the United States. In early November, the company announced that its award-winning

BetRivers online sportsbook is fully launched in Arizona. Sports fans age 21 and over can now register, deposit funds, wager, and withdraw payouts quickly and securely from the BetRivers Sportsbook app for iOS and Android. The BetRivers online sportsbook offers thousands of betting options on various leagues, games and players, as well as other innovative features including betting tips, an advanced stats center and player search functionality, a wide library of live streaming content and realtime game tracker visualizations. In August, RSI announced a multi-year market access partnership with the Arizona Rattlers, a long-tenured professional indoor football franchise in Phoenix. The Arizona Rattlers are one of the most accomplished professional sports teams in Arizona, and are coming off a successful 2021 season where the team advanced to the Indoor Football League’s championship game, the United Bowl. Caesars also lauded its entry into the Empire State. Caesars Entertainment has already established itself as a premier gaming operator in the tristate area, through its retail casino and sportsbook footprint, including the company’s stateof-the-art retail sportsbooks at the Oneida Nation’s three casino properties. When mobile sports betting becomes available in the Empire State, fans will be able to earn credits and tier status to unlock incredible experiences through Caesars Rewards. Additionally, through its unparalleled partnerships with the National Football League, ESPN, CBS Sports and more, Caesars looks forward to delivering an elevated experience for sports fans in New York. Caesars Sportsbook is live in 20 states and jurisdictions—14 of which are mobile—and operates the largest number of retail sportsbooks across the country. The mobile app offers expansive wagering options, including live in-game betting, as well as safe and easy ways to deposit and withdraw funds. Caesars Sportsbook is the official casino sponsor and an official sports betting partner of the NFL, and has partnerships with the NBA, NHL, MLB and more than 20 individual teams across the country while being the exclusive odds provider for ESPN and CBS Sports. The big hitters are lining up in the Empire State. They have weighed the population of New York and the betting appetite of the nation’s largest city against the drawbacks of a loathsome tax rate. New York won’t be the last state to generate this type of euphoria. The sports-betting movement has a long way to go.

Sportsbooks have something the illegal operators don’t—huge cash reservoirs. That has enticed bettors to employ practices they could not with an illegal operator, like leveraging a multilegged parlay.

Global Gaming Business DECEMBER 2021

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FRANKLY SPEAKING by Frank Legato

Fighting Casino Crime It’s time for our popular feature, which I just made up, called “Casino Crime Blotter.”

ateline, Des Plaines, Illinois: (Here’s where you have to imagine an old-fashioned news-ticker sound effect in the background.) Police are investigating an armed robbery that took place just outside the Rivers Casino in Des Plaines. According to police, two men with bandanas covering their faces (they may have just been Covid face coverings, but “bandanas” sounds much more badass) pulled a vehicle up beside a guy walking through the parking garage at 2:30 a.m. and robbed him at gunpoint. They got away with $40,000, in cash. The victim admitted to TV news reporters that he probably should have cashed out with a check from the casino instead of collecting his winnings in cash and strolling out the door with it. Umm... Ya think? Now, I’m not familiar with Des Plaines, Illinois. I’m sure it’s a fine place. The city’s website even says so. But still, I don’t care if it’s Mayberry and Otis the drunk is the only one on the streets. I’m not leaving a crowded casino to saunter into a dark parking garage in the middle of the night toting 40 grand in cash. That’s a lot of samolians—400 $100 dollar bills. And here, in full view of every vagabond hanging around a casino at 2 in the morning, this guy tells the cashier, “No, I’ll take it in cash. Here, stuff it in my pockets.” I’ve addressed this subject many times in this space. Geez, get a certified check. You can even have them wire your winnings right to your bank account. Don’t walk around dark streets and parking garages in the middle of the night with cash bulging out of your pockets like... I was going to say Scrooge McDuck, but I did a search of my prior columns in two different magazines on this subject, and found five Scrooge McDuck references. That goes to show you how many people do this. Just ask for a check, for crying out loud. Dateline, Bell Gardens, California: (Imagine the news ticker sound again. Hey, it’s essential to the bit.) The Bicycle Hotel and Casino in Bell Gardens, California paid a $500,000 fine for casually accommodating a “high roller” who showed up with duffel bags of cash to play baccarat. I’m no expert, but I’m pretty sure that under federal anti-money laundering rules, you’re supposed to question a customer who shows up with

