Global Gaming Business June 2021 by Global Gaming Business

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GGB Global Gaming Business Magazine

WAlKING BAcK THe WIRe AcT ARe RAcINoS HISToRY? BUSINeSS INTellIGeNce PlAYSTUDIo’S ANDReW PAScAl

June 2021 • Vol. 20 • No. 6 • $10

Melco’S MeSS

Coming to

Why the ill-fated bid to buy Crown Resorts was sidelined

Las Vegas Genting’s Resorts World is the first new resort to open on the Strip in 10 years

Covid Connections How the pandemic has changed gaming

Association of Gaming Equipment Manufacturers

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CONTENTS

Vol. 20 • No. 6

june

Global Gaming Business Magazine

COLUMNS

24 COVER STORY A Strip Premier

12 AGA By the Numbers

This month marks the unveiling of the first new Las Vegas Strip resort in 11 years, as Genting’s $4.3 million Resorts World Las Vegas opens with a world-class integrated resort offering a huge casino, private gaming salons, 600,000 square feet of food and beverage offerings, A-list headline entertainment, nightclubs, day clubs and more.

David Forman

14 Fantini’s Finance One in a Million Frank Fantini

46 Making My Point Words of Love Roger Snow

By Roger Gros

DEPARTMENTS

FEATURES

The Agenda

18 Melco’s Dilemma

By the Numbers

The failed bid of Melco Entertainment to buy into Crown Resorts has revived questions concerning CEO Lawrence Ho’s longstanding claims that his father, the late casino legend Stanley Ho, had no involvement with Melco.

The federal Wire Act was meant as a targeted law to battle the dominance of organized crime in sports betting. Here’s why that fact limits the law’s scope today.

By Muhammad Cohen

By David G. Schwartz

36 Defining the Wire Act

28 Bouncing Back

42 The Power of Data

As the casinos emerge from the Covid-19 pandemic, it becomes clear that the industry has not only survived the crisis, but has positioned itself well for the future.

Business intelligence technology is helping operators drill down available data to gain a complete view of their customers.

By Michael Soll and Michael Zhu

32 Revisiting Racinos Nearly 30 years after the racetrackcasino model first appeared, stakeholders are pushing to evolve the racino model as a way to preserve the survival of horse racing.

By Dave Bontempo

10 5 Questions 15 AGEM 40 Emerging Leaders With Aristocrat’s Meghan Sleik, JCM Global’s Mike Nguyen, and Continent 8’s Charlotte Cain

45 Frankly Speaking 47 New Game Review 48 Cutting Edge 50 Goods & Services 53 People 54 Casino Communications With Andrew Pascal, President & CEO, PlayStudios

By Marjorie Preston

JUNE 2021 www.ggbmagazine.com

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THE AGENDA

That Vision Thing By Roger Gros, Publisher

t was only a few years ago I feared for the future of the casino industry. Where were the new visionaries now that the older ones were fading away? How would the industry survive if it was to become just another corporate system with little innovation and fewer opportunities to succeed? Steve Wynn had been dismissed. Sheldon Adelson was aging and passed away just this year. Others were long gone, some still alive but retired. Kirk Kerkorian, Jack Binion (his father Bennie was a legal gaming founder), Jackie Gaughan, Lyle Berman, Stanley Ho, Charles Mathewson, Kerry Packer, Johann Graf, Claudine Williams, Peter Carlino, Mickey Brown, Jay Sarno, Phil Satre, Craig Neilson… if you don’t recognize any one of these names, please use Google. They all truly had a vision for where the industry was headed, and that vision was confirmed by their success or at least by the companies or casinos they founded. Apologies to whoever I didn’t mention because visionaries were many in the early days of legal gaming. But just a few years ago, there weren’t any new visionaries, at least that were evident to me. The industry was controlled by the big corporations, many of which were founded by the visionaries. And no offense to these corporations. Caesars and Harrah’s, MGM, Penn National, SJM, Crown… great companies all, but they were growing the traditional way—mergers and acquisitions, cost cutting and analytical management. Lots of success but little understanding where the industry was going. But the new visionaries slowly began to emerge. It’s a far different world than it was when gaming was first legalized (as evidenced by the vast number of people I considered visionaries). Gaming is now almost a traditional industry, so it’s difficult to first find a way to differentiate yourself from the competition, but it’s even harder to identify something no one else has done— the hallmark of visionaries. Luckily, we’ve begun to recognize the new visionaries. We’ve highlighted them in recent issues of GGB, so you don’t have to do much research. Let’s start with last month’s cover story, Soo Kim, the chairman of Bally’s Corp. The new Bally’s was a small Rhode Island casino called Twin River, but Kim understands that to build a gaming giant in today’s world, you have to control all the channels—and not just gaming, but

Global Gaming Business JUNE 2021

also sports and entertainment. And he understands that you need to control the technology at the same time. The rapid growth of Bally’s is evidence of his commitment and his vision. Derek Stevens got into gaming because he loved the atmosphere of Las Vegas when he would visit from his hometown of Detroit. So when he bought the Golden Gate, and later the D (the former Fitzgerald’s) in Downtown Las Vegas, he was only getting his feet wet. But when he opened the Circa at the foot of Fremont Street, he demonstrated he knows exactly what the public wants when it comes to sports betting and entertainment. The rise of cashless gaming seems to have happened quickly during and following the pandemic, but new Sightline CEO Joe Pappano has been shepherding his message for years. Sightline was an early entry into this field, but Pappano has always been on board and the company is ready to truly transform the way gaming handles money. Tom Reeg. You might not expect the president of Caesars to be included in this list because Caesars is still the giant of the industry. But consider that Reeg steered the tiny Eldorado Resort from its Reno base to a journey across the nation gobbling up regional casino companies until he could approach Caesars and get the support of investors who believe in his dream and his system. Yes, the jury is still out when it comes to whether the Eldorado approach will work with the giant corporation, but it’s a compelling idea. But if you add Reeg, you can’t ignore folks like MGM’s Bill Hornbuckle, Everi’s Mike Rumbolz or Penn’s Jay Snowden. Hornbuckle has guided the giant MGM through the pandemic with an eye to reigniting his Las Vegas properties and the interactive future with BetMGM. Rumbolz has combined the industry’s leading payment provider with an innovative slot company. And Snowden took over from the very talented Tim Wilmott, to make Penn a leader in sports betting, with a joint venture with Barstool, and the creation of a new game studio for iGaming. So I know visionary is a subjective term and it’s not to be bestowed on every leader of every gaming company. A person with vision needs to understand where the industry is going and how to get there in a way that no one else can understand. So fear not. The industry is in good hands. We might not recognize them today, but the visionaries are lurking and ready to pounce for the good of the entire business.

Vol. 20 • No. 6 • JUNE 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 | David Forman| Roger Snow Contributing Editors Dave Bontempo twitter: @bontempomedia Muhammad Cohen | Chloe Paul | David G. Schwartz Bill Sokolic twitter: @downbeachfilm Michael Soll | Michael Zhu __________________

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

Success is never achieved alone. To taste victory in sport, and in business, teamwork matters. A trusted partner that shares your vision, your goals, and your strategy, will elevate your game and take you to the next level. Partner with confidence. Partner with Kambi. Reach new heights and join the industry’s premium sports betting network.

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BY THE

NUMBERS

BorDer warS C

anada has permitted parlay betting on sports for more than a decade but taking that next step to single-game sports betting has been elusive. As a result, the vast majority of money wagered on sports in Canada is bet illegally. A report by the Canadian Gaming Association shows that a criminal branch of the Hell’s Angels motorcycle club made over C$131 million over the past five years. A bill, the Safe and Regulated Sports Betting Act, is moving through the Canadian Parliament that would rectify that situation, but its passage is far from certain. The CGA report outlines exactly how much money is at stake, and emphasizes that the passage of the act would protect consumers, support almost 200,000 jobs across Canada, and cut off customers looking for legal betting options in the U.S. Of the 10 U.S. states that directly border Canada, nine of them are either considering sports betting legislation or are actively taking bets. To download a copy of the report, visit CanadianGaming.ca.

FeeT Don’T Fail Me now

veryone knows the devastation casinos experienced when the pandemic hit in March 2020. U.S. casinos were closed for multiple weeks stretching into months. Once reopened, traffic returned slowly, took another hit in the fall of 2020, but has recovered nicely as we enter the summer of 2021. Jefferies issued a report in May that showed the progression of casino foot traffic since the pandemic in April 2020. But the report says the real measurement should be made with 2019, not 2020. “Importantly, the recalibration of GGR versus volume should prove critical for operators in all markets, which we believe highlights the value of the data herein. In short, foot traffic was minus-28 percent in April versus 2019 levels, and sequentially better than minus-35 percent in March,” wrote Jefferies analyst David Katz.

Global Gaming Business

JUNE 2021

annual Sports wagering in Canada

Progression of Casino Foot Traffic

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NUTSHELL

“They

Questions Sara Slane President & Founder, Slane Advisory

he third anniversary of the U.S. Supreme Court decision overturning the Professional and Amateur Sports Protection Act (PASPA) was celebrated in May. The American Gaming Association then took the lead in a campaign to legalize sports betting in jurisdictions across the U.S. Sara Slane took the lead in that effort, and was hugely successful. Today, 30 states and territories have active or legal sports betting. Slane now heads up her own consulting company advising jurisdictions and companies about how to enter the U.S. sports betting market. She spoke with GGB Publisher Roger Gros about the rapid deployment from her home office in Maryland in April. For a full audio and Zoom podcast of the interview, visit GGBMagazine.com.

GGB: It seems like an eternity, but it has only been three years since the reversal of PASPA. How surprised are you that so many states have legalized sports betting in that time? Sara Slane: I’m shocked that so many states have legalized sports betting in such a short time. At the

1 2 3 4 5

end of the day, we thought that we’d have around 43 states that would legalize sports betting, but we didn’t expect it to go so quickly.

One of the major states, New York, just legalized mobile sports betting. What’s your assessment of that law?

Said It”

“It was so emotional. We’ve been waiting 400 days for this to happen. All I can say is I feel relief, and I went through a lot of happy emotions. I saw a lot of tears in the eyes of our people that were tears of joy.” —Daniel Lamarre, CEO, Cirque du Soleil, on the return of Cirque shows to Las Vegas this summer

CALENDAR June 9-10: Canadian Gaming Summit. For more information, visit CanadianGamingSummit.com. DIGITAL June 14-16: International Gaming Summit 2021, Culloden Estate and Spa, Belfast, Northern Ireland. Produced by the International Association of Gaming Advisors (IAGA). For more information, visit TheIAGA.org. LIVE June 21-25: ICE Connect Virtual Summit Europe, ExCeL London. Produced by Clarion Gaming. For more information, visit quartzevents.com/events/ virtual/ice-connect-virtual-summit-summer-2021-uk. DIGITAL

I’m pretty passionate about this piece of legislation because I think it’s terrible for the industry. On one hand, I’m glad New York finally got the full legalized sports betting. On the other hand, it’s a “be careful what you wish for” situation. This has set up a race to the bottom on tax rates. It wasn’t a thoughtful process. It doesn’t look at the holistic picture for the industry. If New York had done some interesting things it would have moved their entire gaming industry forward and would have been a much larger economic driver for the state.

July 13-15: National Council of Legislators from Gaming States (NCLGS) 2021 Summer Meeting, InterContinental Magnificent Mile, Chicago, Illinois. For more information, visit NGLGS.org. LIVE

We’ve seen some hiccups with the state lotteries running sports betting, certainly in Washington, D.C. and in Tennessee. Is it a bad idea to have the lottery in charge?

August 10-12: Australasian Gaming Expo, ICC Sydney, Darling Harbour, Sydney, Australia. For more information, visit austgamingexpo.com. LIVE

I wouldn’t want to paint a broad brush stroke against the lottery. I don’t think that’s the issue. Let’s not forget sports betting is a new industry and states aren’t used to it. Adopting best practices and looking at what other states have done is the best way to go. You don’t have to recreate the wheel. There are some very good examples of how states have handled this, so you just need to rinse and repeat. I’m not sure why Tennessee has stumbled out of the gates, but I don’t think you can blame it on the lottery or any individual. Is it because the lotteries are used to huge profits? Several lotteries have required that they make a 10 percent profit, when in the real world a 5 percent profit is a banner year.

I think when you set a monetary goal of the most amount of money possible in very black-and-white terms, it’s going to lead to very bad policies. When will states realize that the taxes they can make from online gaming will dwarf sports betting taxes?

I wish I had the special sauce to answer that question. I’ve spent 10 years explaining the numbers and it’s tough. There is still belief, although there is no proof, that cannibalization is going to occur. There’s still the perception that having a mobile casino will mean people will be less interested in going into the bricks-and-mortar operation. It’s a tough sell. The ease of access is also a hurdle to overcome. The flip side is that it’s happening around the world, and we’re making progress with online sports betting. And done the right way, it really completes the package on an omnichannel delivery system.

Global Gaming Business JUNE 2021

July 19-22, NIGA Indian Gaming Trade Show & Convention, Caesars Forum, Las Vegas. For more information, visit indiangamingtradeshow.com. LIVE

August 17-19: G2E Asia, the Venetian Macao. Produced by Reed Exhibitions and the American Gaming Association. For more information, visit G2EAsia.com. LIVE August 16-18: OIGA Conference & Trade Show, Oklahoma City Convention Center. For more information, visit OIGA.org/tradeshow. LIVE September 12-17: International Masters of Gaming Law (IMGL) Autumn 2020 Conference, Marriott Copley, Boston, Massachusetts. Produced by the IMGL. For more information, visit IMGL.org/ conferences/autumn/overview/2021. LIVE September 21-24: SBC Summit Barcelona, Fira Barcelona Montjuïc, Spain. Produced by SBC. For more information, visit SBCEvents.com. LIVE October 4-7: Global Gaming Expo (G2E), Sands Expo Center, Las Vegas. Produced by the American Gaming Association and Reed Exhibitions. For more information, visit GlobalGamingExpo.com. LIVE

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AMERICAN GAMING ASSOCIATION

By the Numbers Like every industry, gaming was severely impacted in 2020, and the annual State of the States report reflects the issue By David Forman

ach year, the American Gaming Association’s “State of the States” report provides the definitive analysis of the commercial gaming industry’s performance. 2020 was a different year for nearly every industry—and gaming was certainly no exception. As a result, this year’s report is a little different. In addition to our regular coverage of state revenue, taxes, competitive landscapes and regulatory changes, we also detailed the impact of industry closures and operating restrictions in each of the 30 commercial gaming jurisdictions. Let’s take a deep dive into the numbers and what they mean for gaming’s recovery. Nationwide, commercial casinos lost nearly 46,000 days of business due to pandemic-related closures, driving full-year commercial gaming revenue down 31 percent to $30 billion, the first annual market contraction in seven years and

nation. In contrast, states like South Dakota (-4.5 percent GGR), Mississippi (-18.4 percent GGR) and Iowa (-21.5 percent GGR) —which all reopened sooner than others and avoided subsequent pandemic-related shutdowns—saw more modest revenue declines. These trends demonstrate that casinos saw solid consumer demand when open in 2020 despite restrictions on capacity and many amenities. Like in other sectors of the economy last year, gaming consumers moved some of their business to online options. While only available in four states in 2020, total internet casino gaming revenue increased to $1.55 billion for the year, up 198.9 percent against 2019. Revenue in New Jersey, the largest internet gaming market, doubled to $970.3 million. Next door in Pennsylvania, internet gaming revenue totaled $565.8 million for the state’s first full year of legal online

“

One major trend to watch over the coming year will be how physical casinos rebound in states with iGaming compared to those without. lowest overall total since 2003. Annual gaming revenue at the state level closely correlated with the duration and severity of local closure orders established to mitigate the spread of Covid-19. New Mexico (-78.8 percent GGR) reported the sharpest decline in annual commercial gaming revenue in 2020, as casinos were ordered to close in mid-March and were unable to reopen for the rest of the year. Revenue declines of more than 50 percent were also reported in Michigan (-56.1 percent GGR), where casinos shuttered for a second time in November after already facing the most stringent reopening capacity restrictions in the

Global Gaming Business JUNE 2021

”

gaming. One major trend to watch over the coming year will be how physical casinos rebound in states with iGaming compared to those without. Sports betting also grew significantly in 2020, with expansion into five new states and Washington, D.C., offsetting the scrambled sports calendar and temporary closures of physical sportsbooks. Total revenue from commercial and lottery-run sports betting operations rose 68 percent to $1.55 billion in 2020. Despite the drastic fall in gaming revenue, the major takeaway from these figures is that, considering all the challenges of the pandemic, nationwide gaming revenue didn’t drop nearly as

much as it could have. Dramatic rises in sports betting and iGaming revenue buoyed the industry, and as health and safety restrictions eased, many Americans showed they were ready to make casinos their entertainment destination of choice once again. With vaccines widely available and pandemic restrictions gradually lifting, gaming is primed for brighter days ahead. Many consumers are emerging from the past year in better financial shape and with more economic optimism than they had prior to the pandemic, and we’re already seeing evidence they want to return to casinos. In many regional gaming markets, like Indiana, Iowa, Mississippi and Pennsylvania, among others, early 2021 gaming revenue has returned to the growth trajectory it was on before the pandemic. And major gaming destinations like the Las Vegas Strip, where gaming revenue continues to climb to pre-pandemic levels, are beginning to follow. This past March, Las Vegas Strip gaming revenue reached 91 percent of March 2019 levels while revenue for Nevada’s entire gaming market saw its highest total since February 2013. New casino or sports betting markets are also poised to open in the coming months in states like Arizona, Maryland, Louisiana and Nebraska, which will add to gaming’s growth opportunities. Once we are fully on the other side of the pandemic, the second coming of the “Roaring ’20s” has been a popular prediction. If that does indeed come to fruition, it’s clear gaming will be one of the biggest beneficiaries, as we’ve proven we can face any challenge head-on and still meet the highest standards of safety, hospitality and entertainment. I couldn’t be more optimistic about our future. Dave Forman is senior director of research for the American Gaming Association.

