INDUSTRY Q&A

MOVING WITH THE TIMES

COVID-19 has accelerated the trend towards increased digitized gaming options, and industry giants are helping drive the change.

It’s a changing world right now, and the gaming industry is no different.

Gaming has been hit hard by closures and falling revenues during COVID-19. The stark reality is that even once things are under control and we can begin to return to a form of “normal”, things will look strikingly different than they did pre-pandemic. In some ways, gaming will never be the same again.

While there have been notable negative repercussions, the pandemic is also playing a role in accelerating innovation within the industry. How customers gamble and the options that are available to them are evolving at a fast rate.

The industry was already shifting pre-pandemic towards exploring and employing more technological advancements, including cashless options for playing. Part of this was the gaming industry’s attempt to keep up with wider social trends, with the population looking for more convenient, easy, and efficient ways to conduct transactions. COVID-19 has been an accelerant in that regard, as that trend was magnified by new safety concerns.

In reality, this is the direction gaming has been going in for some time. The Canadian Gaming Association’s Standards for Cashless Systems – a concerted, collaborative, industry-wide effort to provide a thorough framework for cashless wagering – recognize that we embrace technology in our daily lives, especially when it comes to paying for things.

Canadian Gaming Business spoke to industry giants Everi, International Gaming Technology (IGT), and Scientific Games about the industry-wide trend towards cashless. All three companies had been working on this prior to the onset of COVID-19, and they discussed the impact the pandemic has had, the cashless options they already offer to consumers, and how this technology may help the Canadian gaming industry.

These interviews have been edited for length and clarity.

Participants:

Kathiravan Palanisamy, Senior Director, Software Engineering at Scientific Games: Ryan Reddy, IGT Vice President of VLT, Systems, and Payments Products at IGT: Darren Simmons, Executive Vice President and FinTech Business Leader, at Everi:

HOW MUCH HAS THE DEVELOPING TREND TOWARDS CASHLESS GAMING BEEN DRIVEN BY CONSUMER DEMAND?

Kathiravan Palanisamy, Senior Director, Software Engineering at Scientific

Games: “Digital payments are a big part of everyday lives for many consumers, even those less proficient with digital tools. Based on recent surveys, we now see strong consumer demand for digital payment solutions for wagering.”

Ryan Reddy, IGT Vice President of VLT, Systems, and Payments Products

at IGT: “Especially within North America, we’ve been seeing consumers naturally gravitating towards cashless options in all industries. In the gaming space, that natural trend is now crossing over. End users are accustomed to having this in Starbucks; now, they want to see it in their casinos. One conclusion we find consistently is that offering contactless payments is now a deciding factor for players.”

Darren Simmons, Executive Vice President and FinTech Business Leader, at Everi: “The reality is that this technology has been out there forever. It may not yet be prevalent in North America but in jurisdictions like Europe, cashless has been very common. These channels give operators and regulators greater engagement and the ability to deliver the important things. A lot of this can be automated as you move towards digital, and that is a large driver behind it. Consumers want technology.”

HOW HAS COVID-19 ACCELERATED THE MOVE TOWARDS CASHLESS?

Simmons: “The pandemic has pivoted the conversation and made it that much more urgent. There are some safety concerns such as the need for social distancing and the desire among segments of the population to avoid having as much in-person interaction. There was talk of physical cash being problematic from a health and safety standpoint, but that was refuted largely by the WHO and the CDC. For our business right now, cash is still playing a significant role. The reality, though, is that the move towards digital is gathering pace and has a number of benefits.”

Palanisamy: “Consumer adaption of mobile payment methods for online and social commerce has increased significantly since the onset of COVID-19. We were ready to bring our cashless solutions to the floor as the pandemic accelerated interest in them dramatically. We’ve seen increased demand across the globe, including in Canada, and recently rolled out our cashless solution at a few of our customer sites.”

Reddy: “Initially, this trend was about push rather than pull in that we as suppliers were going to operators and making the case, researching it with players, and pushing it forward. COVID-19 has changed that. It’s become much more of a pull. Customers are increasingly likely to lean towards casinos that offer contactless payments because they’re getting much more comfortable with this as a means of payment and interacting with goods and services. It also fits well with social distancing, as you don’t have to stand in line at an ATM or a kiosk for cash like you used to. Interactions that might have been challenging in a socially distanced environment now are much easier because you’re able to do these things on your mobile.”

WHAT ARE THE MAIN DISTINGUISHING FEATURES OF THE CASHLESS OFFERINGS YOU CURRENTLY PROVIDE?

Reddy: “With this part of the business, I think you see a lot of synergy across our different product verticals. Historically, we’ve had carded cashless in a number of places around the world. A few years ago, we introduced on the casino systems land-based side our Cardless Connect product in a number of properties. We also instituted our proprietary payments gateway to external funding, IGT Pay, as far back as 2013, specifically in digital and sports betting and some lottery segments. We felt like the true tipping point came in adding external funding to the equation: access to sources like banks, credit cards, debit cards, etc. We also have a robust capability in terms of payments and a lot of the back-office activities that we were providing for digital customers, which can be ported into different spaces. The real synergy was in bringing these pieces together and making IGT a turnkey full-service cashless provider. Our offering now to the market is our traditional Resort Wallet cashless product plus IGT Pay for external funding, plus all of the services that go with it.”

