At last week’s G2E, the great and the good of the global gambling industry gathered at the Sands Expo centre in Las Vegas for the industry’s major annual event. Hudson Sandler navigated its way through the slot machines, weaved past the roulette tables and dodged the odd Elvis impersonator on our way through the casino floor of the Venetian Hotel (it really is absolutely nothing like the real thing) to the jam-packed conference centre. Here’s a snapshot of what we learnt…
The gambling industry is HUGE
This may seem like we’re stating the obvious. After all, H2GC, the go-to industry data source, predicts that global gambling (measured by operators’ gross win) will be worth a whopping $495bln by 2019. However, it’s only when you’re confronted by exhibitors’ stands stacked in rows as far as the eye can see that you can appreciate the scope and scale of this enormous global leisure industry. With everyone from producers of plastic casino chips to suppliers of (slightly risqué) croupier outfits lined up alongside some of the world’s most cutting-edge technology businesses, it’s clear that G2E continues to be the industry-wide hub to highlight new innovations and prepare for fast-paced evolving market changes.
In the US, it’s all about regulation, regulation, regulation….
Since the repeal of the Professional and Amateur Sports Protection Act (PASPA) (the federal law that previously prohibited states and sovereign tribal nations from licensing or offering sports betting), all eyes have been on which US states will legalise online sports betting, what the licensing regimes will be and, most importantly, when it will happen.
New Jersey was the first to legalise online sports betting (a handful of others already offer it to customers “in-venue” in casinos) and Pennsylvania looks as though it will be next. In the medium term – but whisper it quietly – New York may not be too far away. G3Newswire, the industry publication, predicts that more than 30 US states will legalise some form of sports betting – whether that’s online, in-venue or both – over the next five years. If this comes to fruition, it would no doubt create the biggest online gaming market in the world…
…. but we believe it would be a mistake to view the US as one single market when it comes to online betting. Rather, the online betting industry in the United States will likely develop as a combination of myriad fragmented markets, each with different (and complex) licencing regimes, varying tax rates and competitive landscapes. In New York, for example, it might be that licences to operate betting online may only be allocated to the four land-based casino operators that currently have a presence in the state. So we urge an element of caution when it comes to excitement about state-by-state regulation; the devil will be in the detail.
The Europeans are coming….
American novelist Mark Twain once said “during the gold rush it’s a good time to be in the pick and shovel business.” The picks and shovels that the big American casinos need to exploit the new gambling gold rush is the sophisticated technology that European online gambling companies have developed over the past 20 years of operation.
Five years ago at G2E, there were only a handful of European online operators on show. This year it was nearly half of the footprint of the vast Sands Expo centre. Familiar operators like Kambi and Playtech had impressive and busy exhibits showcasing their betting software to interested buyers. Whilst the picks and shovels that were at the heart of the mid-19th Century Californian goldrush have been replaced by sophisticated software platforms, the principle remains that those who supply the kit that is needed to extract value are in a very enviable position.