ILLUMINATING YOUR PATH TO GREATNESS

LETTER FROM THE CEO To all our clients and partners around the world, The pandemic has been difficult for all of us in the gaming, lottery, and hospitality industries, compelling us to reinvent our businesses overnight, while dealing with the loss of loved ones and battling the emotional hardships that will leave a lasting impact on us and our families. Though 2020 was one of the most challenging times for our industry and the world, I’m excited that we have been able to take the steps necessary to return to a more normal life. Personally, I’ve taken this time to reflect on our business, ensuring that our global team of 1,200+ advisers, testing personnel and security team members continue to serve you and your shifting needs. Since our founding in 1989, GLI has always focused on helping our clients thrive, no matter the circumstances. Working with you to solve difficult problems and create growth and success is what drives us; it’s in our DNA. During the pandemic, we recognized that clients needed not only a trusted testing lab, but a strategic adviser to help them evaluate and capitalize on new opportunities across the globe. We were quietly ready to help. We helped clients transition to cashless technologies and pivot into new global iGaming and digital markets at an accelerated pace. As global cybersecurity threats reached an epic level, Bulletproof, a GLI company, worked tirelessly to provide security services to clients including security and penetration testing, security audits, end-to-end network security, and 24/7/365 monitoring. As an industry, we’ve learned a lot and should be proud of our collective agility. As we emerge from the pandemic and shutdowns, we are ready to expertly help our 480+ regulatory and lottery clients, as well as operators and suppliers to understand new legislation, regulations and cybersecurity requirements. We’ve reinvigorated our end-to-end compliance and testing road map to better accommodate all your needs, from the earliest quality assurance tests and user acceptance testing, straight through to final compliance certification. We’ve also reshaped our leadership team for the GLI of tomorrow with an even greater focus on client partnership, world-class service delivery, and team member growth and engagement. Our global team of advisers and testing personnel has been hard at work preparing for what’s next. We can leverage decades of experience to help you achieve your goals—no matter how big or small, or how unique the challenge. At GLI, this has always been our core mission, and as we look toward the future, it will remain our ongoing promise to you. Simply put, we’re ready whenever you’re ready. I cannot thank our clients and partners enough for your continued collaboration and trust as our industry returns stronger than ever.

Sincerely,

James Maida gaminglabs.com

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FANTINI’S FINANCE

One in a Million Lower cost structures mean higher profits for smart gaming companies By Frank Fantini

here has never been a set of earnings reports released as we saw for the first quarter of this year. Casino company after casino company announced growing profits, some ahead of the preCovid year of 2019 despite lower revenues. CEO after CEO crowed about rebounding business and proclaimed that they will maintain their new lower cost structures even after business volumes normalize—meaning that growing revenues will translate into higher EBITDA that will translate into greater free cash flow. Debt levels, an acute concern when the pandemic forced nearly universal property closures last spring, will come down, positioning them to again invest in growth, they promised. Perhaps best typifying this ebullient spirit was Caesars CEO Tom Reeg. Reeg is not given to histrionics. He speaks quietly in tone and measured in words. As a CEO, he consistently under-promises and over-delivers. On his first-quarter investor call, Reeg was asked by analyst Carlo Santarelli of Deutsche Bank about Caesars achieving $1 billion a quarter in EBITDA. “I would be disappointed if 2022 was less than $4 billion of EBITDA,” Reeg responded. And on the future based on customers returning to casinos: “I think the demand for entertainment and just fun after the last 12 to 14 months is going to be like nothing any of us have seen in our lifetimes.” Sell-side analysts responded to the earnings of various companies with equal enthusiasm. Santarelli said companies often beat consensus earnings forecasts, but Boyd bludgeoned them. Steve Wieczynski of Stifel called Boyd’s margin expansion beyond impressive, as examples of reaction to one company’s earnings beat. Stock price targets were raised all around. In this bull market, that combination should have driven their stock prices and those of their regional peers into the stratosphere. Instead, with a few exceptions, stocks slipped. As examples, in the three days after their earnings

Global Gaming Business JUNE 2021

beats and buoyant outlooks, Boyd slipped 3.64 percent and Caesars 2.26 percent, as examples. However, their year-to-date performances remain strong with Boyd up 56 percent and Caesars up 41 percent. Given further perspective, both stocks are quintuples from their 52-week lows. Further evidence that bulls are at least taking a break comes from Penn National and DraftKings, two darlings of the sports betting crowd for whom valuations and profits appear to have little meaning. PENN has been the best performer among S&P 500 stocks over the last year, up 500 percent. That is a pretty heady achievement for the company that started with one small racetrack in rural Pennsylvania and that just in March joined the list of America’s blue chips.

stocks just taking “aAre breather before their

next run up or is all the good news already in the stock prices, as the old saying goes?

”

However, the stock has come back to earth, now down around 40 percent from its $142 high. And DraftKings, which isn’t expected to turn a profit for a least a couple of years, is down nearly 40 percent from its highs. This leaves investors to question whether the stocks are just taking a breather before their next run up or whether all the good news is already in the stock prices, as the old saying goes. And in the case of DraftKings, whether the euphoria over growing revenues is starting to recede and some investors are starting to ask, “When and where are the profits?” Our take is that for the casino operators like Caesars, Boyd, Red Rock Resorts and others, there is a need to let fundamentals catch up with their prices, but that if the good times do roll as ex-

pected, there will be another leg up, and maybe a big one.

THE LITTLE ENGINES THAT COULD Meanwhile, the smallest of the regional operators by market cap haven’t taken a breather. Here are their advances year-to-date as of this writing: Century Casinos Full House Resorts Golden Entertainment Monarch Casino

+97 percent +149 +110 +20

These companies have some commonalities. Golden and Monarch are heavily Nevada-oriented. Full House and Monarch have transformational projects in Colorado developing destination resorts in markets that have eliminated bet limits. Monarch’s project in Black Hawk is open. Full House’s project in Cripple Creek is about to get under construction. Golden is expected to reach $5 or even $5.50 a share in free cash flow in a year or two, meaning its current $41 stock price should have room to run. Century is just 5.9 times 2023 enterprise value-to-EBITDA, according to analyst Dave Bain of B Riley. For those who want to gamble on a gambling stock, Golden also has Pennsylvania to consider. The company has been lobbying hard for liberal slot route legislation in the Keystone State, which Bain thinks could be approved by autumn. If Pennsylvania expands routes, each thousand machines could be worth $7.35 a share to Golden, Bain calculates. He thinks a market of 30,000 machines is possible with Golden getting 25 percent share. Using his valuation, that translates to $55 to the stock price. That is blue sky thinking, but an interesting “what if.” 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

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AGEM Board of Directors Actions for May 2021 • The AGEM monthly meeting for May kicked off with Executive Director Marcus Prater sharing some positive industry news with the membership. He reported that gaming activity in Nevada during March produced the highest revenues since 2013, with regional casino revenues right across the U.S. also on the rise. As a result of the overwhelming numbers of casino staff being vaccinated at a few of the largest Las Vegas Strip casinos, 100 percent capacity is now being allowed. Casinos in Macau also reported hotel occupancy at or above 90 percent, another positive trend. Suppliers too are starting to see improvements, and it certainly seems like a corner has been turned. Indeed, there is also a possibility that the AGEM June monthly meeting may be the first in-person get-together since last March. A decision will be made by the board in the next few weeks depending on progress and the lifting of restrictions. • AGEM members were informed Brittnie Watkins, an attorney with the Las Vegas law firm Pisanelli Bice PLLC, was recently named by Governor Steve Sisolak to the Nevada Gaming Control Board. She replaces Terry Johnson, whose term ended in May and who has been a board member since November 2012. AGEM welcomes Brittnie to the NGC and looks forward to working with her. • Gaming reform measures Assembly Bill 7 and Assembly Bill 8 from the Nevada Gaming Control Board were finally passed by the state legislature’s lower house at the end of April. Among other things, AB 7 would amend processes for the Nevada Gaming Commission’s approval of new casino games, while AB 8 would allow digital signatures for redemption of wagering vouchers. Separately, the Gaming Control Board scheduled but then postponed a May 13 workshop to discuss draft regulations to allow for online casino games. It is expected this will now be rescheduled after the legislative session. • Following the release by the Japan Casino Regulatory Commission (JCRC) of draft regulations, the AGEM Officers and Compliance Committee has been collating feedback regarding the wording of technical standards as well as considering best practices from other gaming jurisdictions around the world. Due to the close working relationship AGEM has developed with the JCRC, a shared folder has been established with the commission where AGEM can place documents at any time. • AGEM members recently approved and welcomed three companies for membership. New Bronze member Play’n GO, with hubs in the U.K., Malta, Sweden, Hungary and the Philippines, is a leading software development company to operators in the gambling industry. Fantalooks, based in Incheon, South Korea, which supplies customized display solutions to the casino, sports betting and amusement machine industries, was approved as an Associate member, along with Theatro, based in Richardson, Texas, which provides software solutions that enable employees in gaming, hospitality and retail to pro vide outstanding customer experiences, while driving employee productivity and operational profitability.

Forthcoming Events

• AGEM Associate member The Innovation Group will once again co-sponsor its annual recognition program, the Emerging Leaders of Gaming’s “40 Under 40,” along with GGB Magazine. ELG was created to support young executives on the path to industry leadership through education, networking and other career development opportunities. Nominations are currently open, with information available from the Global Gaming Business website at ggbmagazine.com/40-under-40-nominations.

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The AGEM Index increased by 94.3 points to 858.43 points in April 2021, a 12.3 percent gain from March 2021. In the last month, the majority of AGEM Index companies reported increases in stock price, with 11 posting positive contributions and two recording to the index. The Index’s was driven by a 51.9 percent increase negative contributions AGEM April 2021 growth in the stock price of Scientific Games Corporation (Nasdaq: SGMS), which rose from $38.52 to $58.52. The stock was responsi ble for 49.89 points of the AGEM Index’s monthly growth. Another significant index contributor in April was Aristocrat Leisure Limited (ASX: ALL), which added 30.91 points due to an 8.2 percent stock price gain from $34.35 to $37.17. The major stock indices also performed well over the month as the Nasdaq and the S&P 500 experienced monthly gains of 5.4 percent and 5.2 percent, respectively, while the Dow Jones Industrial Average grew by 2.7 percent.

JUNE 2021 www.ggbmagazine.com

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Crowned Prince Lawrence Ho’s failed bid for Crown Resorts reveals hidden-in-plain-sight ties to Stanley Ho, raising doubts about Melco leadership’s credibility and judgment By Muhammad Cohen

hroughout his 15 years as chairman and CEO of Melco International Development, Lawrence Ho has claimed his father, longtime Macau casino kingpin Stanley Ho, had no involvement with the company. Melco’s failed attempt to buy 19.99 percent of Australia’s Crown Resorts highlights that Lawrence Ho wasn’t telling the whole truth. Every Melco International annual report from 2006 through 2019 shows Stanley Ho had a financial interest in Melco International, the Hong Kong-listed holding company that controls Melco’s operating arms, Nasdaq-listed Melco Resorts and Entertainment and NYSE-listed Studio City International. Until his death in May last year, Stanley Ho was a beneficiary of family trust Great Respect, owning 312.7 million shares, 20.6 percent of Melco International, accordLawrence Ho at the opening of Macau’s Studio City ing to its most recent Hong Kong Stock Exchange filing. Stanley Ho was the father of Macau gaming, but his involvement in Great Respect is also among 59 entities gaming outside of Macau was often questioned because of alleged that New South Wales bans from “new busities to the criminal triads in the SAR ness activities or transactions of a material nature” with Crown as part of the 2014 gaming license granted for Crown Sydney, a prohibiCrown and that winning regulatory approval in Australia would help its tion regulators put in place specifically for “whatever-it-takes” effort to win a casino license in Japan. “prevention of associations with Stanley Ho.” Authorities in the U.S. and reportedly in Australia and Canada deemed Ho unsuitable due Lawrence Ho’s claim that he’s a self-made mogul—even though his father to alleged criminal associations, claims Stanchaired Melco International and its gaming activities ran under the elder ley Ho long denied, emphasizing he had Ho’s SJM Holdings concession until 2006 when the younger Ho took over never been formally charged with a crime, let as chairman and CEO at age 29—runs so deep within Melco that former alone convicted. high-ranking executives were shocked to learn Stanley Ho retained Melco Despite New South Wales’ explicit prohibition against Stanley Ho associownership. Constant repetition may have led Lawrence Ho himself to beates, including Great Respect, Melco announced in May 2019 it would aclieve it. quire 19.99 percent of Crown in two equal tranches for $1.22 billion through In August 2019, New South Wales’ Independent Liquor and Gaming Melco Resorts. Lawrence Ho declared Melco would seek a full takeover of Authority (ILGA) announced a probe into Melco’s proposed acquisition

Self-Made Myth

Global Gaming Business JUNE 2021

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The friendship between former Crown Chairman James Packer and Melco’s Lawrence Ho turned out to be costly for Melco

under former Supreme Court Chief Judge Patricia Bergin. Melco, Crown and ILGA have all chosen not to answer questions for this article. Crown has been devastated in the aftermath of the Bergin Inquiry, which veered into an examination of Crown’s relationship with its former chairman James Packer and Chinese high rollers following July 2019 media exposes. Inquiry findings, released in February, compelled Crown top executives and five board members to resign, led New South Wales to suspend the gaming license for new $1.7 billion Crown Sydney, prompted license reviews for Crown’s flagship Melbourne and Perth casinos, and left Packer’s reputation in tatters. Crown has announced it will no longer do business with junket promoters, cutting it off from a major chunk of Asia’s VIP business. Melco, despite triggering the Bergin Inquiry, has paid little price. Melco shareholders lost $235 million, virtually erasing 2019 company profits, on the 9.99 percent of Crown bought in June 2019 at A$13 (then $9.04) a share and sold in April 2020 at A$8.15. Melco International shares were the worst performers among Macau’s six casino concessionaires in 2020. Nevertheless, the company has raised $1.5 billion from capital markets since the ill-fated bid and faced no known questions about the deal from market or gaming regulators outside Australia. Lawrence Ho, who controls 59 percent of Melco International shares, received a $19 million performance bonus after engineering a deal that raises questions about Melco leadership’s credibility and judgment.

Memory Lapse “It might actually be possible that everyone simply forgot that Stanley Ho was involved in Melco,” says former Australia regulator and the Agenda Group director Peter Cohen. Packer, for one, told the Bergin Inquiry he “forgot” about the New South Wales ban. “I suspect the issue with Stanley Ho was more a misunderstanding than any party blatantly ignoring their obligations,” Cohen, based in Melbourne, adds. Any amnesia appears short-lived. Within four weeks of the Crown acquisition, Lawrence Ho disposed his stake in Lanceford, another New South Wales banned entity, holding his portion of Stanley Ho’s fortune distributed following the 2010-11 family feud. Melco didn’t offload Great Respect but did try to conceal Stanley Ho’s stake to those that didn’t read annual report footnotes. Melco told Reuters in August 2019, Stanley Ho “does not exercise any influence on any financial and operating policies or other matters,” without acknowledging its link to Great Respect. Melco management’s October 25, 2019 shareholder circular explaining the Crown deal, running more than 450 pages, never mentions Stanley Ho. The circular states: “Great Respect Limited is a company controlled by a discretionary family trust, the beneficiaries of which include Mr. (Lawrence) Ho and his immediate family members.”

By contrast, Melco International’s 2018 annual report released March 29, 2019 states: “Great Respect Limited is a company controlled by a discretionary family trust, the beneficiaries of which include Mr. Ho, Lawrence Yau Lung and his immediate family members (including his father, Dr. Ho Hung Sun, Stanley).” (Italics added.) Annual reports from 2006 name Lawrence Ho, his wife Sharen Lo and Stanley Ho as Great Respect beneficiaries, and the particular language above began in the 2012 annual report, running through the 2019 report, released April 27, 2020, two days before Melco announced its Crown share sale and four weeks before Stanley Ho died at age 98. Bergin Inquiry opening statements in January 2020 indicated it would probe Melco’s ties to Great Respect. Before public scrutiny began in earnest, Melco declared it would not pursue Crown ownership beyond its 9.99 percent holding and sold its Crown holding. Melco claimed Covid-19-induced austerity led to abandoning its Crown ambitions, without reference to Stanley Ho, and its stonewalling has kept the association largely under wraps outside Australia, where the Packer connection made it major news.