satchels of cash to buy chips for your baccarat tables. The casino was called on the carpet for improperly filed currency transaction reports and failure to file suspicious activity reports. The casino agreed to a non-prosecution agreement under which it pays the federal government $500,000, which they say is the amount the casino won from the customer. Lesson learned. The next time I consider toting duffle bags of cash into a casino so I can play craps, I’ll... Well, I’ll wake up from the dream and realize I couldn’t muster enough cash to fill a Walgreens shopping bag, much less a duffle bag. (And these days, I’d even have to pay for the Walgreens bag. Not relevant to the story, but it annoys me, and this is my column.) Dateline, Sparks, Nevada: (The ticker again. Just humor me.) Police report that around 6 a.m. one morning at Sierra Sid’s Casino, a man in black clothes with a vest marked with the word “SECURITY” approached the cashier’s cage and demanded money, while showing he had a gun. “He then tried to enter the cage but was unsuccessful,” a news report said. “The suspect then ran out of the north casino exit and stole a purse from a woman gambling at a slot machine... Police found the stolen purse.” Boy, thieves just have no creativity anymore. Or brains. First of all, Sierra Sid’s is a truck stop. If you’ve got the cajones to rob a casino cage, why not go for a large casino? Putting that aside, I’m guessing there was some sort of locked, bulletproof barrier that prevented anyone who was unauthorized from entering the casino cage. Our guy’s diabolically ingenious scheme to thwart this measure was to wear a vest that said “SECURITY.” “Larry, that guy’s trying to get into the cage! He’s got a gun!” “Wait, Madge, his vest says ‘SECURITY.’ Buzz him in!” And after all that, the guy snatches a purse on the way out. And they retrieved the purse. His vest should have said, “LOSER.” By the way, in my columns, references to Scrooge McDuck are exceeded only by references to The Three Stooges. If you research my work, you’ll find a Stooge reference before you can say Ticonderoga. If you can say Ticonderoga. DECEMBER 2021 www.ggbmagazine.com

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NEW GAME REVIEW by Frank Legato

Dune

Aristocrat Gaming

ristocrat Gaming’s new Dune Class III slot game is an industry first, according to the company, in that the slot game’s release to casinos was synced to the October 22 U.S. theatrical release of the motion picture Dune, which is the first of a two-part film based on Frank Herbert’s 1965 science fiction novel set in the far future on an inhospitable desert planet. Dune the slot game features sights and sounds directly from the film, with themed game play unique to the game. Also unique to Dune the slot game are new mechanics such as full-reel multiplier stacks and frequent scatter-triggered features—such as free spins on three sets of reels, an expanding reel feature in which the reels rise to eight rows high with cash-on-reels symbols (the “Sandworm Feature”), and a unique Hold & Spin feature (the “Duncan Feature”). Dune is featured on Aristocrat’s new Neptune Double cabinet, its stacked, curved 49-inch 4K monitors perfect to provide an immersive, theatrical visual experience, along with state-of-the-art

sound, and a custom-designed, adjustable sound chair. The primary game is in a “Reel Power” ways-to-win format on a four-by-five reel array, which yields a possible 1,024 ways to win on each spin. The game features a multi-site progressive jackpot that resets at $500,000, and a secondary near-area progressive resetting at $1,000.

Super Buffalo, Super Dragon Everi Holdings

the inner wheel to either win hese sister games on Everi’s Empire Flex cabinet feature unique that progressive or land an “Upwheel bonuses offering multipliers and multiple wheel bonus grade” symbol. The Upgrade awards. symbol eliminates all static Both base games are in a 243-ways-to-win format, with 15 individual awards and the lower tiers from reels set in a three-by-five array. the wheel, leaving only the top The wheel bonus on each game is triggered with at least six bonus four levels, for which the player symbols scattered on the screen. More than six bonus symbols in the trigspins again. gering spin unlock special features on each game. In Super Buffalo, each bonus symbol beyond six increases the multiplier applied to the wheel bonus, up to 10X. In Super Buffalo, the extra symbols add Manufacturer: Everi Holdings extra wheel awards—up to 10 slices on the Platform: Empire Flex bonus wheel can yield the combined prizes Format: 15-reel, 243-ways-to-win video slot that are displayed. Denomination: .01 through 5.00 Both themes have a progressive bonus Max Bet: 350, 375 feature similar to the progressive bonus in the Top Award: Progressive; $15,000 reset award-winning Smokin’ Hot Stuff Wicked Hit Frequency: 30% Wheel game, but in a wheel format. The Theoretical Hold: 5%-17% player locks in a progressive and then spins 56

Global Gaming Business DECEMBER 2021

Manufacturer: Aristocrat Gaming Platform: Neptune Double Format: Five-reel, 1,024-ways-towin video slot Denomination: .01, .02, .05, .10 Max Bet: 880, 720, 640, 400 Top Award: Progressive; $500,000 reset Hit Frequency: Approximately 30% Theoretical Hold: 6.01%-12.16%

Strength in Numbers

More than 160 member companies from 22 countries Nearly $21 billion in direct revenue • 61,700 employees 13 publicly traded companies • ONE POWERFUL VOICE Address worldwide industry expansion, 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.

