Spectrum Gaming Group Releases Top Trends to Watch for 2021
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October 5, 2020 - HORSHAM, PA - As it has been doing annually since 2005, Spectrum Gaming Group today released its annual list of the top trends in gaming – the most significant issues that regulators, operators and suppliers need to consider as they make plans for the coming year. Spectrum has long focused on the future of gaming. Spectrum has completed engagements in 40 US states and territories and in 48 countries on six continents, with clients that include 22 US state and territory governments, six national governments, 22 Native American entities, numerous gaming companies (national and international) of all sizes, suppliers, lotteries, financial institutions, developers, and other gaming-related entities.
This list (ordered alphabetically), with input from our global experts on the ground around the world, represents both the opportunities and challenges that will be most impactful to revenue, profitability and public policy.
1. Efforts to authorize integrated resorts in Japan will continue, even as Japan is dealing with a change of government and a global pandemic. The government is expected to take affirmative efforts to advance the complex process surrounding the issuance of IR licenses; if it does not, it will risk further delays and the loss of interest in Japan by many of the major gaming companies.
2. More North American lotteries are contemplating and developing digital offerings, and that will lead to a snowballing effect that will force other lotteries to develop their own offerings. This will create significant challenges in multiple areas as ilottery offerings could compete against igaming offerings, creating potential further conflict and competition between lotteries and traditional gaming operators.
3. On the heels of widespread adoption of traditional sports wagering across the United State, esports wagering will emerge as an important subset that creates a new intersection between the casino and esports industries. This will, in turn, create demand for licensing requirements for esports providers, as well as the need for governing bodies to oversee esports events. Related to that, the demand for peer-to-peer wagering within esports will also create the need for regulatory oversight.
4. Retail gaming operators that have revised their business models during the COVID-19 pandemic have learned that they can generate significant revenue with lower labor costs by focusing more of their marketing efforts on more valuable consumers, which makes it less likely that those operators will revert to pre-pandemic staffing levels in a post-pandemic world. Operators that had relied heavily on promotional spending, buffets (many of which may remain closed even in the post-pandemic world) and other traditional marketing tools will be more discriminating. Related to that, retail gaming facilities will market themselves as “safer” zones for leisure activities, thus gaining an edge over other leisure offerings.
5. The New South Wales Gaming & Liquor Authority Crown Inquiry has raised serious and pervasive concerns relating to anti-money-laundering, casino due diligence, junket controls, corporate governance and overall casino compliance related to the Crown casinos in Melbourne and Perth, which will result an enhanced emphasis on casino compliance and AML issues throughout Australia and Asia and more robust governmental regulation of VIP play.
6. The ongoing COVID-19 pandemic creates opportunities for technology providers to offer “digital first” gaming offerings as jurisdictions around the world forego the more traditional route of starting with a retail offering and then migrating to digital. Related to that, app developers will create and launch bespoke loyalty and multi-channel programs that will leverage these digital offerings. These apps are more likely to resonate well with millennials.
7. The pandemic will advance efforts to authorize and encourage new forms of cashless wagering at retail casinos. Cashless wagering has become a priority for operators, particularly in the United States. Lawmakers and regulators are likely to be more amenable to arguments that payment modernization is safe, and allows for more effective anti-money-laundering and know-your-customer policies.
8. The world’s largest gaming destinations will continue to feel the effects of COVID-19 throughout the coming year. Travel-related impediments – combined with a possibly lengthy recession brought on by small business closures throughout the United States – will slow the economic recovery in Las Vegas. Meanwhile, the Macau gaming industry will face a slow but steady increase in both visitation and gross gaming revenues as it transitions to more of a destination market, catering to visitors to Macau primarily consisting of the mass and premium mass markets segments. Government-imposed restrictions on travel for Chinese nationals will create repercussions throughout Asian gaming, including severely restricting the ability of junket operators outside Macau to function.
9. US states that have developed longstanding compacts with tribal operators will feel increased pressure to reopen negotiations to address issues such as digital sports betting and igaming that were not part of existing compacts that were negotiated before such offerings existed. In the absence of revised compacts, concepts such as geographic exclusivity for tribal operators will become increasingly difficult to enforce.
10. US states will continue to look for new gaming revenue, and that need is significantly enhanced by the ongoing pandemic that has severely crimped state finances. The new offerings will include the potential expansion of digital offerings in sports betting, igaming and esports, as well as the authorization of distributed gaming, including skill- based games.
About Spectrum Gaming Group: A non-partisan consultancy that specializes in the economics, regulation, and policy of legalized gambling worldwide. We have provided independent research and professional services to public- and private-sector clients since 1993. We bring a wide industry perspective to every engagement, having worked in 40 US states and territories and in 48 countries on six continents. Spectrum serves as Executive Director of the National Council of Legislators from Gaming States (NCLGS), a testament to the credibility, quality, and independence of their work. For more information, visit spectrumgaming.com or call 609.926.5100.