Analysis Paralysis On Melco Resorts’ October 30, 2019 third-quarter earnings call, not one of seven stock analysts representing top global investment banks covering Melco questioned the shareholder circular discrepancy or broader Stanley Ho links. On subsequent calls, none questioned the decision to initiate a deal forbidden by regulations, or Lawrence Ho’s $19 million performance bonus following that decision. “Analysts are as conflicted as anyone,” independent director and activist investor Michael Levin says. “These days they need access to company leadership, so seeing as Lawrence Ho doesn’t want to talk about his dad, they certainly aren’t going to ask about it. Privately they likely know Lawrence Ho showed stunningly poor judgment, acted in bad faith, or both, but they certainly won’t put that in a research note to investor clients.” Research reveals a rich history linking Melco, Crown, the Packers and the Hos. Melco began as Macau Electric Lighting Company in 1910 and listed on the Hong Kong stock market in 1927. By 1986, a dozen years after government-backed Companhia de Electricidade de Macau took over supplying the then-Portuguese territory’s power needs, Stanley Ho was chairman and controlling shareholder of Melco’s shell, a potential back door for publicly listing Ho’s Sociedade de Turismo e Diversoes de Macau (STDM) gaming holdings. (Hong Kong didn’t list a gaming stock until NagaCorp in 2006.) Melco’s board included key executives of STDM and Ho’s listed non-gaming company Shun Tak, notably Ho’s daughters Pansy and Daisy. Stanley Ho’s efforts to diversify his gaming portfolio long included Australia. He was an investor in Australia’s first legal casino, Wrest Point, which opened in 1973 in Tasmania, and other casino projects with Lloyd Williams, who later founded Crown and ran it until PBL—short for Publishing and Broadcasting Ltd. and controlled by legendary business tycoon and gambler Kerry Packer, James Packer’s father, who bought it in 1999. In the early 1990s, Ho unsuccessfully sought a stake in Burswood casino, now Crown Perth. When New South Wales legalized casinos in 1992, Ho bid for a license. Sources say he balked at probity checks and a secret investigation deemed Ho unsuitable. JUNE 2021 www.ggbmagazine.com

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Australian regulators have suspended a license for Crown Sydney in light of a regulatory investigation that revealed money laundering and unethical actions by the company

Name’s the Claim Far from shunning Stanley Ho, Melco PBL embraced him to obtain prime Cotai land across from Venetian Macao through Great Respect. In a July 2005 circular to shareholders, Melco wrote: “Dr. Stanley Ho and Great Respect have been able to employ Dr. Stanley Ho’s strong and enduring links with Macau and its business community for the benefit of the company and to secure the opportunity for the group to obtain a long-term lease in respect of the land.” For its assistances, Great Respect received a HK$1.175 billion ($151 million) convertible loan note equivalent to a 49.2 percent stake in the land, envisioned to represent about 10 percent of Melco PBL upon conversion. (Adjustments to the terms raised the stake above 20 percent.) No obscure footnote to far-flung Ho family holdings, Great Respect was integral to creating Melco PBL’s signature property. Stanley Ho looming large, Australian gaming regulators withheld approval of

Family Affair

Back in the Pearl River Delta, in 2001, 24-year-old Lawrence Ho engineered a takeover of Melco with the cooperation of his father, Shun Tak and his mother, Stanley Ho’s second wife Lucina Laam. Their general offer valuing the company at $16.7 million lifted their stake to 60 percent—Lawrence Ho owned 30.2 percent, Stanley Ho controlled 29.8 percent, 8.3 percent personally and 21.5 percent through Shun Tak, while Laam held less than 1 percent—and Lawrence Ho became Melco’s managing director under his father. Back then, Melco assets consisted awrence Ho has pledged to spend “whatever of Hong Kong’s Jumbo and Tai Pak floating restauit takes” to win a gaming license in Japan, rants, their parking facilities and a 12-unit Hong which shares Australia’s concern over underKong residential block. world involvement in casinos. “It is vital to the Father and son started Mocha Slots with two Japanese central government that IR operators partners in 2003, and in March 2004 sold 80 perare free of ties to organized crime,” Spectrum cent of the upmarket gaming machine parlor chain Gaming Group Senior Vice President For Into Melco, with Stanley Ho retaining 20 percent. vestigations Paul Bromberg says. Unlike AusAfter Sands Macao stunned the market that May tralia, events may work to Melco’s advantage in with its runaway success, Stanley Ho struck back. Japan. He commissioned the Grand Lisboa adjacent to his Japanese authorities’ decision to delay local flagship Casino Lisboa complex, sold SJM’s subgovernment integrated resort submissions by concession to a joint venture of MGM and Pansy nine months to April 28, 2022 should let Ho to build a casino hotel in the downtown casino Melco’s Crown issues recede further, along with hub near Lisboa, where Wynn Macau and Galaxy’s the January 2020 police raid—Melco prefers StarWorld were also under construction, and an“visit”—at its Tokyo office, investigating alleganounced a Melco-SJM joint venture to develop a tions China lottery operator 500.com bribed a casino hotel between two SJM casinos in Taipa, the legislator. Stanley Ho’s death largely moots conisland south of peninsular Macau. Gaming for cerns about his influence. Mocha and the Taipa project was under SJM’s con“First and foremost, there is very little uncession. derstanding in Japan at this point about the In November 2004, PBL, led by executive business and personal backgrounds of gaming chairman James Packer, and Melco formed a joint operators. This is something that will be deeply venture to develop gaming ventures across Asia, exlooked into once actual submissions are made cluding Australia and New Zealand, starting with by local governments and their IR development the Taipa casino and Mocha Slots. Initially, the partners,” Bay City Ventures Managing DirecMelco PBL joint venture raised its share in Taipa tor Joji Kokuryo says. from Melco’s original 50 percent to 70 percent. By “I believe Melco has done a good job with March 2005, it agreed to buy SJM’s entire stake, Macau development, but Japan is not Macau,” though gaming would still operate under SJM’s National Council on Gaming Legislation concession.

Country of Dreams

Global Gaming Business JUNE 2021

Lawrence Ho, with Ako Shiraogawa, president of the Melco Japan office

Chairman Toru Mihara says. “This is a sophisticated country and environment. I am not sure whether Lawrence Ho is fully advised and understands the risks involved here,” Mihara, a visiting business professor at Toyo University Graduate School in Tokyo, explains. “This is not the Philippines or Cyprus (where Melco is developing City of Dreams Mediterranean) or Australia. He must understand that the regulatory environment is possibly as tight as the U.S., and he must face this challenge. Lip service will not work here.” —Muhammad Cohen

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Altira was the first casino built in Macau by the combined Melco Crown company

Crown Of Gold... Or Thorns? here’s no consensus about whether Melco’s proposed acquisition of Crown Resorts would have paid off. “There is a view that the loss was a good loss (for Melco),” Newpage Consulting principal David Green says. “It severed the association with Crown before shareholder value was entirely eroded by the course of the Bergin Inquiry.” Melco sold out at A$8.15 (then $5.33) a share in April last year after Crown shares had dipped below A$6. Despite Bergin’s damning report and Crown Sydney’s license suspension, Crown shares have since traded higher, with Blackstone Group making a takeover offer at A$11.85 in March 2021. Melco’s acquisition “was a good idea, pre-Covid,” former equity analyst and gaming executive Aaron Fischer says. “Crown has great quality assets in Australia. There are not that many attractive markets globally that have decent long-term growth with a robust regulatory environment.” “In the short run, Melco was lucky not to be burdened with having to deal with Crown’s liabilities in the midst of a debilitating pandemic and huge dark clouds over Crown’s probity,” GamePlan Consultants founder and CEO Sudhir Kale says. “Despite the fact that they sold their shares at a loss, the sale provides Melco with a cleaner balance sheet with which to pursue other international opportunities when the time is right. “Over the long term, however, provided Crown can overcome its regulatory challenges, investment in Crown would have helped Melco enter into a new, stable market where Crown has dominance,” Kale, based in Australia’s Gold Coast, explains. “Other overseas companies, mostly from the U.S., have periodically shown interest in acquiring Crown. If Melco had invested in Crown, and if Crown were to be acquired, it would have provided a very attractive ROI for Melco.” There’s little question Melco would have been good for Crown. “Having working operations in China, Melco’s customer funnel was a lot healthier than Crown’s,” Ovion Partners Managing Director Peter Klugsberger says. “Melco is seen as a young, open and ambitious company, and Lawrence Ho as a representation of the next generation of Chinese gaming leader who embraces Western management style,” University of Macau professor of integrated resort and tourism management Desmond Lam says. “Melco has bought something different to Macau and is an admirable company for many young graduates, who see its corporate culture as young, dynamic and adventurous.” —Muhammad Cohen

Global Gaming Business JUNE 2021

PBL’s Melco joint venture. In March 2006, Melco PBL purchased Macau’s last subconcession from Wynn Resorts for $900 million, enabling it to operate gaming independently. (The 2002 standoff between erstwhile partners Las Vegas Sands and Galaxy Entertainment resulted in Macau granting each gaming concession a subconcession.) Within days, Melco announced Stanley Ho would resign as chairman, replaced by Lawrence Ho. In June, Melco PBL bought out his Mocha stake. In August 2006, gaming authorities in Victoria and Western Australia declared they had no objections to the Melco PBL relationship. Cohen, then Victorian Commission for Gaming Regulation executive commissioner, noting Stanley Ho’s exit and Melco PBL’s subconcession, observed, “This leaves Dr. Ho with no role in the joint venture.” The regulator did not approve Stanley Ho, only his operational absence. Over the next few years, Stanley Ho disposed his remaining stake in Melco, except for Great Respect. Melco PBL, soon Melco Crown, listed on Nasdaq in December 2006, built Altira—the Taipa property that opened as Crown Macau—then City of Dreams and Studio City bookending LVS properties on the Cotai Strip, plus Philippine integrated resort City of Dreams Manila. Lawrence Ho and Packer also pursued separate gaming ambitions, including Crown Sydney, approved in 2014, grandfathering in Melco Crown but barring “new” Stanley Ho associations.

Crown Slips From 2016, Crown began to sell down its joint venture interest to Melco. China’s arrests of 19 Crown employees in October 2016 highlighted a two-year plunge for the company and Packer that saw him resign as Crown chairman over mental health issues, another Las Vegas casino deal expensively fizzle, his engagement to Mariah Carey end and Crown’s Australian market leadership erode with VIP-oriented Crown Sydney looming as a white elephant without a China marketing presence or partner. Wynn Resorts’ $10 billion offer for Crown in April 2019 was a welcome lifeline, withdrawn when it became public. So Lawrence Ho stepped in to help old friend Packer, who owned 46 percent of Crown shares, Melco agreeing to buy 19.99 percent of the company directly from him. Ho told Australian Financial Review, “Both Crown and I have always stressed that my business dealings are independent of my father’s interests. We have already been in partnership with Crown for 12 years and have passed probity screens from regulators without an issue.” “New South Wales was a different situation” from the Melco Crown partnership, former South Australia regulator David Green explains. “Outbound (with Melco Crown operating outside Australia), the only concern with Crown was ensuring that Melco itself was a suitable associate for Crown. Inbound, the issue revolved around Dr. Ho having any association with Crown.” “I believe that the strength of the relationship and his willingness to help out James blinded Lawrence to the regulatory issue,” Sydney-based gaming consultant Peter Klugsberger says. “Melco should have known that Stanley Ho was a red flag. I suspect they thought they could overcome that red flag, since the Hos and Packers of the world think they can overcome anything and think regulators are just another nuisance in life,” Levin says. “Melco saw a good deal in Crown, and no need to let what it saw as stupid regulators in New South Wales get in the way.” Former U.S. diplomat Muhammad Cohen has been covering the casino industry in Asia since 2006, currently as a contributor to Forbes and Inside Asian Gaming. He’s the author of Hong Kong On Air, a novel set during the 1997 handover about TV news, love, betrayal, high finance and cheap lingerie.

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The Next Generation Resorts World Las Vegas promises to change the way people think about Las Vegas resorts By Roger Gros

as Vegas has been through many permutations of casino entertainment through the years. Starting with the sawdust joints of Downtown, expanding to the elegant Strip hotels with pools and star entertainment, to huge dormitories focused on housing convention delegates, until today’s oases for all things comfortable and fun. And we’re about to reach a new level of resort when Resorts World Las Vegas (RWLV) opens in late June. But let’s back up to the site of Las Vegas’ newest attraction to understand what its legacy needs to be. The Stardust was one of those legendary Las Vegas casinos people always talk about. The showgirls, the sportsbook, the mob management… It was the actual casino upon which the movie Casino was based. After the mob was cleaned out, the Stardust was owned in its later years by Boyd Gaming, at a time Boyd was being elevated to one of the most important companies in gaming. After Boyd had built and operated Atlantic City’s elegant Borgata casino resort (co-owned with MGM Resorts), Boyd executives decided to use their newfound expertise at building integrated resorts by imploding the dated Stardust and replacing it with Echelon. Soon after the demolition, however, the recession hit hard and construction was halted. A few years later Genting, the huge Asian gaming conglomerate, stepped in and bought the property, announcing a Chinese-themed resort complete with panda bears. And then came the pandemic, and Genting went back to the drawing board, emerging with a resort unlike any other on the Las Vegas Strip, encompassing items from the most successful integrated resorts around the world, and giving it a uniquely Las Vegas spin. 24

Global Gaming Business JUNE 2021

Multiple Hotels Scott Sibella was one of the longtime leaders of MGM Grand, who also had experience at several other MGM and Mirage Resorts properties prior to the merger. When he stepped down as president of MGM Grand during a corporate reorganization, Genting quickly acted and hired him to run Resorts World Las Vegas. There are few executives with such wide-ranging Strip experience with both the mass market and VIPs, so Sibella fits the bill at RWLV like a glove. Sibella says it was a great opportunity for him. “To be able to join a company and bring something to fruition from the beginning, and have input in it, it was just something I couldn’t pass up. And after I met the chairman (KT Lim), we hit it off right away, and I wanted to be part of bringing something great to Las Vegas, and bringing what I’ve learned in all these years, and taking advantage of being the first property like this open in over a decade.” There have been branded hotels within a hotel like the House of Blues and Four Seasons at Mandalay Bay, and Nobu at Caesars, but at RWLV, the entire hotel consists of different brands—Las Vegas Hilton, Conrad Las Vegas and Crockfords Las Vegas. “We have three different brands, so we can be high-end luxury, luxury and more of a premium,” says Sibella. “But what you’re going to see differently is how we operate it. We’re taking advantage of the advancement in technology, so we’re doing things that nobody’s doing up and down the Strip.”

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“We want to establish our brand. We’ve been doing this for 50 years, so it’s not a startup company. We’re pretty good at what we do all over the globe, and we’re pretty good back East. So, that will take time. But you’ll see a lot of marketing, a lot of advertising.” —Scott Sibella, President, Resorts World Las Vegas Suite at Crockfords

The Hilton (1,774 rooms) and the Conrad (the largest in the world with 1,496 rooms) will house the majority of the guests, but the very special guests have an even higher-end destination. “We’re introducing Crockfords to the U.S., and that will be our ultra-luxury brand, with 236 rooms and suites,” says Sibella. “Not only for casino guests, but for non-casino guests. We’re changing the paradigm. The person who doesn’t gamble will still be treated like a high-end VIP because they’re paying for everything and deserve that treatment.” Doni Taube is the senior vice president of international marketing for RWLV. Taube spent several years in Singapore working at the Resorts World Sentosa property. He says the Crockfords brand makes a difference to Asian customers. “At each location where we have a Crockfords hotel component— whether that is Singapore or Genting Highlands in Malaysia—each one has its own unique twist. And we have that opportunity here to do the same, as we’re recreating and creating this brand for North America as well.”

Non-Gaming Amenities RWLV is embracing the reality of revenue production on the Strip, where 70 percent of revenue comes from non-gaming attractions. Sibella says every element of the property will reflect that goal. “The way we laid the property out and programmed the property, the non-gaming revenue areas will play an integral part in our success,” Sibella told the Nevada Gaming Control Board. “Our mobile loyalty program was first designed for non-gaming, and then we turned it into gaming. We’re willing to do both aspects of clientele at our property. The shift to non-gaming continues to change, and we are taking advantage of that trend. We forecast 65 percent-70 percent of our revenue will be non-gaming.” The property will contain over 600,000 square feet of food and beverage, a nightclub, a day club, a spa and unique retail, along with 300,000 square feet of convention space. Sibella says the food and beverage outlets will reflect the property’s goal of attracting a wide range of guests. “The key was to be diversified,” he explains. “We didn’t want to have all five-star restaurants, but we have some. We didn’t want to have many low-end restaurants, but we have some casual restaurants at the same time. So, it was picking and choosing the right partners that would bring that experience to Las Vegas, and we selected them on that reason, and we’re excited with what we have.” When it comes to retail, RWLV also goes against the grain.

“We didn’t want to do a big mall or have stores that you could find somewhere else in Las Vegas,” says Sibella. “We found some great partners and used the same approach as we did in the F&B outlets: trying to find different types of stores that align with our customer base. So we have higher-end stores, there’s lower-end fun stores. We don’t want people to walk around thinking they can’t afford to go to any of our stores. There are stores that you can afford and enjoy.” With a 5,000-seat theater, RWLV is competing for the top talent in the world. Sibella says the superstars featured in a recent television commercial—Celine Dion, Katy Perry, Carrie Underwood and Luke Bryan—will play this venue. One of the secrets to the success of the theater is a partnership struck by Sibella. “We formed some great partnerships, and AEG is one of them,” he says. “They’re the best in the business when it comes to finding talent and running these big boxes with theaters. They helped us design this theater, and it is by far state-of-the-art—nothing like it in the country because of the advancement with technology, when it comes to the sound, the lighting.” But working at Resorts World Las Vegas will mean the performers must go the extra mile. “It was important that we just didn’t go out and get good talent; they had to be partners with Resorts World, when they’re performing or not performing. They’re our partners. So we’ll have pop-up stores for their merchandise. We’ll help them with their endorsements, and they’re like an ambassador to the property when they’re not here. But they are really excited that we have the entertainment side tied in to everything that we’re doing here at Resorts World.” As for the nightclub, Sibella says the partner will create a different experience for Las Vegas. “We wanted to do something differently,” he says, “so we’ve partnered with Zouk, which is the No. 1 nightclub in Asia for many years, and we’re bringing that to Las Vegas. We’re not just bringing the name. We’re bringing their expertise when it comes to programming and what they do in the nightclub.” A nightclub is only as good as its DJs, and Zouk seems to have that under control. “We did engage with two big ones, Zedd and Tiësto,” says Sibella. “But again, they’re partners. So, Zedd’s helped us with a lot of different music things throughout the property; so will Tiësto. We’ll be doing events with them, besides playing inside the nightclub. But they’re more of our spokespersons, our partners, our ambassadors.”