AGEM.org

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Wheel of Fortune 4D Collector’s Edition IGT

GT continues the 25th anniversary year of the iconic Wheel of Fortune franchise by applying its unique 3D and “True4D” technologies to make the famous game show come alive. The player can adjust the intensity of the 3D effect on this game, and the True4D technology adds midair haptic capabilities— the player affects certain game aspects by waving hands through the air or pointing, placing them in the middle of an immersive game experience. The base game is a five-reel, 243-ways-to-win video slot on IGT’s CrystalCurve True4D cabinet. The familiar Wheel Bonus is played across the entire bank, creating a striking sight on the casino floor. High-paying free games and stacked symbols in the base game provide anticipation on every spin. In the coin collection feature, players land gold coins with values on them that are added to the pots above the reels. The pots build

Manufacturer: IGT Platform: CrystalCurve True4D Format: Five-reel, 243-ways-towin video slot Denomination: .01 Max Bet: 500 Top Award: Progressive; $2,000 reset Hit Frequency: Approximately 30% Theoretical Hold: 4%-12%

until a gold coin with “Collect” lands on a reel, awarding the amount in the pot above that reel. In the free games feature, the pot values are locked in place and can be collected multiple times in one spin—and don’t reset after collecting. Landing three, four or five bonus symbols triggers the wheel, where credits or free games are awarded. Players win the top Wheel of Fortune jackpot when playing at 300 credits or higher. The multi-site top jackpot resets at $500,000.

Super Reel ‘Em In! Scientific Games

his reboot of one of the legendary titles from the original WMS Gaming reprises the comical animated fishing bonus that propelled the legacy manufacturer into the multi-line video slot genre that previously had been dominated by Aristocrat, which had yet to be licensed in Nevada at the time of its 1997 release. Reel ‘Em In was pioneering for its time, not only for the multi-line format, but as one of the earliest games offering a second-screen bonus. It was a funny sequence in which the player’s fisherman or fisher-woman narrated, in a thick Chicago accent (WMS was headquartered in Chicago), as the line was lowered into a lake to nab bonus credits. Manufacturer: Scientific Games Platform: Mural Format: Five-reel, 40-line video slot Denomination: .01, .02, .05 Max Bet: 600 Top Award: Progressive; $2,000 reset Hit Frequency: 28.4% Theoretical Hold: 4%-12%

Global Gaming Business DECEMBER 2021

Here, the game is re-created on the grand new Mural cabinet, featuring dual stacked 55-inch 4K curved monitors—that’s 110 inches of game real estate, the most in the business—in a presentation that rises 11 feet. The slot successfully recreates the old fishing bonus with modern game mechanics. When the bonus is triggered, the line drops into the lake looking not only for credit awards—top prizes are in the thousands of dollars—but a variety of freespin awards, some featuring more than 30 spins. The slot features three dynamic progressives, and jackpot prizes. With the fisherman’s Wild Bobbers holding all credit value prizes in the Money Stacks Free Spins or multiplier values in the Multi-Stacks Free Spins, there is a variety of prizes the player can reel in. The Fishing Contest Free Spins is where a player chooses a character to compete with four others to see who can catch the most fish for a chance to win one, two or three fish in the Vacation Lake Bonus. The base game is a 40-line video slot on a four-byfive reel array. There is an expanding reels feature that can double the size of the reel array, doubling the paylines and increasing pay opportunities.

PLAY ONLINE. BET ONLINE. SAFELY AT HOME CLICK. LEARN. SIGN-UP. PLAY. WIN!

iGamingPlayer.com is your one-stop shop for all LEGAL online gambling in the U.S. We work only with licensed, regulated providers. We guarantee your online play is safe, secure and protected. We offer unbiased reviews and information on all the operators plus the best sign-up deals. iGaming Player is licensed in Colorado, Illinois, Indiana, Iowa, New Jersey and West Virginia. Bet with your head, not over it. Call 1-800-GAMBLER if you have a gambling problem.

