America waking up to a new betting dawn?

Walking through the huge halls of the Sands Expo in Vegas at the US gambling industry’s major annual conference G2E there was one thing notable by its absence. Amid the towering slots cabinets and walls of TV screens showing virtual sports, casino games and even sports there was almost no online content whatsoever. In the words of one European gaming executive: “It’s like the internet never happened.”

Within the US, the land-based casino industry is still king and queen of the gambling sector, and G2E bore testament to this with endless acres of floor space given over to visually stunning slot machines. Huge curved triple screen machines were commonplace, as were machines with massive built-in monitors displaying scenes from the latest big brand franchises. Everything was bigger, brighter and decidedly tangible.

The online world on the other hand felt like barely an afterthought. At the IGT stand there was a small section devoted to interactive, while Scientific Games left it mostly to the newly acquired NYX to plough the furrow for the digital sector. It felt a little like a world reimagined as one in which the internet didn’t exist and one where entertainment in casino gambling was about an intense, truly immersive experience in a high-tech world that only existed in true 3D.

No change, or all change?

In a week where Pennsylvania once again sidelined online gambling regulation, it is clear this is not a situation likely to change any time soon. Progress even at the state level seems painfully slow and the industry has given up betting on upcoming change to a large extent. With so many corporate giants who depend on the land-based casino industry it’s perhaps no surprise there is so much reluctance to embrace the online world.

But yet, there were no shortage of European egaming firms in attendance at this year’s G2E. And the reason for this was the increasing momentum building behind sports betting regulation in the US. The major US gaming association, the AGA, has made sports betting it’s major lobbying effort for the next few years and it seems to be getting traction at the state level.

There is still a long way to go but a recent report by Eilers & Krejcik Gaming stated a “significant market for regulated sports betting” is likely to emerge in “relatively short order” in the US with annual revenues of around $6bn, so it’s no surprise to see European firms wanting to get a piece of the American pie.

The US Invasion

Leading the charge will be the Scientific Games-owned NYX who were in attendance at G2E, but there were also stands from BetRadar, Betconstruct, SBTech and BetGenius while even Merkur was pushing its sports betting terminals on its stand. It wasn’t just the presence at stands that stood out either with executives from suppliers and operators seen walking the floors as they try and gauge how they can benefit from this potentially huge market.

Everyone in sports betting it seems is now looking for a “US strategy”. Many of these suppliers have been to G2E before, although SBTech was making its debut appearance ahead of a planned office opening in 2018, but there was a clear shift in marketing angle with sportsbook platforms pushed more prominently. What they are selling, however, is not really an online solution but modern digital platforms to cater for the expected land-based sports betting sector that will emerge.

Any regulation is expected at the state level and predominantly through existing land-based operators. At least at first. This is just the beginning of a long journey for the US sports betting market and there is likely to be a move towards mobile as the sector begins to take shape. And this is where the European experience with driving revenues through apps can be particularly impactful.

In Nevada there is already the ability to bet via mobile, albeit with a need to open an account at a land-based property first, so the concept is already proven. But the apps that exist in the market are, partly due to regulators issues, fairly rudimentary and some way behind those seen in the major European markets. What the industry would hope to see is some emerging markets embracing the types of products seen in the UK and revolutionizing the experience for the US punter.

The future of the US

To a large extent the New Jersey regulated market has done just this. It’s slowly moving towards a product set in online casino and poker, that is fit for purpose for the modern day and it is seeing that rewarded by revenue levels ahead of some of the more conservative estimates. It is learning and taking from the European online gambling sector and creating a market that is modern and able to compete with the black market.

And it is vital any emerging sports betting sector in the US does the same. There exists a huge online black market in the US and any operators looking to bring some of those marketing dollars on shore will need to do more than just open up shop some 50 miles from most of their target market. It needs to work with European operators, regulators and suppliers to create a modern market that recognizes the internet really does exist for gambling.

If it doesn’t, then you get the sense the US will miss out on a major opportunity . But then again, perhaps it’s happy with just making those cabinets bigger and brighter and keeping the world of gambling constrained in the bricks and mortar world. There is, after all, no shortage of money still to be made from all those TV screens and slot machines.