Technology Forward As the first new Las Vegas resort to open in 10 years, RWLV has the opportunity to incorporate new technology in ways that have never been attempted on the JUNE 2021 www.ggbmagazine.com

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Resorts World Las Vegas FACT SHEET Owner: Genting Group Architect: Steelman Partners Construction Manager: W.A. Richardson Builders Landscape Design: Lifescapes International Land: 88 acres Floors: 57 Rooms & Suites: 1,774 Las Vegas Hilton, 1,496 Conrad Las Vegas, 236 Crockfords Las Vegas Casino: 117,000 square feet Slots: 1,400 Tables: 117 Poker: 30 Food & Beverage Outlets: 22 Retail Stores: 22+

Architect Paul Steelman President and Founder, Steelman Partners “We are very happy to be the architect, lighting designer and partial interior designer for Resorts World Las Vegas. It has been a long journey that started in 2012. We believe our gaming entertainment community will benefit greatly from the unique ideas of (Genting Chairman) KT Lim and his sons Hui and Loui. We have been greatly assisted by a fantastic management team headed by Scott Sibella and a wonderful contractor, Bill Richardson. We have been fortunate to share the design stage with many architects and interior designers to create such a large project. To have a Genting resort located in the middle of the Strip seems very fitting for one of the world’s largest and most progressive gaming and entertainment companies. “Genting Highlands in Malaysia has been a developing project always creating new and exciting entertainment experiences for over 50 years. Resorts World owns a tremendous amount of vacant real estate around the facility. We all can dream that the development story of Resorts World Las Vegas will continue on just as Genting Highlands has.”

Andrew Kreft Executive Senior Principal/Director of Design, Lifescapes International “Guests expect Las Vegas resorts to offer a seemingly endless array of curated entertainment, dining, and relaxation venues that cross the spectrum of age, taste, and activity level. Our design helped craft a rather special hidden oasis in Resorts World Las Vegas, a property whose garden and musical beat will call to all who want to experience the newest excitement the city has to offer. “The Zouk Nightclub and its companion, Ayu Dayclub, will present the most state-of-the-art and immersive indoor and outdoor experience of any venue in Las Vegas. Collaboratively working with Resorts World and the Zouk Group, along with club designer ICRAVE, Lifescapes’ charge was to create an eclectic, yet refined, Southeast Asian-inspired garden and pool environment that referenced the brand’s Singapore roots, while creating a dynamic space to play, all while being entertained by the world’s most prolific DJs. “Several pool environments offer guests, from the family to the vacationer looking for relaxation to the adult party scene, an array of experiences, amid shaded social areas and carefully curated trees and plant material to create a luxury oasis in the desert.”

Global Gaming Business JUNE 2021

“If you look in today’s environment with Covid and seeing how the vaccines are being rolled out, it’s about the education of the guests, about what we’re trying to build here, and how you keep the guests within the ecosystem of all the Resorts World properties. And as travel restrictions ease in these other jurisdictions—it’s just not about arrival into the United States, but it’s also the return trip—we’re very thoughtful and sensitive about how to approach it.” —Doni Taube, Senior Vice President, International Marketing, Resorts World Las Vegas Strip. Taube says it’s this kind of innovation that will help RWLV to stand out. “It has everything to do with how we approach this property,” he says. “Today, it’s about ease of service, ease of access, and familiarity. Customers today are already ingrained on how to use their phone, whether it’s airline reservations, hotel reservations, food ordering. Everybody knows how to order tickets. So we’re really just creating those building blocks and building up that guest experience to the way we all do, as a consumer. And that’s really been our approach.” One of the innovations at RWLV is the ability to go totally cashless from day one. Taube outlines the deal the company has with Sightline, the groundbreaking payment processing company, but says the property is willing to work with any vendor who can provide quality service and products. “Everything’s a moving target,” he says. “Technology, as good as it is today, what else is there out there? Collaboration is a key to everything in your success, and how you don’t go dormant. So Sightline is a primary, but obviously, with the fast pace of technology, we look at everything.” The advanced technology also applies to the safe

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and secure atmosphere RWLV hopes to create in the wake of Covid-19. “Health and safety was always a No. 1 priority,” says Taube. “Before Covid, we spent as much money as we could to have the best air quality system money could possibly buy. And we’re glad that we did that, and we even advanced it after the pandemic hit—the way we clean the rooms; the technology on the phones, where you can do everything on your phone if you don’t want to deal with an employee. We’ll be prepared. “But we’re hoping that there are no restrictions. If we have to have the Plexiglas and the distancing, we’ll be prepared to do that. But I think going forward, just the way we clean the rooms, the story that we tell, how safe the property is, the air quality, and the advancement on technology with your phones and things like that, is something customers are going to be looking for in the future. And we thought that out because that was a core value, and it’s really important to us.”

Mass Appeal Genting and Resorts World is a recognized brand on the East Coast, particularly because of the two casinos in New York. But on the West Coast, it’s not really very well-known. Sibella says they have plans to remedy that. “It’s been somewhat difficult because of the Covid situation,” he says. “We were very sensitive about not making too much noise about Resorts World in the past six months because of everything that’s going on in today’s world. We slowly released different aspects of the property with some press releases, and we’ve done a good job at that. And I think we’ve gotten everybody’s attention now. People know it’s real; we are opening. “We want to establish our brand. We’ve been doing this for 50 years, so it’s not a startup company. We’re pretty good at what we do all over the globe, and

we’re pretty good back East. We’re looking forward to being more involved in the community, and to educating our locals and our tourists about our great company.” For Taube, the international market is important, but he says that’s going to take a while to arrive in style. “If you look in today’s environment with Covid and seeing how the vaccines are being rolled out, it’s about the education of the guests, about what we’re trying to build here, and how you keep the guests within the ecosystem of all the Resorts World properties. And as travel restrictions ease in these other jurisdictions—it’s just not about arrival into the United States, but it’s also the return trip—we’re very thoughtful and sensitive about how to approach it. But as things start opening up, not just domestically, but internationally, and you start seeing increased airlift, I think that’s when you’ll start seeing that international guest come back as well.” In a difficult employment environment, Sibella is confident that they’ll be able to reach their goal of 5,000 employees two weeks before the late June opening date. He says they are laying the groundwork for a good corporate culture, too. “With money and common sense, you can build anything today,” says Sibella. “So, it’s just a great building, but what’s going to bring it alive are the employees. They’re our No. 1 asset. Not all this money we spent. We’re very excited that we got over 115,000 people applying to work here. It’s about getting the right person and training them to make sure they understand what their role is, and they’re treated right. In return, we expect them to provide great service. So, it won’t be easy, but we’re excited who we’ve made offers to, and who we’ve hired so far.”

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Living in a Post-Covid Gaming World Expansion, efficiencies and acquisitions may signify a new industry ecosystem by Michael Soll and Michael Zhu

ravel, leisure and entertainment industries always are affected in the earliest stages of global socio-economic crises like the Covid-19 pandemic, as they are among the first areas constrained by individuals, businesses and governments. Less predictably, as the gaming industry searched for a sustainable route to recovery throughout 2020, the pace of change within it became dramatic. Changes under way before the pandemic dovetailed with adaptations made during the early stages of recovery, resulting in a frenzy of activity and several industrychanging outcomes: (1) Dominance of onSource: Yahoo! Finance as of 04/28/2021; iGaming index components: FLTR, EVO, DKNG, KIND, KAMBI, LEO, ASPIRE, BRAG, line play and acceleration in the rollout of GVC, OPAP, WMH, PTEC, 888, BETS B, GIG, GAN, and SPO; regional gaming index components: PENN, BYD, CHDN, RRR, sports betting (primarily in North AmerGDEN, BALY, MCRI, CNTY, and FLL; large-cap gaming index components: LVS, MGM, CZR, and WYNN ica); (2) revenue management and marketing refinements; (3) modifications to the use and availability of amenities; (4) operational efficiencies and reciprocal margin growth; and, (5) continued consolidation driven by real estate and private eqas shown in the chart above. uity acquisitions. The pandemic also has forced traditional casino operators to embrace The Innovation Group has tracked market impacts and recovery patterns online gaming and sports betting when possible. In jurisdictions where onsince the onset of the pandemic in early 2020. In this article, we shift our line gaming is legal, such as Atlantic City, casinos have seen online gaming focus to examine the characteristics expected of the post-Covid era in the areas revenue more than double (the city’s online GGR achieved $970.3 million of revenue management and marketing, amenities offerings, operational effiin 2020 versus $482.7 million in 2019, representing a year-over-year inciencies and margin impacts, and online gaming (iGaming). We also will concrease of 101 percent), underscoring its potential as a viable, supplemental sider unique impact and recovery trends within the Native American segment revenue stream for the industry. Additionally, as online gaming platforms of the gaming industry and in international markets, particularly in the Asia begin to accept decentralized cryptocurrency, an increase in security, Pacific region, where the long-term effects of Covid-19 could be more prevaanonymity, and the gaming industry’s ability to cater to younger, more lent. tech-savvy players is expected. A surge in mergers and acquisitions between online and land-based Online Gaming gaming operators also is likely, as traditional bricks-and-mortar operators Arguably of foremost interest is how online gaming can affect traditional seek new revenue streams after the chaos wreaked by Covid-19. Once the bricks-and-mortar casino operations. Since the onset of the pandemic in early pandemic eases, more companies are anticipated to seek economies of scale, 2020, iGaming operators collectively have achieved substantial growth and and those with stronger balance sheets will look to take advantage of more dramatically outpaced their traditional counterparts and the S&P 500 index, attractive valuations. 28

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Las Vegas Sands recently sold its Strip properties to Apollo Global Management and VICI Properties

The Fox Sports outlets were rebranded as Bally Sports in a recent deal with Sinclair Broadcasting

Sports Betting

Casino companies have been looking to grow revenues by expanding into new forms of gaming for some time, and the expansion of legalized sports betting is proving to be the once-in-a-generation shift this mature industry sought.

As states seek alternative revenue sources to offset significant declines in tax revenues due to the protracted pandemic, state leaders are becoming more receptive to legalized sports gambling across the country. Sports betting efficiently expands a casino’s player population, both online and within bricks-and-mortar locations. States that have legalized sports betting, such as New Jersey and Colorado, have seen revenue increase dramatically. In the post-Covid era, we anticipate that the popularity of sports betting will continue to climb, especially as more states take steps to supplement their revenue streams by legalizing it online. More importantly, in addition to increasing the base player population, sports betting contributes to the casino’s broader entertainment ecosystems on-site. How sports betting is programmed and consumed will have strong influences on converting less gambling-minded millennials and Gen Zers, both demographic segments of increasing value, to more active casino patrons. Through digital platforms, sports betting can well mimic the digital distribution of filmed entertainment models, making sports betting available via PC or mobile device. Since younger patrons can be most efficiently reached on digital platforms, the “consumer push” dynamics of these channels can effectively support deployment of appealing sports betting environments on-site at bricks-and-mortar casinos. For example, the new Circa Resort & Casino in Las Vegas cross-leverages its large, three-story sportsbook with Stadium Swim, the property’s innovative pool deck, to provide a unique fusion of pool party environment with sports program viewing that has great potential to drive sports betting activities.

Sports and Media Industries Alongside the promising outlook of sports betting, we also have seen casinos, media and sports entities converging to create powerful partnerships

that are poised to grow viewership and fan engagement, and to drive higher market values. A large number of deals between the sports betting and media industries has been struck over the past two years, including Bally’s and Sinclair Broadcasting, Flutter Entertainment and FOX, PointsBet and NBC, William Hill and CBS, DraftKings and Caesars Entertainment with ESPN, Penn National and Barstool Sports, BetMGM and Yahoo, and Turner Sports’ deals with FanDuel and DraftKings. Casino companies have been looking to grow revenues by expanding into new forms of gaming for some time, and the expansion of legalized sports betting is proving to be the once-in-a-generation shift this

mature industry sought. For media companies, participating in sports betting works as a solid part of revenue diversification for advertising, transactions and subscriptions. More importantly, through sports betting, media can actually get to participate in the entire consumer life cycle—by engaging consumers at the top of the funnel with content, including publishing odds, and keeping them engaged as they build their fantasy sports teams and place bets on fantasy games and live events.

Casino Operators and REITs Despite temporary closures and dramatically reduced usage of casino properties throughout the pandemic, one of the top performing property sectors in 2020 was casino real estate development trusts, which delivered a surprisingly steady performance last year. The three publicly traded casino REITs, Gaming & Leisure Properties, MGM Growth Properties, and VICI Properties, offered a resilient business model at a time when hotel and office real estate sectors languished. Unlike hotel REITs, casino REITs typically own properties under a longterm, triple-net master lease structure, leaving most of the financial and operational risks to casino operators. Due to this structure, rent collection and occupancy rates have remained essentially spotless throughout the pandemic. This represents a compelling “win-win” model. REITs help casino operators

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The Palms in Las Vegas was recently sold to California’s San Manuel Band of Mission Indians

fund better development opportunities, as witnessed in Las Vegas Sands’ recent $6.25 billion sale of its Nevada properties to Apollo Global Management and VICI Properties in order to refocus on the company’s successful Asian resorts and other developing opportunities in the U.S.—as well as optimize operations and expand into new revenue streams like online gaming and sports betting. In turn, land-based casino operators provide near- to medium-term benefits back to the REITs through enhanced profitability and the robust ability to pay rent.

Technology and Digital Adoption The pandemic has accelerated digital adoption within casino and leisure operations by prioritizing safety for in-person guest experiences, streamlining operating procedures, and expanding contactless interactions. In the hotel industry, allowing customers to have control over their stay with mobile check-in and check-out has greatly reduced the need for physical interactions. Some surveys have found that up to 90 percent of hotel guests prefer mobile check-in to eliminate unnecessary in-person encounters, coinciding with the trend of keyless check-in, which allows guests to use their mobile phones as the key to access their hotel room. Trends like contactless payment and mobile bookings also are extending to the casino floor. Jamul Casino in San Diego is working with Konami Gaming to introduce cutting-edge cashless slot markers to its slot and video poker games. Players can sign up online or on-site via an app that provides account balance and billing information. The guest can then access funds from the account at any slot or video poker machine. Account balances will adjust automatically to issue cash-out tickets for winnings. Casino operators have been focusing on high-tech/low-touch solutions using smartphones, and it is likely this technology will become commonplace in the years to come.

Indian Gaming In response to the Covid-19 threat to tribal public health, many tribal casinos in the U.S. closed their doors for the first time since opening in the late 1980s and early 1990s. This, however, did not stop tribes from looking for opportunities beyond reservation lands, a momentum we expect to continue in the post-Covid era. The Foxwoods Resort Casino has been looking for opportunities to expand

Global Gaming Business JUNE 2021

since 2008. More than a decade later, the Mashantucket Pequot Tribal Nation announced in January the formation of a partnership with LionGrove LLC, a private equity firm, to reopen the historic and iconic El San Juan Casino in Puerto Rico as the Foxwoods El San Juan Casino. The new casino, set to open by the end of this year, will be fueled by a total of $150 million in resort renovation and enhancements to bring incremental economic benefits and new jobs to the region. The partners also will reopen the renowned Tropicana entertainment venue to welcome back performers, artists and live entertainment, a move that has been highly praised by the local government as a key part of Puerto Rico’s economic recovery. The Mohegan Tribal Gaming Authority recently has been granted additional development time for Inspire Entertainment Resort, its integrated resort project in Incheon, South Korea, which aims to bring the tribe’s name and expertise to the global stage. Mohegan Gaming also has reportedly teamed with its international partner for a casino resort in the Kyushu Region of Japan, which if realized, would further strengthen the tribe’s international footprint. On the domestic front, as tribes across the country work to leverage gaming resources into economic diversification projects, great progress has been made by economic development corporations like Mille Lacs Corporate Ventures of the Mille Lacs Band of Ojibwe, Ho-Chunk, Inc. of the Winnebago Tribe of Nebraska, S&K Technologies, Inc. of the Confederated Salish and Kootenai Tribes, and Siyeh Corporation of the Blackfeet Nation. And it was recently announced that the San Manuel Band of Mission Indians purchased the Palms casino from Red Rock Resorts, which will become the first Native American-owned casino resort in Las Vegas. Tribal economic development entities typically are governed by a board of directors appointed by the tribal council. Ideally, the council serves to approve overall strategic plans, and levels of capitalization and dividend policies, leaving day-to-day operations, including personnel matters and investment decisions, to the corporate board and staff. When properly structured and strategically developed, Native American economic development entities have successfully overcome financial challenges, even for tribes in remote locations with limited resources and a locals’ market. Historically, tribal nations have not always garnered the best possible deals when leveraging their natural resources and assets against federal, state, industrial, agricultural or other commercial activities. The “Native-to-Native” movement presents one opportunity to overcome this disadvantage by dealing directly with other tribes in the buying and selling of products and resources, and to establish Native trading and business networks, which are poised to play a significant role in the post-Covid era.

The Asian Markets Like others globally, Asian casino operators have been presented with a number of challenges as a result of the pandemic and its subsequent lockdowns and travel restrictions. Pandemic-related closures at land-based casinos highlighted the need to provide a well-diversified offering that could make up for the losses. From a global perspective, convergence of online and land-based gaming is an initiative that casino operators around the world have been following closely, and the lockdowns only helped to prove such convergence is a desirable form of entertainment and social interaction.

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The Philippine Amusement and Gaming Corporation (PAGCOR, the national gaming regulatory entity) recently has authorized Okada Manila to provide online gaming services, making it the first among the four major integrated resorts comprising Entertainment City in Metro Manila to defeat the negative impacts of the pandemic and, more importantly, significantly diversify its gaming offerings. Setting aside impacts of the pandemic, there also have been significant changes to customer demographics. There is now a growing and increasingly wealthy generation of players who frequent online casinos, and casino operators that can best attract and retain this (often younger) generation will be the most successful moving forward. Even in a post-Covid era when players return to casinos, the residual uplift from a well-balanced convergence is likely to stay. On the regulatory front, with online platforms and the rise of virtual currencies, there has been an increase in potential concerns about money laundering. Over the next several years, online gaming operations in Asia are likely to continue to attract the attention of AML regulators and policymakers, which presents a challenge for compliance teams who must ensure that different regulations are covered on a global basis.