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CUTTING EDGE by Frank Legato

Custom View PRODUCT: QCI Platform MANUFACTURER: Quick Custom Intelligence

uick Custom Intelligence’s QCI Platform solution has claimed the market leadership position with installations in over 2,000 sites worldwide, including deployment in 40 large-scale resorts in North America. The QCI Platform delivers a unified gaming platform that aligns the operator’s marketing, player development and casino operations around one view of the data. This is accomplished with scalable technology that deciphers player behavior at a deep level which enables hosts, marketing executives and casino operations to act in a modern, data-enriched environment. Gaming operations benefit from the QCI Platform in several areas: QCI Host, QCI Marketing and QCI Slots. QCI Host has 1,000-plus hosts using the tool daily, making it the most successful and widely used tool in the industry. It’s built for hosts and host managers—turning hosts into heroes by creating unforgettable, personalized experiences for players that consistently bring them back. QCI Marketing manages the operator’s campaigns and applies AI algorithms to customer data through an easy-to-use, intuitive marketing tool. QCI Slots unlocks deep insights into the complex dynamics of the modern gaming floor. The QCI Platform’s newest module, the Slot Optimization Tool, recom-

mends which games to remove from the floor, games to add, and the optimal location to place them. At its core, the QCI Platform is a highly repeatable solution. It’s a hyper-scale, version-controlled and customer-centric tool that allows casinos to gain true operational efficiencies specific to their needs. And because the design is highly configurable, it is easily customized to individual requirements and provides a seamless upgrade process. It is this hyper-scale capacity which allows QCI to upgrade highly configured sites with the latest capabilities with zero site-specific adjustments. The upgrade process is typically completed in less than 15 minutes with zero interruption to operations. The QCI platform is an innovative solution that allows for hybrid and hybrid-cloud deployment of an operational multi-site, multi-tenant, real-time version control platform. This data-driven software allows for quick, informed decisions in the ever-changing world of the casino industry and assists casinos in their efforts to optimize resources and profits, manage marketing campaigns, and increase customer loyalty. For more information, visit QuickCustomIntelligence.com.

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GOODS&SERVICES

SCIENTIFIC GAMES AGREES TO SALE OF LOTTERY BUSINESS

cientific Games Corp. has entered into a definitive agreement to sell the lottery business on which the company was founded to Brookfield Business Partners for a total consideration of $6.05 billion. It is the second and final divestment in the plan, announced last summer by company President and CEO Barry Cottle, to shed the company’s lottery and sports betting businesses to concentrate on its core business of providing content to both landbased and online casinos. In September, the company entered into a definitive agreement to sell its sports betting business, OpenBet, to Endeavor Group Holdings, in a cash and stock transaction valued at $1.2 billion. Under the agreement, Brookfield and its institutional investors will pay $5.825 billion in cash for the lottery business, and an earn-out of up to $225 million based on the achievement of certain EBITDA targets in 2022 and 2023. The transaction is expected to close in the second quarter of 2022, subject to applicable regulatory approvals and customary closing conditions. Scientific Games was founded in Alpharetta, Georgia in 1973 to supply state and provincial lotteries in North America. The company, originally part of parimutuel supplier Autotote, introduced the first instant lottery ticket in 1974. Today, it supplies 130 government and non-government lotteries in more than 50 countries across the world with tickets, systems and other lottery services. SG’s lottery division provides a suite of turnkey solutions covering the entire lottery ecosystem, including instant and terminal-generated lottery games, sports betting, lottery systems and retail technology and the fast-growing iLottery market. The lottery business is the market leader in instant games with a broad array of products and services powering approximately 69 percent of instant product retail sales globally. “This transaction is transformative in accelerating the delivery of our stated strategy to optimize our portfolio, aggressively de-lever our balance sheet 62

and position us to invest in future growth,” said Cottle in a statement. SG Lottery will remain headquartered in Alpharetta, in the metro-Atlanta area, with operations expected to continue around the world. SG Lottery has entered into a transitional services agreement with Scientific Games Corporation whereby Scientific Games will provide SG Lottery certain finance, information technology, regulatory compliance, legal, human resources and facilities at cost for an initial term of 12 months. Scientific Games had been in discussions with Apollo Global Management as well as Brookfield in its search for suitors interested in buying the SG lottery business, which had been valued at up to $7.5 billion.