Simmons: “We currently have some solutions live in casinos including CashClub Wallet, our fully cashless integrated mobile solution. Cashless has been present in Europe for some time, but what hadn’t really been done was attaching a cashless wagering system to some external funding source. Our FinTech business has now also added self-service hardware devices, full-service kiosks that manage the TITO technology we have today. We also got into the anti-money laundering (AML) compliance business as well as loyalty offerings like promotion and enrolment for players’ clubs. It’s very exciting for us. Casino operators just want to know how they can become cashless, but you need to take into account all of these things because they all affect one another. We didn’t want to suddenly drop something new externally into their environment; instead, we leverage the existing infrastructure we provide within our ecosystem of products and services to build in all these services. Settling transactions, AML compliance tools, aggregating transactions, providing loyalty and promotional players’ club aspects. It’s just an extension of a lot of what we’re providing today.”

Palanisamy: “Our Unified Wallet powers a cashless gaming experience by giving players the power to instantly access funds through a mobile app. The cashless wallet also includes loyalty club registration among a variety of player-centric transactions that are all easily and conveniently accessible. We also offer a proximity-sense Bluetooth card reader at slots, meaning physical player cards are optional. It provides a truly contactless experience by starting the session, funding the game, and depositing credits from the machine back to the wallet directly from the mobile app. Players can choose how they want to fund the wallet and access it at slot, tables, and other points of play and we’ve seen a great response both from our customers and players.”

HOW DO YOUR OFFERINGS BENEFIT CUSTOMERS AND END USERS?

Reddy: “IGT is uniquely positioned in that we offer end-to-end cashless, from the external funding over to the game and back, in a turnkey solution that’s fully integrated with our CMS. There are many advantages to that, as we see them. From the consumer perspective, if you already have a loyalty card with the property, you can use that same card all the way through the transaction. We're calling it ‘one step’ or ‘one account’. A second part is that all the loyalty bonusing aspects can be integrated in our end-toend offering so the data we collect from bonusing and rewards is fully shared. We can offer bonuses specifically to cashless players or external funding players. As an end-to-end provider, we have a substantial advantage over e-wallet providers that may only see part of the transaction or offer products stitched together with CMS providers, because we have a one-step solution and are a single end-to-end provider.”

Palanisamy: “For our Canadian operators, Unified Wallet is a key component in a gaming experience focused on keeping players and employees safe. It offers a frictionless experience and enables greater efficiency on the business side. For example, this technology can eliminate lines at ATMs or at the cage, create efficiencies with mobile-first operations, and reduce costs like bill validator and ticket printer maintenance, tickets, and redemption kiosks. It also offers great benefits for players: a single place to access funds that can be used across a resort or property. Then there’s the safety and security aspects: eliminating the need to handle cash or stand in line at the cage. You no longer need to worry about remembering to bring your player card to the casino. Players are excited about the convenience of not carrying cash, the ability to access their digital wallet at the point of play, the security of the wallet, and ease of use.”

Simmons: “We view our offerings as self-service. We’ve integrated these technologies so operators have all these mission-critical tools that can interact together. By attaching a cashless wagering system to some external funding source, we provide the technology that integrates with these systems so players can have a digital wallet profile with stored credentials, such as how, where, and when you want to access your funds. We also provide the ability to move the money into the gaming system and vice versa. It’s bi-directional. There’s a safety and responsible gaming aspect of it, too. Having all of these core foundations integrated together allows us to address all the things that people sometimes don’t contemplate. This is gaming and there are always security and data privacy concerns. You also need to think of responsible gaming. We don’t want people gaming who should not be, if they’re at risk. It also creates transparency, removes the anonymity of cash by creating an electronic trail. So, it checks a lot of boxes. Having this omnichannel solution, a single repository and digital wallet, is so useful and very powerful.”

HOW DO YOU SEE YOURSELF MOVING FORWARD IN THE CANADIAN MARKET?

Palanisamy: “The next step for us is moving forward with operators as things keep moving forward. We are in a position where we’re more than ready to field test in the market. Given the interest level we see from our customers and the positive response from their patrons and end users, we expect an accelerated adoption of our cashless solution in 2021 and beyond.”

Reddy: “This is not a business where we see cash going away anytime soon, particularly in the commercial casino space: it will be a complementary offering for now as part of a gradual shift. Our hope is that, through bonusing and loyalty incentives to cashless players, we and operators can create an incentive for players to hasten the adoption of it. It’s not a big process for us to have that type of conversation with an operator – we’re ready to go. I don't anticipate there would be a big ramp-up because of how well-positioned we are.”

Simmons: “We work in jurisdictions that have the regulatory infrastructure already to adopt and implement these systems. It varies by jurisdiction and company – it’s not one-size-fits-all – but layering the digital aspects on top of these foundational products and services makes adoption pretty simple. In Canada, we’ve had a number of conversations with operators, jurisdictions, and provincial bodies about furthering cashless. Some components of this will be revolutionary and some evolutionary. Typically, operators will require upgrades to their systems/hardware and the regulations and systems in place to actually implement and deliver it at tables. We could respond very quickly from our end, so they could see it and feel it and test it. The technology is fairly straightforward and intuitive. The systems providers we work with have done a pretty good job of creating a good user experience. Now, it’s just a case of tying together “traditional” online and brick-and-mortar. It’s an exciting time for us and the entire industry.”