Looking Ahead To be sure, the Covid-19 pandemic turned the gaming industry upside down. Just as they were for our counterparts in the hotel, cruise ship, meetings and F&B industries, initial closures proved devastating for gaming companies and staff. But through persistence and by leveraging local markets as well as operational and

technological advantages, gaming has not only survived, but positioned itself to move beyond recovery as a leaner, more focused and more productive industry. After more than three decades of modern, regulated gaming—marked by diversification, innovation, and globalization—we see a new industry ecosystem emerging. Continued growth in online gaming and sports betting in North America, and a handful of international markets, is a given. Further consolidation between verticals and the disaggregation of operating and real estate assets could lead to greater efficiency and profitability, while maintaining certain Covid-era practices may also boost margins. Digital technologies should be value-added to operations and the customer experience across bricks-and-mortar and online destinations. Tribal organizations are bound to gain influence through expansion and investment in commercial ventures. And, as Asia finds its way through recovery, a new generation of players is poised to be the most powerful mass market in the world—growth to look forward to for years to come. Michael Soll is president and a founding member of The Innovation Group team and brings 25 years of experience with senior roles in leading hospitality companies, investment banks, and as an industry adviser. Michael Zhu is senior vice president, international operations, planning and analysis for The Innovation Group. Based in the firm’s Denver office, Zhu is in charge of a diverse set of project initiatives, including feasibility studies, market assessments, business analysis, and operational optimization.

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Changing Horses:

The Evolution of Racinos

Canterbury Park, Shakopee, Minnesota

Adding casino games to parimutuels—the racino model—helped keep many racetracks solvent. Can they keep pace in an evolving industry? By Marjorie Preston

t started in the 1990s, with a racetrack in Polk County, Iowa. Open just a few years, Prairie Meadows was on the brink of bankruptcy when track owners appealed to the state for the right to add slots. As a sweetener, they promised to run the track as a nonprofit to fund community and charitable ventures. The business model—parimutuels underwritten by gaming, aka racinos— brought back the Iowa track, and created a template for others to follow. Like Canterbury Downs in Shakopee, Minnesota. The track had operated just a few years before closing in 1992. A group of horsemen bought and reopened it with simulcast racing, then a live meet, then a card casino (slots in the state are the exclusive province of tribes). Again, the hybrid worked; 27 years later, the track renamed Canterbury Park continues to fund racing purses with gaming revenues, attracting a reported 600,000 people a year. (It also gets millions in casino revenues from the Mystic Lake Casino, run by Shakopee Mdewakanton Sioux, in a deal that maintains the tribe’s monopoly on casino-style gaming.) “We got a consolation prize when the legislature approved our card room,” says Canterbury President and CEO Randy Sampson. “We’ve been very successful—not as successful as if we had slots, but successful in keeping our purses, keeping us afloat and keeping Canterbury’s business operation viable.” The golden age of racing is past, concedes Sampson, who’s been credited with saving Minnesota racing along with his father Curt and a partner, Dale Shenian. “Very few tracks survive in this day and age without subsidy from other forms of gaming. “We weren’t really looking to own the track,” he says, “but we wanted to give racing another chance.”

Ups and Downs Colonial Downs in Virginia saw its own fortunes turn with the addition of gaming. The track held live racing from 1997 to 2014, then closed for almost six years. Racing returned in 2019 under the track’s new owners, Peninsula Pacific Entertainment (P2E), which runs a Rosie’s Gaming Emporium on-site 32

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and four off-track betting parlors. P2E is also partnering with Urban One in a bid for a casino in Richmond, but according to Chief Operating Officer Aaron Gomes, “Originally, we came to Virginia to bring back horse racing.” P2E looked for inspiration to the Bluegrass State. “A lot of people think of Kentucky as the mecca of horse racing in the country,” says Gomes, “but they don’t realize that it may not exist without historical horse racing (HHR).” The slot-like machines, authorized by the state in 2014, let players wager on previously run horse races pulled by a random number generator. Bettors wager more than $2 billion on HHR in an average year. When opponents repeatedly tried to shut down the games, Rep. Adam Koenig reminded lawmakers that HHR has helped keep Kentucky horse racing alive. “Do we have enough signature industries that we can afford to lose this one?” he asked. “Do we have so many jobs that we can kill off thousands of them?”

“We weren’t really looking to own the track, but we wanted to give racing another chance.” —Randy Sampson, President and CEO, Canterbury Park

Gomes says racinos have positive ripple effects well beyond the track. “It’s not just horse racing you’re subsidizing, it’s all the agribusiness associated with it: the breeders, the training farms, the hay farmers… The Virginia Equine Alliance just released the economic impact (of racing) for the commonwealth, and it’s well over $1 billion in economic activity.” But Kentucky’s conservative Family Foundation continues to lobby for the shutdown of HHR. Spokesman Martin Cothran has said, “Slot machines will not save the horse industry, they will replace it.” The accusation is not wholly unfounded.

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“It’s no secret that horse racing isn’t leading the P&Ls anywhere. In Virginia, HHR is the engine that’s revitalizing horse racing.” —John Marshall, Executive Vice President of Operations, Colonial Downs

Losing the Race? In December, greyhound racing came to an end in Florida, but the racinos that conducted it continue on with slots and simulcasting. This spring, a “decoupling” bill was introduced to allow those facilities to offer card games and slots without races or jai alai. Mike Rogers, president of Stronach Group, which owns Gulfstream Park, testified against the bill. “Creating an uneven playing field among slot permit-holders would be devastating to the Florida thoroughbred industry, which is one of the largest agricultural sectors in the state of Florida,” he said. “Any reduction in casino purses would significantly impact local jobs and the underlying stability of the horse racing industry.” Senator Ray Rodrigues countered that some parimutuels are “just going through the motions” so they can also offer poker and slots. For all the arguments, pro and con, it seems to be the consensus that the parimutuel industry can’t stand on its own without gaming as a prop. “To be honest,” Gomes says, “we lose a lot of money on the horse racing side in Virginia… well into the seven figures. We have to make a profit, and how we do that it is in the games.” Sampson agrees. “Gulfstream gets revenues from slots. Kentucky tracks have seen a huge improvement with addition of machines. When you look at successful racing companies, Penn National and Churchill Downs are no longer racing companies. They made a pivot over the last 10 years to move into the gaming side.” He adds that for him, horse racing is still an essential piece of the racino model, though some tracks maintain it only because they’re required to by law. “They view racing as necessary evil.” John Marshall, head of operations at Colonial Downs, also comes down on the side of the horses. “It’s no secret that horse racing isn’t leading the P&Ls anywhere. In Virginia, HHR is the engine that’s revitalizing horse racing, and to make it successful and authentic, we cannot lose sight of what was intended, with the licensee, the regulators, the horsemen’s association all working together on a common outcome.” When Colonial Downs brought back racing in 2019, “we opened offering a daily average of $500,000 in purses,” says Marshall. “We’re only able to do that because of the benefits of HHR.” The racino business model “was intended to return Virginia breeding and racing to prominence,” he says. “Secretariat was Virginia-bred. You’ve heard of Secretariat, haven’t you?”

Not Business As Usual A 2020 report by Sharon Ward, founding director of the Pennsylvania Budget and Policy Center, was critical of the state’s Race Horse Development and Gaming Fund, which she says funnels taxpayer funds to an industry whose time has come and gone. Ward alleged that in 2018, average daily attendance for a minor-league ball club, the Williamsport Crosscutters, “was greater than attendance at any of the

Global Gaming Business JUNE 2021

state’s six horse tracks.” There’s an argument to be made that horse racing, bolstered by gaming and other entertainment, may not be a lost cause, just as casinos are not irrelevant in the internet gaming age. A 2015 feature in the Minnesota Post lauded Canterbury Park’s “savvy marketing strategy” and broad-based entertainment lineup, all of which helped it lure young patrons and families as well as traditional gamblers. “They’re the next generation of horse players,” said Texas-based trainer Donna Keen in comments to the Post. “If we don’t get those people in the business and loving the sport, we’re not going to have a sport in 15 years, because the old-timers are going to be gone. Who’s going to come to the races then if we don’t show young people how great our sport is?” Frank Neborsky, general manager of Albuquerque Downs in New Mexico, argues that there’s an audience for live horse racing that ought to be served—and cultivated. “It’s a very loyal clientele. You can almost compare it to poker—they like poker, not roulette or craps; they like the people and the environment and the feeling of that space. “It’s the same with horse racing. They come in off the race meet, they bet on the Florida tracks, bet on the Midwest tracks, bet on the California tracks. When we do have the live meet, it’s exciting seeing hundreds of people in the grandstands.” Gambling on racing at a track “is very participatory,” more so than any casino game, Neborsky says. “You go to a craps or roulette table or a slot machine, you pick a number, push a button or pull a handle, and the decision is made for you. With racing, you have 10 to 12 races on a particular day at the track. You have anywhere from six to eight to maybe 15 horses in a race. It’s almost like sports betting; there’s some real history behind the horses, the jockeys and trainers. Are they hot or are they cold? How good is the horse running in these conditions? There are all kinds of handicapping parameters to choose from. Or you can just say, ‘Five is my lucky number. I’m going to bet on No. 5.’” In Neborsky’s view, “I think horse racing is going to maintain itself.” Sampson sees the expansion of sports betting and particularly mobile betting as the next big adaptation. “Now the majority of the handle wagered isn’t bet at the racetracks, it’s bet remotely. So that’s changed the industry, but not completely for the better. The next question as sports betting becomes legal in more states and becomes more successful, popular and prevalent is, will that mean people betting less on horse racing?” He suggests that horse racing and racinos will evolve as necessary to stay competitive. “There’s no question over the last 30 years that racing has had to constantly look to evolve. The old way of just doing a race meet doesn’t work anymore.” Meanwhile, Canterbury Park pushes on, with 27 stakes races during the track’s 65-day race meet, and purses totaling more than $2 million.

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Cutting the

WIRE

Why not use the Wire Act to do what it was designed to do— eliminate illegal sports betting? By David G. Schwartz

ixty years after its passage, the Wire Act is more on the betting world’s mind than ever before. For over two decades, it has slowed the acceptance of online gambling, despite having been enacted long before the internet was invented. The recent First Circuit court decision in New Hampshire Lottery Commission v. Rosen affirmed, as a Department of Justice memo had stated in 2011, that the law, which criminalizes the interstate transmission of wagers or wagering information, applies only to sports betting. Those in the business of offering online lotteries, poker and casino games breathed a bit easier, but the ruling raised the question of why sports wagering should be treated differently than any other form of betting. For the answer to that, we must understand why the Wire Act became law in the first place.

As attorney general, Robert F. Kennedy believed the Wire Act would cut the legs out from under organized crime by disrupting its illegal gambling revenue

Chasing the Mob Let’s step 60 years into the past. Bobby Lewis is on top of the charts with “Tossin’ and Turnin.’ ” Wagon Train, Bonanza and Gunsmoke dominate the small screen, while West Side Story and The Guns of Navarone sit atop the box office. John F. Kennedy has just taken up residence in the Oval Office, with his brother Robert leading the Justice Department as attorney general. RFK came into office with a clearly defined agenda: organized crime was target No. 1. Kennedy had become, in the late 1950s, an expert on the mob due to his service as chief counsel to the Senate’s Select Committee on Improper Activities in the Labor or Management Field, better known as the McClellan Committee. Kennedy’s work on that committee helped to send Teamsters Union President Dave Beck to jail and sparked his feud with Beck’s successor, Jimmy Hoffa. Initially, Kennedy made the most of the tools he had available, channeling the Federal Bureau of Investigation, the Immigration Service, the Internal Revenue Service’s Intelligence Division, narcotics agents from the Treasury Department, the Secret Service, and the Bureau of Alcohol, Tobacco, and Firearms’ firepower into a much-publicized effort to bring the “full weight” of Justice against the reputed “top 100” American mobsters. 36

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Kennedy expanded the Justice Department’s Criminal Division from 17 to 50 attorneys, with the express directive that they actively prosecute organized crime cases. When Kennedy took the helm at Justice, there had been no indictments against organized crime; within two years, he could boast that nearly 700 indictments and over 600 convictions. Yet Kennedy suspected that even the considerable tonnage of those agencies was no match for the wiles and tenacity of the mob, so he asked for new weapons in the fight against the mob. Even with thousands of agents and dozens of attorneys targeting those top 100 mobsters, Kennedy never came close to breaking the mob. Part of the problem was that organized crime was, well, organized. Mob bosses were not down on the streets, committing crimes, so they couldn’t be charged, much less convicted, for them. Having several layers of silence between them and violent criminal acts meant that top mafiosi only rarely went to jail for murder, drug smuggling, or extortion. That didn’t mean they were untouchable—after all, Al Capone went to prison for tax evasion. But Kennedy didn’t want to break the mob one perjury or contempt conviction at a time. Instead, he wanted to smash the mob in the most dramatic fashion possible, which meant creating

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statutes that would help to indict suspected organized crime bosses as the leaders of an interstate conspiracy to profit from violating the law.

The New Laws Kennedy’s push against the mob came after more than a decade of sporadic federal interest in organized crime, initiated by Estes Kefauver’s Special Committee to Investigate Organized Crime in Interstate Commerce in 1950. Ultimately, the Kefauver committee benefited the growing gaming business in Las Vegas by focusing public attention on its illegal rivals across the country, though it can be argued that he and others paved the way for Robert Kennedy’s tilt against the mob by alerting the public to organized crime’s danger. Kennedy believed that gambling was the lifeblood and Achilles heel of organized crime. By attacking the mob’s money, Kennedy thought, he could effectively disrupt and destroy it. And, since Kefauver, federal investigators believed the mob made most of its money in horse race betting, via an information network known as the race wire that connected racetracks and bookmakers. Without the wire, bookies would be unable to offer odds on races. Organized crime profited from a monopoly on the race wire, which is why Kennedy’s proposed masterstroke involved criminalizing the transmission of betting information, rather than merely placing or accepting a wager. In fact, Congress had been mulling a ban on the interstate transmis-

sion of racing information since 1907, though for a variety of reasons anti-race wire bills had continually failed, mostly because opponents argued that police already had anti-gambling laws on the books that they weren’t using, and because telecommunications companies, fearful of being forced to police their wires, objected. As the public became more aware of the threat that organized crime posed, however, law enforcement became more strenuous in its request for new weapons. Starting in 1957 and continuing annually thereafter, William Rogers, attorney general under Dwight Eisenhower, submitted anti-crime bills that would have banned interstate betting over telegraph and telephone lines, shipping betting slips across state borders, and gambling devices, like pinball machines and roulette wheels, not already covered under the Johnson Slot Machine Act. None of them got far in Congress. Kennedy’s energetic approach—he had his legislative aides draw up eight new (and old) proposed bills—bore more fruit, however. To Rogers’ legislative roster, Kennedy added a measure to prohibit interstate or international travel that advanced illegal business activities, an enlargement of the class of ex-convicts prohibited to send or receive firearms across state lines, and an act that made illegal the intimidation of witnesses in preliminary government investigations. Kennedy had behind him more than a decade of revelations of organized crime’s scope and influence—from testimony before the Kefauver Committee to the Apalachin incident, when several reputed mobsters were arrested at a meeting in New York—that suggested he could succeed where so many had

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While it may be appropriate for prosecutors to indict those in the business of illegal gambling under the Wire Act, there is scant justification to use it to prevent states or private operators licensed and regulated by states from offering gambling via the internet across state lines. failed for so long. Further, Kennedy had the deep and unequivocal support of the president, and a public reputation as an anti-crime crusader. The attorney general himself used his office as a bully pulpit, arguing that the nation’s biggest problems, which he felt were organized crime, juvenile delinquency, antitrust abuses, and civil rights violations, were due to the American public desire for a quick buck and material comfort. Kennedy argued that his proposed bills would take down “the bankrollers and kingpins of the rackets” that had thus far been unscathed. He planned to arrest street operatives for actually sending gambling information across state lines, and then use “aiding and abetting” statutes to get the big wheels. He assured Congress that only the federal government was powerful enough to move against the mob, and that it needed these new laws to do so effectively. The attorney general believed that the transmission by wire of horse racing bets was so essential that “denial of their use to the gambling fraternity would be a mortal blow to their operations.” Though, as written, Kennedy’s interstate betting ban made the mere act of placing the bet a crime, he stressed that he did not want to prosecute casual or social bettors, but rather would only pursue organized gamblers—the mob. He had no problem whatsoever with “a social wager between friends by telephone,” but believed that this law was essential for bringing down the mob. Further, the bill that became the Wire Act was consciously limited in scope: RFK made sure that print, radio and television were completely excluded, with the understanding that the Federal Communications Commission was already able to police the airwaves. And, as Congress deliberated, it focused tightly on the law’s application against those betting on sporting “contests,” even eliciting testimony that professional wrestling would not be subject to the ban, as its athletes were “more actors than wrestlers.” This was a specific law, with a specifically limited scope. Some questioned whether the new law was truly necessary—after all, RFK’s organized crime task force had already succeeded in indicting 13 members of a national bookmaking network for tax evasion and theft of service (from telephone provider AT&T). But Congress apparently agreed with Kennedy that organized crime couldn’t really be defeated one tax case at a time, and passed the bill. Western Union succeeded in inserting a provision that indemnified themselves from prosecution unless they violated a written notice previously provided by law enforcement. The attorney general didn’t get everything he wanted; the gaming device measure, the anti-obstruction bill, and the witness intimidation bill didn’t pass. But on September 13, 1961, President Kennedy signed the Wire Act and its companion bills, remarking that he hoped the new laws would “aid the United States government and the people of this country in the fight against organized crime.” The president was confirming what his brother had argued for months: that the laws were not intended to suppress gambling, but rather to fight the mob. The Kennedy brothers’ intentions, however, ran aground on the reality 38

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that Bobby’s central thesis—that small operators would willingly testify against the bosses—was flawed. The small-fry bookmakers ensnared by the Wire Act were more worried about their bosses than prison. The Justice Department was able to disrupt gambling operations in Newport, Kentucky, and New Orleans, Louisiana, but did not net any national mob bosses. It wasn’t until prosecutors began to use 1970’s RICO (Racketeer-Influenced Corrupt Organizations) statute that they were able to truly tackle the mob’s leadership. But even when the kingpins are jailed, as anyone who has watched HBO’s The Wire knows, new criminals just step in to replace them. New laws could hurt criminals, but they never stopped organized crime.