ARISTOCRAT TO PRODUCE NFL-THEMED SLOTS

he National Football League and Aristocrat Gaming have announced an exclusive multiyear slot machine licensing agreement. Under the terms of this agreement, Aristocrat will have an exclusive global license to build land-based NFLthemed slot machines as well as a non-exclusive license for virtual sports games, marking the first deal of its kind for the NFL. The partnership will provide the NFL an opportunity to further drive fan engagement through a new gaming experience. “The world of casino gaming is transforming, and the NFL is thrilled to be teaming up with industry leader Aristocrat Gaming, with their proven track record in slot machine innovation and commitment to responsible gaming,” said Rachel Hoagland, vice president, gaming and partnership management for the NFL. “At Aristocrat, we are changing the game,” said Hector Fernandez, president of Aristocrat Americas

Global Gaming Business DECEMBER 2021

and EMEA. “In that spirit, we are thrilled to enter this agreement with the NFL, whose similar mission made this a natural partnership. Fans worldwide love watching the NFL, and casino players worldwide enjoy Aristocrat games. This agreement presents a new opportunity to reach tens of millions of NFL and Aristocrat fans with exciting new entertainment options on the casino floor and beyond.” The NFL-themed slot machines, which will offer fans the ability to customize their experiences based on their favorite teams, are expected to hit casino floors during the 2023 NFL season.

BALLY’S ACQUIRES CREATIVE GROUP DEGREE 53

ally’s Corp. has announced its acquisition of Degree 53, a Manchester, U.K.-based creative agency that specializes in multi-channel website and personalized mobile app and software development for the online gambling and sports industries. According to the operator, the agency’s “awardwinning approach and diversified skill set will advance Bally’s global omnichannel offering, providing key functionality for integrating Bally’s various mobile platforms.” Degree 53’s team of 54 design and technical experts will continue to operate out of its Manchester studio.

Degree 53’s team offers a range of services, including sportsbook and casino mobile app and website development, complex system integration, data feed management, and API development. By delivering customized technology solutions, Degree 53 will enhance Bally’s diversified mobile platform, which includes integration to the Gamesys Group’s player account management and iGaming solution, in addition to supporting key audience engagement initiatives with Monkey Knife Fight and SportCaller. Degree 53 will also support product development as part of Bally’s media partnership with Sinclair Broadcast Group. “We have ambitious plans for our multifaceted sports offering as we strive to appeal to new audiences across North America,” said Raja B-Sheikh, senior vice president of sports products for Bally Interactive. “The Degree 53 team arms us with a unique perspective and skill set that will further advance not only the core Bally Sports product, but also our ambitious plans for innovative and connected experiences. I am excited to work closely with the team as they contribute to our

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quest of making Bally’s the No. 1 destination for gaming entertainment.” Richard Wagstaff, managing director of Degree 53, said, “Degree 53 was founded in 2013 to provide creative and innovative online and software solutions for the online gaming industry. We are pleased that Bally’s has recognized the differentiated approach that we bring to the market and to join with them during such an exciting period of the company’s evolution. This is an exciting time for online gaming and the sports betting industry, and we look forward to immersing ourselves in the diversified projects that Bally’s provides.” Degree 53 has worked with some of the largest companies in the betting and gaming industry, including Betfred, Scientific Games, FDJ Gaming Solutions, Penn National and GBG, as well as Gamesys brands Vera&John and Rainbow Riches. Degree 53 holds the remote gambling software license from the U.K. Gambling Commission, which allows the organization to build and adapt gambling software for the U.K. licensed operators. It is also an associate member of the European Lotteries.

KAMBI SIGNS SPORTSBOOK DEAL WITH DESERT DIAMOND, SAGINAW CHIPPEWA CASINOS

Kambi’s proven on-property offering, including the Kambi kiosk and Bring Your Own Device technology, as well as harnessing Kambi’s enhanced inevent combinability product, launched in September for the start of the NFL season. Mike Bean, CEO, Desert Diamond Casinos & Entertainment, said, “We are delighted to sign this multi-year agreement with Kambi, which has a proven track record in sportsbook provision across the globe. This exciting partnership provides Desert Diamond with the ability to leverage its longstanding, well-regarded brand to provide our guests with a leading sports betting product across multiple channels.” In Michigan, Saginaw Chippewa Gaming Enterprises Chief Executive Officer Melinda Coffin added, “Our loyal guests and Soaring Eagle team have been anxiously looking forward to sports betting at our casinos. We look forward to working with Kambi Group and providing a great experience for our guests.”

IGT PUBLISHES RESPONSIBLE GAMING POLICY

nternational Game Technology PLC announced that it has released its global Responsible Gaming Policy. The policy was created to transparently in-

form and educate all relevant stakeholders about IGT’s worldwide programs and solutions designed to promote fair play and comply with requirements and regulations on responsible gaming in all jurisdictions in which the company operates. “Responsible gaming is a cornerstone of all that we do at IGT, and an aspect of our business where we demonstrate leadership among gaming and lottery IGT Senior Vice President suppliers,” said Wendy Wendy Montgomery Montgomery, IGT senior vice president of global brand marketing and communications. “In publishing IGT’s Responsible Gaming Policy, we demonstrate important transparency about the tenets of our commitments and the exemplary standard to which we hold our employees, products and partners.” IGT counts a strong governance model, innovation and collaboration with internal and external partners as success drivers for its responsible gaming initiatives. Topic-focused working groups created through this new policy have been developed to explore emerging trends and best practices related to responsible gaming.

ambi Group PLC has signed long-term partnerships to provide its online and on-property sportsbook to two tribal casinos: Desert Diamond Casinos & Entertainment, an enterprise of the Tohono O’odham Nation, which operates three casino properties in Arizona; and Saginaw Chippewa Gaming Enterprises, owned by the Saginaw Chippewa Indian Tribe, to offer sports betting at the Soaring Eagle Casino and Resort in Mount Pleasant and Saganing Eagles Landing Casino and Hotel in Standish. Both casinos will offer retail and online sportsbooks.

The largest tribal operator in the Grand Canyon State, the Tohono O’odham Nation was one of 10 Arizona Indian tribes in August to receive a license from the Arizona Department of Gaming to offer sports wagering in the state. The multi-channel agreement will see Kambi provide its full suite of high-performance sports betting technology, initially rolling out on-property across the operator’s West Valley, Sahuarita and Tucson, Arizona properties in Q4 with an online sportsbook to follow shortly under the newly created entity of Desert Diamond Mobile LLC. Desert Diamond Casinos will benefit from DECEMBER 2021 www.ggbmagazine.com

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PUBLICATION

AN ANNUAL INDUSTRY REPORT

Don’t miss your opportunity to reach tribal gaming executives from all corners of the industry!

GGB Magazine is proud to announce the 2022 edition of TRIBAL GOVERNMENT GAMING: An Annual Industry Report, the most comprehensive publication available covering all Class II & Class III tribal gaming operations. More than just a directory or resource guide, Tribal Government Gaming features editorial coverage of cutting-edge issues such as tribal sovereignty, Indian gaming regulation, economic diversification, nationbuilding, compacts and more.

Tribal Government Gaming is a highly visible publication with a circulation of 20,000, including bonus distribution at NIGA in April 2022, OIGA in August 2022, G2E in October 2022 and other appropriate trade shows and conferences.

Tribal Government Gaming reaches key decisionmakers in the Indian gaming and traditional casino industries, including operators, regulators, manufacturers and vendors.

As an annual publication, Tribal Government Gaming will offer a one-year shelf life providing increased frequency and recall for advertisers. Sponsorship opportunities are available for increased marketing awareness.

Ad Space Deadline: MARCH 17, 2022 I Publication Date: APRIL 1, 2022 For more information on advertising, please contact

Terri Brady, Director of Sales & Marketing

phone: 702-248-1565 x227 I email: Tbrady@ggbmagazine.com

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PEOPLE ALLEN NAMED CHAIRMAN OF AGA

he American Gaming Association last month announced that Hard Rock International Chairman and Seminole Gaming CEO Jim Allen will serve as the associJim Allen ation’s next chairman. The AGA board of directors elected Allen to succeed Aristocrat Technologies CEO Trevor Croker, who has served as AGA chairman since January 2020. Allen’s two-year term begins in January 2022. Allen has served on AGA’s board of directors since 2015, where his leadership and experience has played an integral role in driving association priorities. For 20 years, Allen has led all gaming, hospitality and entertainment operations for the Seminole Tribe of Florida, vastly expanding the tribe’s gaming operations across the state and country. Allen becomes the first representative of a Native American gaming enterprise to become AGA chairman. “This is a pivotal juncture for the gaming industry and I’m honored to serve as the AGA’s next chairman,” said Allen. “The AGA has played an essential role in uniting the industry throughout the pandemic, and I’m thankful to Trevor and the AGA board of directors for entrusting me to help lead the industry’s continued recovery.” “I’m thrilled to welcome Jim as AGA chairman,” said AGA President and CEO Bill Miller. “Jim brings decades of experience in commercial casino operations and tribal gaming—a perspective that will be invaluable as we work to set the industry’s agenda, accelerate gaming’s comeback, and strengthen our value to communities across the country.”