The Wire Act Today When, in the late 1990s, prosecutors used the Wire Act to target offshore online bookmakers, they were following, if not the original intent of the law, its practice over the previous 30 years: targeting those who were offering illegal gambling. The Justice Department’s 2011 memo, which restricted its application only to sports betting, and its 2018 opinion, which expanded the law’s scope once more to cover all forms of gambling, including lotteries, both missed the point: that the Wire Act was intended primarily to disrupt organized crime, with illegal gambling only the means to that end. The Wire Act’s first clause criminalizes those in the business of “betting or wagering” who use a wire communication facility to place bets, or send information that assists in placing bets. That’s a broad brush: presumably, simply announcing that a game will take place could be interpreted as providing information that assists in placing a bet on it. So in the second clause, Congress specified that the law couldn’t be construed to prevent the transmission of “news reporting” on contests, or sending information assisting in placing bets on an event from a state in which such betting was legal to another state or foreign country in which such betting was legal. When viewed in the context of Attorney General Kennedy’s repeated statements that he didn’t wish to prosecute “social” bettors, but only attack the mob via its stranglehold on illegal gambling, it is not so outrageous to suggest that, while it may be appropriate for prosecutors to indict those in the business of illegal gambling under the Wire Act, there is scant justification to use it to prevent states or private operators licensed and regulated by states from offering gambling via the internet across state lines. Just as police don’t use section 1953 of 18 U.S. Code, which bans the “interstate transportation of wagering paraphernalia” to target those who distribute March Madness brackets or buy lottery tickets on the California side of Primm and cross the Nevada border, they shouldn’t use the Wire Act to prevent people from legally betting online. David G. Schwartz, a professor, gaming historian, and administrator at the University of Nevada, Las Vegas, is the author of several books about gambling, including Cutting the Wire: Gaming Prohibition and the Internet, and At the Sands: The Casino That Shaped Classic Las Vegas, Brought the Rat Pack Together, and Went Out with a Bang.

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EMERGING LEADERS Strength in Self Meghan Sleik Director of Partnership Marketing & Communications, Aristocrat Gaming s the director of partnership marketing & communications at Aristocrat, Meghan Sleik develops and executes marketing partnerships and sponsorship opportunities with both casino customers and non-casino brands. The position at Aristocrat is a natural fit for Sleik, given her extensive background in gaming and hospitality-related public relations. Sleik studied public relations at Quinnipiac University prior to accepting a public relations role with MGM. Her responsibilities at MGM included managing major television and motion picture film shoots as well as media for national events. Sleik has also served in public relations roles for the Wynn Las Vegas and R&R Partners, a Las Vegas-based advertising, marketing, public relations and public affairs firm. Key accomplishments thus far in her career include securing a first-of-its-kind landbased supplier marketing partnership between Aristocrat Gaming and the Las Vegas Raiders and leading the public relations strategy for the first LGBTQ commercial for the Las Vegas Convention and Visitors Authority. Seeing the commercial air, Sleik says she “felt so fulfilled in giving recognition to underrepresented groups in tourism, and showcasing some of the most amazing moments that have and will continue to happen in Las Vegas.” While Sleik’s background is now rich with industry experience and accomplishments, this was not always the case. However, Sleik did not let inexperience keep her from speaking up or providing insight, and she credits this candid style in helping her develop a leadership brand that is uniquely “her.” To Sleik, “experience” is more than what one can list on a resume. “Some of the most insightful experience I have that makes me who I am as a leader really has nothing to do with work,” she says, and she advises up-and-coming leaders to tap into their own untraditional experiences to develop their authentic leadership style. Sleik found that the

Global Gaming Business JUNE 2021

Career Validation Mike Nguyen Director of Engineering, JCM Global n his spare time, Mike Nguyen fiddles with cars, appliances and electronics. When he’s working at JCM, he also fiddles, but with a little more tech savvy. “I’ve always liked to tinker with electronic devices to understand how things work internally,” says Nguyen, a Vietnam native who emigrated with his family to the U.S. at 10. Gravitating towards computer science as a major at Cal State Northridge seemed a logical choice. So did obtaining employment with JCM Global in 2008—known as JCM America then— as a software developer. “Computer science allows me to continuously learn new ways to improve existing solutions and create new technologies,” Nguyen says. What sold Nguyen on JCM was the chance to work on a bill validator, of all devices. “I was curious how the bill validator was able to use LED sensors to identify and validate currencies worldwide. This job allows me to learn a lot more about electronic devices and algorithms,” he says. His initial work focused on gaming and vending, before a promotion to lead a small team working on high-end banking products for ATMs using neural networks, then considered cutting edge. “JCM promoted me to software engineering manager, where I helped transition a system product and multiple thermal printer products from an acquired company to our Las Vegas office,” Nguyen says. He also put together another team to design and develop a system to integrate with the firm’s

company culture at Aristocrat aligns well with her views on experience, and credits that working environment with transforming her into the leader and marketer she is today. She encourages other young professionals to search for the right place for them, and once found, go all in and be unapologetically themselves. Looking toward the future, Sleik is excited to expand the Aristocrat marketing team and help the company bring more world-class games to their customers. She also sees unique opportunities in the gaming industry through the fusion of gaming and technology. “The innovation and evolution of hardware, game content and more is a complete game-changer as it relates to what it means to work in technology. I would encourage emerging leaders to expand their thinking as it relates to how they define what it means to work in tech,” says Sleik. Although ambitiously engaged in her career, Sleik finds time to help other young professionals develop the leadership skills that led to her success. She serves as an alumni resource to students at Quinnipiac University, plays an active role in the Aristocrat Future Leaders (AFL) rotational program for recent college graduates, and recently joined Global Gaming Women. —Chloe Paul is manager, data analytics for The Innovation Group.

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peripheral devices. During Nguyen’s 13 years with JCM, the company has opened the door to learning and creating new technologies. “I would have to say I have not had a dull moment here,” he says. As current director of engineering for JCM, Nguyen manages teams working on a wide range of varying technologies: new hardware designs, developing embedded systems, firmware development for the bill validator and thermal printer product lines, system development using web services to link casino systems, and with peripheral devices. Covid-19 put Nguyen’s team of teams to the test. “It was challenging to work remotely since we did not have remote access to all test environments and equipment.” But a month after lockdown, the company overcame the obstacle. “I think the pandemic forced us to be more efficient and learn how to adapt to a new normal,” Nguyen says. It all comes down to how you deal with confronting an obstacle, Nguyen says. “As an engineer, I would say that there is a solution to overcome every obstacle out there. Sometimes, it might be difficult to quickly find a solution, but there is always a workaround until a solution is found.” Often that comes down to getting more people involved to brainstorm. “To me, an obstacle is just a puzzle waiting to be solved.” Like any successful person, Nguyen has relied on mentors, one in particular. “Dave Kubajak has always been my go-to mentor,” he says. “As senior vice president of sales, marketing and operations, Kubajak wasn’t my direct supervisor. But he has always been there to offer valuable advice and help guide me throughout my career.” To young engineers who might want to consider Nguyen’s career choice, he says stay determined and focused on goals. “If you find a challenge that you can’t overcome by yourself, then ask for help. If you are early in your career, then it would be wise to find a good company with good people who are willing to be your mentor. Stay for the long term.” —Bill Sokolic

Guiding Light Charlotte Cain Human Resources Manager, Continent 8 Technologies he Isle of Man lies in the Irish Sea between Great Britain and Ireland. Charlotte Cain calls the island her home, and has for most of her life. “It’s a beautiful place to live and especially to grow up in.” Except for her years at the University of Bath, Cain has resided on the island. At Bath, she majored in French and international management. “The course gave me the ability to learn the language in a business context,” she says. “Towards my final year of studies, I majored in human resources as a subject which solidified my interest and started my career pathway.” As part of her degree program, Cain took an internship in a human resources department for a French global mining company. “That really opened my eyes to how pivotal the function is to a successful organization,” she says. For Cain, human resources is more than hiring candidate A for position B. “I’ve always been interested in how you could leverage off people’s skills in a business, particularly as people are notoriously unpredictable,” she says. Cain could have sought a position anywhere. But she chose to remain on the Isle of Man with Continent 8 Technologies, where she serves as human resources manager. The Isle of Man has a strong presence in a number of industries, namely technology, online gaming and financial services. “For me, a solid career will always be supported by my family, which just so happens to be based there. The Isle of Man, despite being

small in size, has always had some fantastic opportunities in global organizations,” Cain says. As Cain describes it, Continent 8 is an independent, international business on a “mission to discover and deliver innovative technologies to enhance connectivity, data center, cloud and cybersecurity solutions.” Established over 20 years ago by entrepreneurs with what Cain says is a passion for boutique customer service, Continent 8 operates in more than 60 locations around the globe. As HR manager, Cain is involved in all aspects of people management, helping staff reach their potential. “I see human resources as an extension of all departments within the business, and my aim is to be there to advise and assist at all stages. My role is all-encompassing,” she says. Continent 8 did not undergo a major seismic shift when it came to people management after Covid-19 hit. “The structure of the company has always been very geographically dispersed, and as a highly technical organization, we were well set up to adapt and change to the ongoing situation,” says Cain, who spends down time walking, baking, cooking or involved with do-it-yourself projects at home. For younger people entering the human resources field, Cain says be confident in what you know. “But be humble to learn and open to share. Technology is always developing, so you need to be eager to see what’s coming up next.” —Bill Sokolic

JUNE 2021 www.ggbmagazine.com

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The

Casino management and business intelligence systems are increasingly relying on sophisticated data collection to provide a 360-degree player profile

e t e l p Com View

By Dave Bontempo

rill-down data flaunts new sophistication. Bridging the business-human intelligence realm with improved capability, it shows expanded influence in the gaming world. A new phase follows the color-coded visual scoreboards and touch-screen application that replaced arduous, manual number-crunching. Increased functionality provides game-versus-game, shift-versus-shift and machine-versusmachine comparison. Operators glean two major benefits. One is the strength of slick machinery, whether it impacts spreadsheets, data mining, querying software or digital dashboards. Two is the setup of splitsecond human-intelligence decision-making. That can span deployment of more people to a high-action game, predicting staffing needs on a major weekend or when to replace ineffective games. Several respected companies have stepped up to become players in this space.

Revving it Up The new RevMax Plus performance optimization program from Aristocrat Gaming helps operators of all sizes maximize game investment through custom and confidential data-driven analytics. Created by Aristocrat’s data analytics team, RevMax Plus proactively monitors the performance of Aristocrat games across the casino floor. The information allows for the development of customized product recommendations individualized to every operator. This results in casino floor adjustments that create the right product mix, aimed at optimizing performance and title diversification. “RevMax Plus is a testament of Aristocrat’s commitment to our customers and symbolizes where our services meet our exceptional technological capabilities,” says Jon Hanlin, senior vice president of commercial strategy and business analytics for Aristocrat. “As a former operator, I understand the importance of data to make critical decisions that directly affect revenue. RevMax Plus delivers solid, data-based recommendations that are unique to each operator’s individual floor.” Operator response has been enthusiastic. “Only Aristocrat has a program like RevMax that takes a data-driven approach to proactively identify opportunities for product improvement,” says Patrick Crawley, gaming revenue manager for Thunder Valley Casino Resort. “When you’re managing thousands of games, it’s great to have a partner that cares enough to share the load.” 42

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Assessments will help identify improvement areas if needed. In the February 2021 Reel Hot Index, Aristocrat has the top 18 best-performing premium titles. If the lineup juggles substantially—perhaps certain games falling off the Top 25 list—they could become candidates for further, data-driven review. RevMax Plus is the latest version of Aristocrat’s RevMax solution, which has been helping customers boost performance since 2008. The new RevMax Plus includes multiple enhancements, such as: • dedicated data team providing holistic analysis and game optimization recommendations • comprehensive and confidential analysis • monthly performance reports and proactive enhancement solutions • enhanced and vetted data analytics

The Synkros Connection The dashboards are a specialty of the Synkros casino management system from Konami Gaming, Inc., which empowers operators to capture and compile data through all connected areas of the property—gaming and non-gaming—to generate a 360-degree patron view. “In recent years, one of the biggest changes has been the increasing depth and breadth of information available to the operator,” says Jay Bertsch, senior vice president and chief commercial officer for Konami. “As systems gather more data across various sources throughout the venue, the ability to review and act on this data becomes critical to maintaining a competitive edge. Operators are looking for tools and technology that allow them to better access and understand their data with strong accuracy and agile integrations. “Reporting and analytics have always been important to Konami’s systems offering,” he adds. “The wealth of data our Synkros casino management system generates—combined with the data it captures through robust integrations—gives properties powerful of information on their business. And we’ve expanded our offering to include tools like Synkros Dashboards, so operators are able to access that with incredible convenience and interactivity. Casino properties across the globe invest heavily in business intelligence solutions, but they are often difficult to use on a daily basis to drive actionable results.” Synkros Dashboards gives operators a single location to observe, test and process dozens of dashboard indicators spanning all major areas of

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Synkros Dashboards gives operators a single location to observe, test and process dozens of dashboard indicators spanning all major areas of their business

their business, including slots, table games, player loyalty and marketing. This creates immediate data-driven insights to power key decision-making that can drive revenues and optimize business spend across the operation. Among the strongest challenges faced with casino analytics currently are slow integrations, antiquated visualization displays, and inconvenient access. Essentially, external data warehouses are pushing delayed data to outdated displays within a separate application. Synkros Dashboards instead leverages direct source data for optimal speed and accuracy, and deploys it to the industry’s latest and most intuitive visualization tool, which lives within the Synkros ecosystem. Each customizable dashboard is fully interactive, with unique insights across varied levels of detail. To illustrate, operators can instantly view performance throughout the entire floor, or pinpoint a specific bank, machine, and even the specific game theme within a multi-game machine. And within that, they can filter for specific manufacturer, game denominations, and other key criteria points. With Synkros this can even be expanded on an enterprise level with multi-site data sources pointing to a single interactive dashboard.

Seamless Leap to Gaming Analytics Intell specializes in the development and delivery of secure, reliable end-to-end analytics and business intelligence solutions. For over 17 years, it’s been creating customized solutions for organizations in highly regulated industries such as financial and banking institutions, health care, retail, and integrated resort properties. That’s how the company knew it could hit the ground running for the gaming industry when approached, according to CEO David Bissainthe. One of its highlighted products is Casino Intell. Some of its core functions include tracking floor activity at a glance, identifying real-time revenue opportunities, predictive prompts to increase

gaming revenue, and the ability to view financials with a built-in, enterprise reporting platform. “This product was developed out of the need for a smarter business intelligence and analytics solution for casinos,” says David Bissainthe. “Our vice president of business solutions, Christian Jabon, is a former business intelligence and analytics executive for a major casino enterprise operator who realized that there was a need for better tools to drive smarter insights for actionable recommendations and better floor optimization.

“This product was developed out of the need for a smarter business intelligence and analytics solution for casinos.” —David Bissainthe, CEO, Casino Intell “When he couldn’t find a vendor to provide what he was looking for, he reached out to us (Analytics Intell), as he had worked with us while he was in the banking industry. We have since built a global team of experts in gaming intelligence, software development and technology, and psychology and neuroscience, to deliver a secure, intuitive and smarter intelligence solution for the casino industry.” Casino Intell can be either cloud-based or JUNE 2021 www.ggbmagazine.com

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on-premise, depending on the client’s preference. Casino Intell is the umbrella product. Individual modules include: • Slot Intell • Player Intell • Table Intell • Executive Intell • Casino Marketing Intell • Staffing Intell • Floor Mapping Intell The company is focusing on Slot Intell initially. Flash Intell is a feature that works across all the modules. Bissainthe says the Casino Intell software solution delivers smarter intelligence for casino operators. This is his overview of some Casino Intell highlights: Smarter UX

“Slot Intell enables users to easily explore the type and level of intelligence needed to make smart, informed, actionable decisions. From a performance overview of the entire casino floor, to the historical data of a particular section or bank, to the detailed transactional data of a particular gaming machine, Slot Intell allows users of all levels to quickly see the full picture of what is happening on their casino floor in a clear and intuitive way.” Smarter Insights

“The Slot Intell suggestion engine incorporates advanced technology and neuroscience to provide smarter, adaptive suggestions—integrating historical transaction and performance data, as well as situational factors such as the unique property profile, specific environment and criteria, and internal/external events, to present smarter, actionable recommendations.” Flash Intell

“Operators no longer need to search for the specific intelligence they need to do their jobs. The company’s customizable Flash Intell technology elevates the user experience by delivering the exact insights they need via the platforms they use every day. Flash Intell automatically scans every webpage or email and underlines relevant keywords. Users simply hover over a highlighted word and Flash Intell surfaces the predefined KPIs associated with that word in real time on a customizable pop-up flash card, delivering the intelligence they want at their fingertips.”

Data On the Rise Data plays an increasingly significant role both in gaming and at Scientific Games Corporation, according to Ted Keenan, vice president of product management systems. “With increased approvals for cloud-based solutions from gaming regulators and reduced infrastructure cost, more and more operators are taking on their journey to be a data-driven organization with automated real-time actions to provide the best player experience and achieve operational excellence,” Keenan says. “There are more and more operators looking for solutions that can take action based on AI/ML algorithms in real time and automate it. SG’s Business Intelligence and Praxis Analytics solutions are specifically targeted to address these requirements, and we continue to invest in both products to partner with our customers in their journey to be complete data-driven organizations.” Keenan adds the gaming industry is far behind compared to other industries in adopting AI/ML-based solutions. “With increased visibility and push for operators to be data-driven organizations, we expect more and more operators adopting these analytical solutions,” he says. “We expect demand for analytical solutions to grow continuously in upcoming years.” 44

Global Gaming Business JUNE 2021

One of the company’s highlight products is Business Intelligence (BI), an analytical solution providing descriptive analytics of casino resorts by looking at historical data. Business Intelligence collects data through an ETL (Extract, Transform, Load) process from different systems like CMS, SMS, TMS, Hotel, POS, etc., and converts it into analytical format for operators to analyze. The data collected through these ETLs are then aggregated and made available to the end user by various front-end modules in BI. The ability of Business Intelligence to combine data from multiple systems enables the operator to get a 360-degree view of their player and resort in a single place. BI is specifically designed for the gaming industry to give operators better understanding of: • Resort performance • Gaming floor performance • Player and game interaction • Player behavior and trending BI comes with multiple modules to enable the operator to review and make informed business decisions based on descriptive analytics generated in the system. • Analytical Dashboards & Reports: A set of canned interactive dashboards and reports to provide insights on various departments of a casino with the ability to customize, schedule and create new dashboards. BI integrates with Tableau, a leading dashboarding and analytical tool, to provide interactive dashboards. • Floor Analytics: A tool that allows users to create different KPIs to measure the performance of the gaming floor through heat maps. It allows viewing the floor map with countering, which helps the user to identify wellperforming areas on the gaming floor with drill-down capabilities. • Campaign Manager: Allows the user to manage, monitor and summarize multiple marketing campaigns. This marketing-driven application lets casinos compare budget versus actual ROI during and after campaigns to determine the effectiveness of each promotion. Campaign Manager automates marketing campaigns, allowing the marketing team to spend more time analyzing player performance instead of manually setting up campaigns. Praxis Analytics is SG’s new analytical solution designed to take advantage of AI/ML technologies and provide a prescriptive analytics recommendation engine to casino operators. Praxis Analytics is an end-to-end solution that generates personalized recommendations at player and game level. Praxis integrates back to SG’s other systems to deliver these recommendations to players without adding any additional overhead to the operator’s day-to-day activity. Some of the key use cases targeted by Praxis Analytics are: • Wallet Power Score: Identify the true Wallet Power Score of a player, indicating the player’s potential to spend more at the property by shifting their entertainment spend. Along with Wallet Power Score, the system generates personalized “Play X Get Y” recommendations for players to extend their session on a gaming device. • Game Recommendations: Personalized game recommendations delivered to player directly on the EGM or mobile device. • Player Breakpoint: Identify when a player might stop playing in real time and automatically trigger offers to extend their stay on device. With end-to-end integration and continuous learning models, Praxis Analytics augments employee work functions and enables best-in-class player experience to patrons. Praxis Analytics can be deployed completely in cloud or on-premises, depending on the operator’s needs. Praxis takes care of data security and also makes sure there is no personally identifiable information (PIIs) stored in the SG cloud. Gaming winners are those who see the patterns first, create a conclusion and make an administrative move. Business intelligence software brings the tools to the contest.

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FRANKLY SPEAKING by Frank Legato

Typos, Supermodels and Robots

etMGM needs me. Well, maybe not me, but certainly some kind of editor. You see, editors look for typographical errors. We catch most of them before our publications go to press or go online. If BetMGM had an editor, the online sportsbook could have saved 10 grand. BetMGM lost $10,500 on a New Jersey betting line for the January NFL playoff game between the Cleveland Browns and Kansas City Chiefs. The site put up a proposition bet on the game to predict the performance of the game’s two quarterbacks, Cleveland’s Baker Mayfield and Kansas City’s Patrick Mahomes. According to the New Jersey Division of Gaming Enforcement, BetMGM had intended to offer a prop bet on whether the two quarterbacks would pass for 300 or more yards in the game. The problem was that whoever entered the bet into the system left out the “3” from 300. The officially posted wager was on whether the quarterbacks would pass for 00 or more yards. In other words, whether they would pass at all. Alert bettors pounced, winning $10,500 before the error was caught and corrected. Wow. A $10,000 typo. Had an editor been utilized, the data entry clerk, presumably now unemployed, could have kept his or her job, and BetMGM’s profits could have been spared. If BetMGM wants me to edit their prop bets, I’ll gladly do it for, say, half of each potential loss prevented. Why, it would have saved them a cool $5,000 if I’d been there in January. Instead of $1 billion in revenue this fiscal year, it could have been $1,000,005,000. I’ll be waiting to hear from you, BetMGM. Speaking of sportsbooks, it appears industry giant DraftKings has beefed up its team of advisers to the company’s board of directors, which already counted Hall of Fame former athletes Cal Ripken, Jr. and Michael Jordan. The baseball and basketball legends have been joined in their advisory role to the DraftKings board by an NFL legend. Well, to be more specific, an NFL legend’s wife. Former supermodel Gisele Bündchen, the wife of future NFL Hall of Fame quarterback Tom Brady, now advises the DraftKings board. Bündchen is an admirable person, to be sure, having established herself as an environmental activist, philanthropist and champion of social causes. But sports betting? I’m guessing she’ll be nudging Tom from time to time. Do you think she’ll call the board if Tom wakes up on game day with an elbow cramp? I should hope so. I’m kidding. Gisele’s got all kinds of integrity, and why on earth would she need to know about sports to advise a sportsbook operation? I’m sure rival sportsbooks will be calling on former supermodels left

and right now. Personally, I never place a sports bet before I’ve consulted with Christie Brinkley. Moving on, in perhaps the best indication so far that we’re finally emerging from the Covid-19 pandemic, Las Vegas reopened its strip clubs last month. Topless dancers can now bump and grind with patrons in person once again, as long as they’ve had at least one Covid-19 shot. If they’re unvaccinated, they have to stay at least 3 feet from customers. (I’m guessing that would make it awful hard for customers to shove cash into their garters.) The dancers also have to wear masks. (I would expect creative tiger-face or pirate masks. In fact, I would demand it.) And I’m guessing there are no lap dances allowed yet. I’ve quite honestly never been to a topless bar, but we can all cheer the fact that the Las Vegas tradition of topless dancing has been resurrected in the form of women on poles, masked and socially distanced, and who have had their shots. Viva Las Vegas! Finally, speaking of the Covid-19 pandemic, among the changes we could begin to see soon in Las Vegas are robot food and beverage servers. Yes, a robot could soon be bringing you your roast beef sandwich or your Maker’s on the rocks. Korea’s Paradise Hotel Busan is currently testing an “AI Serving Robot” as part of its plan to reduce face-to-face contact amid the pandemic. According to news reports, the robot is being deployed for three months at the Nyx Grill and Wine restaurant, where it will deliver food and collect used dishes from tables without the need of employing potentially diseased humans. I hate this. I like human interaction. I like motherly servers who call me “Hon” when they bring my omelet. The Korean robot doesn’t even look the part. It looks like a computer with dishes. At least they could have made it look like the robot maid on The Jetsons. Or better yet, like Christie Brinkley. JUNE 2021 www.ggbmagazine.com

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MAKING MY POINT

Words of Love Speak softly and carry a pretty big vocabulary

he only problem with workplace grammar Nazis is that not nearly enough of them get strung up by their dangling modifiers and are then beaten to death with a sock full of Oxford commas. Oh, you know the type, the type that revel in revealing—loudly and publicly—the teeniest, tiniest transgression from the King’s English. The who-whomers. The pronoun-antecedent vigilantes. The double-space-after-aperiod police. And of course those prickly wicklies that cling to arcane rules from highschool composition class, like never starting a sentence with a conjunction or ending it with a preposition, or any other ridiculous restraint they can think of. See, see what we did there? Yes, we can all agree that Dante has a separate circle in hell for these red-pen brownshirts. But while we are business people in the casino industry and not copy editors at a publishing house, that doesn’t mean we can’t shore up our writing and speaking skills. So, with that as our charge and with tongue planted firmly in cheek, here are the top five blunders to avoid. And if you have a favorite foible to add, do so in the comments section.

Me, Myself and I This trips up more people—smart, educated, accomplished people—than ankle-high piano wire at a square dance. Which, when you think about it, is kind of a bad idea, but, when you think about it a bit longer, would actually be fun to watch. Nevertheless… Refer to Strunk & White for the official do’s and don’ts, but here’s the quick and dirty dissertation: “I” starts the sentence, but it ends with “me.” I went to the cage to get the marker; or they brought the marker to me. As for “myself,” it’s usually immediately after “I” and a verb, whether passive or active. I gave myself a haircut. I am, myself, an egomaniac. That last one was illustrative, not illuminative, by the way.

Global Gaming Business JUNE 2021

By Roger Snow

Now, these rules are pretty easy to follow when there are no other pronouns in the sentence, just as driving is pretty easy when there are no other cars on the road. But things get hairy quickly when there’s traffic, when there are other pronouns to steer around. The trick is to forget about those hims, hers and theys, and operate per usual. She and I went to the cage to get the marker; or they brought the marker to him and me. Note the other pronoun always goes first. As for myself, it doesn’t play well with others. You’d be hard pressed to say a sentence that has a third-person pronoun and myself close to each other. She gave myself a bad review and he wanted to see myself get help are closer to gibberish than English.

Let’s speak this “ now and forever hold

our peace, not piece. The former is an advisable rule of thumb and the latter is a misdemeanor if done in public.

”

Latin Lovers The language may be dead, but its abbreviations live on. Here they are: “i.e.” (id est) means “in other words” or “that is to say,” while “e.g.” (exempli gratia) means “for example.” Used in a sentence, it could look like this: When dealing with a grammar Nazi (i.e., an SOB POS) in the workplace, feel free to get Medieval on his ass (e.g., draw and quarter, burn at the stake, pluck out fingernails).

What The H? Let’s speak this now and forever hold our peace, not piece. The former is an advisable

rule of thumb and the latter is a misdemeanor if done in public. “Height” ends with a “t” sound. They haven’t pronounced it “th” for 200 years. So unless you and Doc Brown find a DeLorean and take it back to 1721, make sure the “h” stops here.

No Words Take a look at this list… and then immediately forget it. Because while each of these words may look like a word, they are actually not words. Word? • Irregardless • Alright (but making it two words is “all right”) • Guys’s as the possessive plural of guy (e.g. What is your guys’s opinion of my idea?)

What Do You Mean? Not to sound like the demon baby of Webster and Roget, but here’s a rapid-fire spray of innocent word misusage you’ve no doubt heard around the boardroom table: prodigal means wasteful, not returning; envy and jealousy are not the same thing; same goes for less and fewer, further and farther; unique means one of a kind (complimenting—not complementing, mind you—something by calling it “very unique” is on par with congratulating a woman for being “somewhat pregnant”). And “irony” is not “coincidence,” as Weird Al Yankovic sings in “Word Crimes,” the parody of Robin Thicke’s “Blurred Lines.” You know what? You could have actually skipped reading this column and watched the video. It’s on YouTube, and it pretty much covers all of this in a much more entertaining manner. Oops. Probably should have mentioned that up front. Roger Snow is a senior vice president with Scientific Games. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of Scientific Games Corporation or its affiliates.

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NEW GAME REVIEW by Frank Legato

God of Gold AGS

his is the second game in the AGS Coin Bonanza game family, featured on the new Orion Curve cabinet. The main feature in this game family is the “Cash on Reels” (COR) mystery feature, which pays the cash amounts displayed on coin symbols when two land adjacent to one another or stacked. The base game is a five-reel, 50-line video slot. The Cash on Reels feature is aided by the two clever main characters, an Asian king and his dog. Randomly, either character can throw down COR symbols on the reel window with credit prizes. The dog can also randomly throw down a progressive prize or free spins on the COR symbol. Three levels of progressive jackpot also are triggered through the Cash on Reels feature. The top Grand, resetting at $10,000, or smaller Major and Minor symbols, when landing adjacent to or stacked with a COR symbol, awards the corresponding jackpot. Three, four or five scattered bonus symbols trigger eight, 12 or 20 free spins, respectively. Alternatively, the free-spin round can be triggered by landing a COR symbol bearing “Free Spins,” which triggers eight free plays. The free spin round can be retriggered if these symbols land during a free game. Another bonus feature, Coin Bonanza, can be triggered

randomly at the start of any base-game or free spin. A random number of COR symbols ranging from one to 25 is added to the reel window. Any Cash on Reels prize can be randomly boosted by the dog character, which will run across the screen boosting the credit amounts. Manufacturer: AGS Platform: Orion Curve Format: Five-reel, 50-line video slot Denomination: .01, .02, .05, .10, .25, .50, 1.00 Max Bet: 750 Top Award: Progressive; $10,000 reset Hit Frequency: 31.9% Theoretical Hold: 5.08%-15.77%

3X Wild Diamonds IGT

his is a classic mechanical reel-spinning stepper slot on IGT’s S3000 Classic cabinet, featuring three different wild symbols, including a 3X wild symbol that multiplies the jackpot by three in a winning combination, and by nine if two land in a win. Three of the 3X wild symbols on the diagonal ninth payline at max bet return the game’s top progressive, resetting at $40,000. On any other payline, the combination pays a stagnant award of $7,500. The other two wild symbols, represented by blue and pink gems, also return progressives when three are lined up on any payline. Three bluegem wilds return a progressive resetting at $600; three pink gems, a progressive starting at $1,750. Any mixed combination of three 3X, blue-gem and pink-gem wilds on a payline returns a progressive resetting at $300. The rest of the pay schedule is populated by traditional bar and “7” symbols, with four separate winning “7” combinations. This is a classic volatile stepper game, designed for high denominations, which here range from quarters to $5.

Manufacturer: IGT Platform: S3000 Classic Format: Five-reel, nine-line stepper slot Denomination: .25 to 5.00 Max Bet: 9 Top Award: Progressive; $40,000 reset Hit Frequency: Approximately 30% Theoretical Hold: 4%-11%

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CUTTING EDGE by Frank Legato

Seamless Deposits PRODUCT: PayNearMe Platform MANUFACTURER: PayNearMe

s an iGaming operator, you want to make moving funds in and out of your platform as seamless as possible for players. Friction in the payments process, whether it’s failed deposits, limited payment types or slow payouts, can have a lasting negative impact on player experience—impacting your ability to attract and retain loyal players. With PayNearMe, operators can accept deposits faster and more reliably, with a mix of payment methods that appeal to nearly all player preferences. Players benefit from a simplified deposit experience that supports their favorite payment options, including cards, ACH, cash, and Apple Pay and Google Pay. In addition, operators can rapidly send payouts (via debit cards, RTP network, ACH, etc.) without having to manage multiple vendors or integrations. “Managing multiple third-party vendors and contracts is not only an administrative and technical burden for operators, but it also creates a disjointed experience for players during a crucial touchpoint—payments in and out,” says Michael Kaplan, chief revenue officer and General Manager at PayNearMe. “Operators can now consolidate key payment types—

including Apple Pay and Google Pay—along with payouts onto a single payments platform built specifically for iGaming.” Over the past decade, PayNearMe’s innovative cash barcode technology has powered cash deposits for nine of the 10 largest operators as measured by gross gaming revenue (GGR). Unlike some cards and bank accounts, cash deposits are reliably accepted, minimizing the chance of failed deposits and frustrated players. PayNearMe is accepted at 20,000-plus retail locations, including participating 7-Eleven and CVS stores across the U.S. PayNearMe’s Smart Link technology gives players the ability to make a deposit in two clicks—without having to navigate through the cashier page. Operators can text, email or use native app push notifications to send players reminders, announcements, incentive promotions or other player engagements, along with a link they can click to make a deposit anytime, anywhere. PayNearMe is dedicated to making iGaming payments easy for operators and players. The company’s technology focuses on removing friction to enable operators to deliver a best-in-class player journey throughout the deposit and payouts process. With PayNearMe, operators get to market faster with one platform, one partner and one integration. For more information, visit paynearme.com.

In-Game Power PRODUCT: Instant Betting MANUFACTURER: Kambi

he quality of a sportsbook’s in-game offering is increasingly the key differentiator between an excellent sports betting experience and a merely good one. Looking at the U.S. betting market, the ratio of in-game wagering is steadily rising as bettors become more familiar with regulated sports wagering. The appetite was there from the onset following the 2018 repeal of the Professional and Amateur Sports Protection Act, with Kambi finding that over half of U.S. bettors placed an in-play wager within their first five bets of joining in April 2019, and overall engagement levels with Kambi’s live offering continue to rise steadily in 2021. With the growth of in-game betting comes an accompanying rise in the number of players engaging with Kambi’s extensive range of instant markets across its U.S. partner network. These are markets where bets are placed and settled swiftly, such as the next point winner in tennis or whether the next field goal in basketball will be a two- or three-pointer. Interest in these markets in the U.S. is growing significantly. In fact, across Kambi’s U.S. partner network in 2020, there was a threefold year-on-

Global Gaming Business JUNE 2021

year increase in instant betting as a proportion of all NFL live turnover, spurred by markets such as “result of current drive.” Furthermore, Kambi was the only sportsbook, both B2B and B2C, observed to offer instant markets on the MLB World Series in 2020. Kambi’s unique “result of pitch” market accounted for close to a quarter of the company’s live turnover throughout the length of the competition, demonstrating the potential of a sophisticated instant betting offer to drive consistent engagement with the sportsbook. Crucially, Kambi has found that U.S. players who engage with instant betting place more wagers overall during a game, illustrating the impact a high-quality instant offering can have in not only attracting players, but having those players demonstrate higher levels of engagement. The power and complexity under the hood required to present a comprehensive range of instant markets in a seamless manner to the bettor, with low delays, cannot be overstated; nor can the expertise this requires in proprietary pricing. The growing popularity of instant betting clearly illustrates the need for a best-in-class sportsbook, underpinned by proven, high-performance technology in meeting the demands of the modern player. For more information, visit kambi.com.