BILLINGS NAMED TO LEAD WYNN RESORTS

att Maddox, who was installed as CEO of Wynn Resorts in February Craig Billings 2018 following the resignation of company founder Steve Wynn amid allegations of sexual misconduct, announced that he will be leaving the company effective January 31, 2022. According to the operator, Maddox has agreed to remain on the Wynn Macau Limited and Wynn Interactive Limited boards through the end of 2022 following a unanimous request by the board. 65

The board unanimously selected Craig Billings, Wynn Resorts president and CFO and CEO of Wynn Interactive, to replace Maddox as company CEO effective February 1. Maddox has spent the past two years guiding Wynn Resorts through the Covid-19 pandemic. He made the decision to pay all employees through last year’s shutdown of operations. He has been with Wynn Resorts for two decades. He led Wynn Resorts through its most difficult period, following the resignation of the company’ founder, followed by the pandemic. During Maddox’s tenure as CEO, he successfully rebuilt the company’s culture and reestablished Wynn Resorts as one of the world’s leading luxury brands. Wynn Resorts was recently recognized by Forbes Travel Guide as being the highest-ranked luxury hotel brand in the world. The Las Vegas resort won the “Best Place to Work” accreditation. Billings joined Wynn Resorts as CFO in March 2017. He has been a board member of Wynn Macau Limited since August 2018. Billings has a history of leadership and innovation in the gaming industry, both domestically and internationally. He has held executive and board positions at Goldman Sachs, where he covered the industry globally, Aristocrat Leisure Limited, NYX Gaming Group, and International Game Technology. Prior to joining Wynn Resorts, Billings honed a global perspective with senior executive positions in both Australia and the United Kingdom during his time as chief digital officer and managing director of strategy and business development at Aristocrat Leisure Limited. He is also the lead independent director and Audit Committee chair for Applovin Corp.

IGT NAMES iGAMING PRESIDENT

nternational Game Technology has appointed Gil Rotem, formerly of Bet365 and 888, as its new president of iGaming. Reporting directly to Gil Rotem IGT’s Chief Executive of Digital and Betting Enrico Drago, Rotem will be responsible for ensuring the ongoing development and global expansion of IGT’s PlayCasino business, which includes iGaming, poker and bingo. Rotem was previously an independent consultant for Bet365, and worked for the operator for 10 years in roles such as group director of gaming strategy and chief operating officer for gaming. Prior to that, he spent five years at 888, first as head of technology and later as director of technology, business production, administration and exchange.

Global Gaming Business DECEMBER 2021

“It’s a tremendous opportunity to join Enrico Drago in leading the IGT PlayCasino team and representing the gaming industry’s most exciting portfolio of iGaming, poker and bingo content,” Rotem said. “During this period of global transformation in the gaming industry, IGT PlayCasino has delivered outstanding results. I look forward to helping propel future growth with IGT PlayCasino as IGT demonstrates the value and promise of its newly established digital and betting segment to customers and shareholders.”

CROWN APPOINTS NEW CEO IN SYDNEY, NEW CORPORATE/BRAND OFFICER

ustralia’s Crown Resorts has appointed Simon McGrath CEO of Crown Sydney and group head of hospitality, effective in February 2022. McGrath will replace forSimon McGrath mer CEO Peter Crinis, who left the company after 24 years. McGrath is currently CEO of Accor Pacific, which operates 397 hotels with 18,000 employees. He has 30 years experience in the hospitality and tourism industry. Crown also has appointed Bank of Queensland Group’s Chief Customer Officer Danielle Keighery to the newly created role of chief corporate affairs and brand officer.

GGB

December 2021 Index of Advertisers

Acres Manufacturing . . . . . . . . . . . . . . . . . . . . . . .7 AGEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 AGEM & AGA Annual Golf Classic . . . . . . . . . . . .43 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Aristocrat Technologies . . . . . . . . . . . . . . . . . .9, 68 Casino Player Media . . . . . . . . . . . . . . . . . . . . . . .39 Elite Chip Care . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Fantini Research . . . . . . . . . . . . . . . . . . . . . . . . . .63 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 GAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 iGP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 Global Gaming Business . . . . . . . . . . . . .10, 60, 61 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14,15, 67 IGT PlaySports . . . . . . . . . . . . . . . . . . . . . . . . . . .23 IT Technology Solutions . . . . . . . . . . . . . . . . . . . .31 J Carcamo & Associates . . . . . . . . . . . . . . . . . . . .37 Tribal Government Gaming . . . . . . . . . . . . . . . . .64 Unity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 World Game Protection . . . . . . . . . . . . . . . . . . . .27

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CASINO COMMUNICATIONS

Kent Young President, Spin Games

ent Young has a long history in gaming. He worked for Aristocrat Technologies for six years and later moved on to lead Aruze Gaming America for two years. In 2012 he founded his own company, Spin Games, and developed a remote gaming server for slot games online just as online gaming was starting to take off in the U.S. Earlier this year, Spin was acquired by Bragg Gaming Group, and will join a company expanding aggressively in the U.S. and around the world. He spoke with GGB Publisher Roger Gros at G2E in October.