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GOODS&SERVICES

Hakkasan at MGM Grand

TAO GROUP BUYS HAKKASAN GROUP

n a combination of giants in the nightclub industry, the Tao Group has purchased the Hakkasan Group. The two companies were hard hit during the pandemic, when Hakkasan immediately laid off all its employees only weeks after it began. Although the combination of the companies includes more than 60 venues across five continents, the largest impact will be in Las Vegas, where Tao will now be the undisputed king of nightlife. Its Las Vegas nightclubs include Hakkasan at MGM Grand, Tao at the Venetian, Marquee and Beauty & Essex at the Cosmopolitan, Omnia at Caesars Palace and the Jewel Nightclub at Aria. Even though the nightclubs began reopening almost a year ago, capacity limitations and health and safety procedures have prevented them from even reaching the break-even point. The clubs, however, got a boost on May 1 when capacity was raised to 80 percent in Las Vegas. Even before the pandemic, however, the nightclub business was fraught with uncertainty. The failure of Kaos at the Palms shook the business to its core. The recent announcement that Resorts World Las Vegas will include at least two nightclubs featuring DJ superstars Tiesto and Zedd shows the cost of running a successful nightlife business won’t be going down anytime soon. The Tao Group is majority-owned by Madison Square Garden Entertainment, which is currently building The Sphere, a 20,000-seat, state-of-the-art arena behind the Sands Expo Center.

IGT SIGNS SEVEN-YEAR MARYLAND SYSTEMS DEAL

nternational Game Technology announced that its subsidiary, IGT Global Solutions Corporation, was awarded a long-term contract from the Maryland Lottery and Gaming Commission to upgrade the

Global Gaming Business JUNE 2021

video lottery central system that connects more than 11,500 video lottery terminals (VLTs) and electronic table games (ETGs) across the state’s six casinos. The contract runs through September 2028 and includes the option to extend for up to an additional four years. IGT will install its enhanced Intelligen video lottery central system software that supports the volume, complexity and security of monitoring and controlling every VLT and ETG in Maryland. The upgrade features sophisticated site controllers that will maintain network diagnostics and communications between all gaming machines, and will provide advanced business intelligence tools for easy day-today operations management and reporting, and new disaster recovery technology. IGT deploys its Intelligen systems worldwide, connecting a wide range of VLTs in a variety of gaming environments. The software is built on IGT’s more than 25 years of central systems experience and offers stable, secure command and control capabilities.

GAN TECHNOLOGY NOW POWERING RMG FOR CHURCHILL DOWNS

ating framework. Dermot Smurfit, CEO of GAN, commented, “The team did an amazing job of concurrently migrating and launching TwinSpires’ sportsbook and iGaming offering in three states in the span of a week, which serves to highlight our speed to market and unique capabilities to seamlessly hanGAN’s Dermot Smurfit dle highly complex migrations. We remain humbled to work with an industry-leading entertainment company with some of the most historic and diversified assets in the gaming industry. We look forward to our continued partnership to assist Churchill Downs Inc. in its efforts to replicate their longstanding success in land-based gaming in online sports betting and iGaming.”

KONAMI LAUNCHES OCEAN SPIN SERIES

onami Gaming, Inc. announced the launch of its Ocean Spin video slot series for availability in North America, following high rates of ongoing performance across debut locations. The premium linked progressive game is featured on Konami’s award-winning Dimension 49J cabinet, which has seen widespread success since premiering last year with the popular All Aboard game.

AN Ltd., a leading full-service internet gaming software-as-a-service provider to the realmoney internet gaming online sports betting and simulated gaming industries, announced a successful multi-state transition onto its platform for Churchill Downs Inc.’s TwinSpires-branded sports betting and iGaming operations in Pennsylvania and sports betting operations in Indiana. Additionally, GAN launched inaugural mobile sports betting operations for TwinSpires in Colorado, which, when coupled with the previously launched solutions in Michigan and Tennessee, brings the GAN-powered TwinSpires brand to five total states. Following the migration onto GAN’s technology platform, the company supports TwinSpires Sportsbooks in Michigan, Colorado, Tennessee, Pennsylvania and Indiana with its leading player account management platform, in addition to powering TwinSpires’ casino offering in Pennsylvania and Michigan. Both online casino and sports customers will be able to enjoy an uninterrupted playing experience with any product, in any state, on a single app leveraging GAN’s proprietary technology oper-

Indexing as high as five times house average, Ocean Spin’s starting performance has achieved even greater levels than All Aboard’s starting performance, according to the company. Ocean Spin is the industry’s No. 1 top performing New Premium Video Title, according to ReelMetrics’ April 2021 ReelHot Index. “Ocean Spin has shown an exceptionally strong arrival for initial casino sites in the U.S.,” said Tom Jingoli, executive vice president & chief operating officer at Konami Gaming, Inc. “The game’s eyecatching wheel spin bonus, transportive play environment, and outstanding presentation on the

p. 50 goods:Layout 1 5/13/21 10:48 AM Page 51

casino floor all come together for a winning slot entertainment spotlight.” Ocean Spin is the second premium series released on Konami’s Dimension 49J cabinet, which features a 49-inch, J-curve display in 4K Ultra High-Definition (UHD). At the top of each game screen, animated bubbles float seamlessly across every connected machine, filled with potential bonus opportunities. During the game’s signature Ocean Spin Feature, the player is invited to spin the animated bonus prize bubbles by swiping across the large touch-screen display. Prize bubbles whiz across the entire bank or pod, until the spinner lands on a credit award, free games or instant progressive jackpot with full-screen celebration. Ocean Spin is available with a variety of bank and pod configuration options.

AINSWORTH, SLOTEGRATOR TO DISTRIBUTE iGAMES

MAVERICK, MARKER TRAX, SG PROMOTE CASHLESS

ashington-based Maverick Gaming is introducing cashless advances to its customers right at the machine, in partnership with Marker Trax and Scientific Games. Wendover Nugget Hotel & Casino in Wendover, Nevada will be the first in the Maverick portfolio to offer this innovative technology to its slot and video poker customers. Customers can apply for a Marker Trax account either online or through a mobile app, and can be approved in less than five minutes. Through an interface with Scientific Games’ robust SDS slot management system and industry-leading Unified Wallet cashless solution, approved funds are immediately available to the customer electronically at their machine. Scientific Games technology will also record, manage and track customers’ cashless advances and balances, seamlessly enhancing both the customer’s experience and the operator’s efficiency. “Maverick Gaming is committed to providing a first-class experience to our customers, safely and

conveniently. We are excited about the debut of Marker Trax at the Wendover Nugget property and look forward to future expansion of this cashless offering throughout our enterprise,” said Justin Beltram, chief operating officer of Maverick Gaming. Enrollment in Marker Trax is free, and gives the customer the ability to play on a cashless advance from the casino. The advance will be available to the customer as they play different machines throughout the casino. Customers will have access to their account information on the mobile app and through the website. “Together with our partners at Scientific Games, we are honored to be working with Maverick Gaming with the introduction of Marker Trax to their valued customers,” said Charlie Skinner, Marker Trax COO. “The technology is unrivaled, and we look forward to a successful launch with the team at the Wendover Nugget in Nevada.” Rob Bone, senior vice president, global systems and tables at Scientific Games, said, “As cashless technology gains momentum, players are seeking a more efficient and customized experience on the casino floor. Our partnership with Marker Trax demonstrates our focus on cashless technology and our innovative cashless applications that enable a more engaging and personalized mobile player experience.”

insworth Game Technology announced last month that it has partnered with Slotegrator, an iGaming aggregator, to distribute its video slot content in the Eastern European online casino market. Slotegrator’s APIgrator solution makes it possible to easily integrate Ainsworth slots into online casino operators’ platforms. The European-based company incorporates slots, card games and virtual sports from more than 60 game developers across the world. Among the titles that will soon be available via Slotegrator are classic Ainsworth titles such as the QuickSpin brand of wheel games, proven high-performing, high-denomination titles, and worldwide player favorites like Mustang Money. Additionally, Ainsworth will provide a variety of new game content that has been successful in Australian and North American markets such as Pan Chang, Lucky Break and Kanga Cash. “We are continuing our strategy to expand Ainsworth offerings across regulated markets throughout Eastern Europe,” said Ainsworth Online General Manager Jason Lim. “We are excited to begin working with Slotegrator to offer our proven games to a variety of new online casino operators within the Slotegrator distribution network.”

JUNE 2021 www.ggbmagazine.com

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PEOPLE ART MANTERIS STEPS DOWN

here are few sportsbook operators who have lasted as long in the business as Art Manteris retires. As the head of the sports betting operations for Station Casinos in Las Vegas, where he spent 22 Art Manteris years and will continue as a consultant, Manteris was renowned for his knowledge of sports betting, the art and science of setting lines, and a comfortable understanding of how the business has changed in the last few years following the legalization of sports betting in the United States. Manteris started his career in the late 1970s as a ticket writer at the Fremont Hotel in Downtown Las Vegas. He later moved to the Stardust, one of the legendary sportsbooks in the day, to operate the manual odds board, where he had to physically move numbers for bettors to check their wagers. Later he ran the “Superbook” at the Las Vegas Hilton (now the Westgate) and Caesars Palace—again, both important books at the time.

MACAU’S TOP REGULATOR OK’D FOR ANOTHER TWO YEARS

driano Marques Ho, director of Macau’s Gaming Inspection and Coordination Bureau since last June, has been confirmed as head of the territory’s Adriano Marques Ho casino regulatory agency for another two years. Macau Chief Executive Ho Iat Seng initially appointed Ho to the post last June, six months after taking over stewardship of the territory’s government. Prior to joining the DICJ, as the bureau is known by its Portuguese initials, Ho served for six years as head of the local sub-bureau of the China National Central Bureau of Interpol.

RIVERS PHILADELPHIA NAMES MOORE GM

ush Street Gaming announced that Justin Moore, former general manager of Rivers Casino & Resort Schenectady, has been named general manager of Rivers Casino Philadelphia, pending approval from the

Justin Moore

Pennsylvania Gaming Control Board. Moore joined Rivers in Schenectady soon after the property opened in 2017. He helped establish the Rivers Casino brand in a new and competitive market, operated The Landing Hotel, and debuted New York’s first sportsbook, while earning a marketleading position. Before joining Rush Street, Moore spent 16 years working in Nevada at various casinos and resorts, beginning as a food server in Mesquite and eventually serving as vice president and assistant general manager at Green Valley Ranch Resort & Casino.

SIGHTLINE EXPANDS MANAGEMENT TEAM

intech company Sightline Payments announced it has appointed five new executives to its senior leadership team. John Gronen joins Sightline as chief financial officer, while Jennifer Carleton will Felecia Gassen serve as the company’s chief legal officer. Through its recent $100 million funding round announced on April 1, Sightline Payments has also appointed Muriel Lotto as chief marketing officer, while Katrina Sevier will serve as its chief people officer and Felicia Gassen will be chief of staff. The executive appointments strengthen Sightline Payments’ leadership as the company scales to support rapid growth and customer demand. Gronen, as CFO for Sightline, will oversee all finance operations including banking, treasury, budgeting and reporting. Gronen will also play key roles for Sightline in M&A and fundraising in support of the company’s high-octane organic and inorganic growth strategies. Carleton joins Sightline having spent her entire legal career in the gaming sector. She was in-house counsel for an Indian casino and for the last 14 years was an adviser to some of the premier public and private gaming and investment companies in the world. Lotto brings over 25 years in international marketing to her new role as Sightline Payments’ chief marketing officer. Lotto has worked in France, the United Kingdom, Switzerland and in the United States at leading companies including Nestle, Unilever, Royal & SunAlliance, Bupa and Western Union. Sevier brings expertise around the ever-changing organizational landscape of culture and talent to the role of chief people officer. She will be tasked with growing Sightline Payments’ team, which will double in size this year.

Gassen has been appointed chief of staff to CEO Joe Pappano and the executive leadership team. She is the former executive director of Global Gaming Women, where she managed the executive board of directors, committees, sponsorship and global membership.

LAS VEGAS ATTORNEY NAMED TO GAMING CONTROL BOARD

overnor Steve Sisolak has appointed Las Vegas attorney Brittnie Watkins to the Nevada Gaming Control Board. Watkins, a specialist in commercial litigation, inBrittnie Watkins cluding the hotel and gaming industries, and the first African American woman elected to the State Bar of Nevada Board of Governors, replaces Terry Johnson, whose term expired earlier this year. Watkins is the second African American woman to serve on the three-member board, which serves as the principal enforcement arm of the state’s gaming regulations and whose licensing recommendations and other policy decisions generally are endorsed by the Nevada Gaming Commission. Las Vegas attorney Sandra Douglass Morgan was the first woman and also was the first African American woman to chair the Gaming Control Board.

GGB

June 2021 Index of Advertisers

AGEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 AGEM & AGA Annual Golf Classic . . . . . . . . . . . .23 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Aristocrat Technologies . . . . . . . . . . . . . . . . . . . .56 Aruze Gaming . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Casino Player Media . . . . . . . . . . . . . . . . . . . . . . .49 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Fantini Research . . . . . . . . . . . . . . . . . . . . . . . . . .51 Fox Rothschild . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Gaming Laboratories International . . . . . . . . . . .13 GAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Global Gaming Business/Casino Style . . . . . . . . .35 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16, 17 IGT PlayDigital . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Incredible Technologies . . . . . . . . . . . . . . . . . . . .37 J Carcamo & Associates . . . . . . . . . . . . . . . . . . . .52 Kambi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6, 7 NIGA - Indian Gaming Tradeshow & Convention 39 Novomatic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Reed Expo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Unity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

JUNE 2021 www.ggbmagazine.com

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CASINO COMMUNICATIONS

&AAndrew Pascal

rom Silicon Gaming to WagerWorks, and from Wynn Resorts to PlayStudios, Andrew Pascal is one of gaming’s most entrepreneurial individuals. His tenure with PlayStudios has been his longest, as he helped to pioneer the field of social gaming. PlayStudios recently went public as a special purpose acquisition company (SPAC), and Pascal explains what this means for the company and its future. He spoke with GGB Publisher Roger Gros from his offices in Las Vegas in April. For a full Zoom podcast of this interview, visit GGBMagazine.com.

GGB: You’ve been involved in a lot of startups in your life but you’ve been with PlayStudios now for quite some time. Why has this been such a fulfilling journey for you? Andrew Pascal: I think it’s just a combination

of all the other things that I’ve done. It was an opportunity to do something that was creative, technically challenging, and required a really diverse collection of people and disciplines and skill sets. And its core was about an industry that I love, which is all things related to gaming. So for all those reasons it’s been able to not just hold my interest; I just think there’s so much opportunity we’ve yet to fully realize, and it’s got us all charged up and still deeply engaged. Your time with Wynn Resorts was really at the peak of Steve Wynn’s creativity. He was designing this incredible facility in Las Vegas and then he went on to Encore, but you had to run the operations there. What do you bring from that experience to PlayStudios?

There were a lot of amazing lessons that I draw upon from my time working for both Wynn Resorts and its predecessor Mirage Resorts. There’s a relentless attention to the details and the quality of the experience and the consistency with which you execute and deliver. There’s a certain discipline that you bring to what you do

Global Gaming Business JUNE 2021

President & CEO, PlayStudios with something that was deeply ingrained in me growing up inside of the Mirage company. So when Steve ultimately formed and started Wynn Resorts with Elaine it was their ambition to, again, redefine the resort experience here in Las Vegas. And they really wanted to do something that they’d not yet accomplished, which was to establish a quality bar and a service standard that would rival the most luxurious hotels anywhere in the world. So that really was our principal focus. PlayStudios has a very different focus in terms of its look, its digital content, and it’s distributed on these massive platforms which are the Apple App Store, Google Play and Facebook. But when it comes right down to it, all of this great content is created and executed by amazingly talented people. I feel blessed that I’ve spent half my career in the more traditional integrated land-based casino industry and the other half building these technology-enabled content companies and game companies. People might think they are so wildly different. But what I’ve always found really remarkable is that there are so many lessons to be learned in pursuing each of those types of business opportunities that relate to or can be applied in the other case. So it’s been amazing. The first app that you developed with PlayStudios was myVegas, and that certainly was a revolutionary social casino app. Give us a little of the genesis of that idea.

The idea was to extend the experience of Las Vegas first onto Facebook and then on the mobile devices. And we knew to do that it meant not just really great games, which we clearly understood how to go create, but the whole value proposition of Las Vegas, which is the more you play, the more this world of benefits reveals itself to you. I talked to Paul Mathews, my partner, and we agreed that Las Vegas is really the first social game experience. People come here and they translate real-world currency into this abstracting currency, which is chips and tokens, and then they play. And

the more they play well, all of a sudden the games get more interesting and this world of benefits starts to reveal itself, and you get assigned to a host, and all of a sudden you get access and upgrades and complimentary services. So we realized that is what we need to create with the products that we’re now going to go and build. So that was myVegas, which when we launched on Facebook, people immediately responded to as a model and as a value proposition. And so we knew we had something. We knew pretty early on that consumers were really responding to this idea of play-for-free and earn-for-real. Tell us about taking PlayStudios public.

We have an agreement with a SPAC called Acies, which is run by Jim Murren. Acies has $215 million in trust. We then went and raised another companion PIPE (private investment in public equity), which was originally to be $200 million, but the demand was quite strong. So we ended up sizing that up to $250 million. So the total transaction could be as much as $465 million. What will going public mean for PlayStudios?

We are looking at it as an opportunity. We have a proven history, consistent growth, profitable, all of our forecasted growth and the value was driven by our own organic efforts. It doesn’t consider any M&A activity, which is really the principal reason for going public. It’s to have the currency, both cash and a liquid equity that we can now use to go and buy some companies. And whether they’re small companies that have really interesting technology and products that we want to more fully exploit or very mature, bigger companies that have existing products and players that we want to incorporate into our model and our framework, those are the kinds of things that we’re going to go do with this resource.

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© 2021 IGT Global Solutions Corporation. The trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where indicated with a ®, are registered in the U.S. IGT is committed to socially responsible gaming. Our business solutions empower customers to choose parameters and practices that become the foundation of their Responsible Gaming programs.

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Global Gaming Business June 2021

Articles inside

Cutting Edge

Making My Point

Emerging Leaders

AGA

Frankly Speaking

The Agenda

Fantini’s Finance