GGB: Congratulations on the purchase by Bragg Gaming, and we’re pleased you’re going to remain active. Kent Young: I’m sort of part of the sale, so to

speak, so I’ll be staying on with the company, which I’m actually very excited about. It’s a new chapter, in both my book and the company’s book. So it’s very exciting. We’ve got a terrific future together. What was the attraction for Bragg to get Spin Games?

Bragg has primarily been operating in Europe. As part of the Bragg acquisition strategy, they acquired a company called Oryx, which has got a very good position in the European market, with excellent technology. So they really wanted to work out how they’d get into the U.S., and how to take advantage of the growth opportunities, obviously, as we’re all seeing the in iGaming space. At Spin, we have multiple licenses. We have multiple distribution points, so we operate with all the key operators. So it was a very good fit in terms of the being able to come in and acquire an already-established company. They’re extremely synergistic. So, we’re going to take a business that’s primarily European and leapfrog them into the North American market.

Does this take Spin to the next level?

Absolutely. We were a startup initially. We started literally with a couple of people out of Reno, Nevada. And you know, we’ve grown up. We’ve grown into a sizeable iGaming RGS supplier. So this now gives us a significant amount of resources. Bragg is a publicly listed company on the Toronto Exchange and on the Nasdaq. So it gives us capital—as any startup, we’ve always been somewhat limited on the capital side. We can really invest in all facets of the business. Sensibly, of course. How long has Bragg been around?

Bragg’s been operating for about six years, originally as a private company, until they went public early last year. As I mentioned, they acquired Oryx Gaming. And then they also acquired a company called Wild Streak, which is a content company. A gentleman by the name of Doug Fallon actually used to work for me at Aristocrat, and many years ago went out and started his own content company doing both land-based and iGaming. It has done exceptionally well. They’ve got the consistent No. 3 game in New Jersey in iGaming. When they announced the purchase, Bragg also announced, as part of that acquisition, that Doug would be the chief content officer. Has it been a smooth transition so far?

We’re still in the closing phase. We won’t close until towards the end of this year. In saying that, we’ve started to work together. The company’s got a great team. The technology is fantastic. The R&D capabilities are some of the best I’ve seen. They’ve got some great value-added products; we’ve got a product engagement tool, called Fuze, which is basically a promotional tool that sits on top of a remote gaming server, so you can essentially do marketing-driven promotions that interface with the game. It’s not RNG-driven; it’s very much promotional. It really hits the mark, in terms of the level of maturity in North Amer-

Global Gaming Business DECEMBER 2021

ica, which has primarily been just a content play so far. Fuze is what I’ll call a marketing spin play, a tool that drives player engagement. How many states and jurisdictions are you licensed in?

We’re licensed in five jurisdictions, and that’s including British Columbia. Connecticut was our fifth. So, we’ve got New Jersey, Michigan, Pennsylvania, British Columbia, and now Connecticut. We’re live in New Jersey, Pennsylvania and Michigan, hopefully going live in British Columbia Q1. And then, depending on the timing of Connecticut, it will either be later this year or early next year. Michigan seems like it was a big success so far.

I think Michigan has been outstanding for the industry, particularly the fact that it’s been tribal, as well as commercial. It’s really the first tribal iGaming regulated market. So, again, I’m very bullish on that because I think that can be the catalyst for more regulated tribal jurisdictions, similar to what happened with Class III games years ago. I’ve always been a strong believer that once tribal is successful in iGaming, that will be a catalyst for the local market. I spent a lot of time this summer in New Jersey, and sometimes the amount of games some of the iGaming sites offer is overwhelming. What’s the key to developing a successful game?

In the early days, it was very much a volume play. Every operator wanted as much content as possible because that was really the competitive advantage. When you put a new game in the market, you can see it peak, because players want to try it. We’re now at roughly 1,000 games, give or take a few, in New Jersey. A lot of the operators now are being a lot more selective. Once games fall off, they’re starting to take them off the site, and they’re being a lot more selective about what you’re offering. Look, it’s no different in land-based casinos. Games have life cycles.

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Global Gaming Business, December 2021

Articles inside

Goods & Services

Cutting Edge

Emerging Leaders

AGA

Frankly Speaking

New Game Review

Fantini’s Finance

The Agenda

5 Questions