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IN-DEPTH 1 August 2018
AGA on shaping the sports betting future
The American Gaming Association has been one of the chief advocates for legalised sports betting in the US since day one of the New Jersey appeal. Casey Clark, AGA Vice President of Strategic Communications, shares the AGA’s perspectives on this industry-changing decision
By Gambling Insider

What’s the biggest challenge in being an industry association covering a country like the US?

The AGA represents the $261bn US casino industry, which supports 1.8 million jobs in 40 states, promoting the many benefits our members bring to communities, and protecting the industry from bad public policy and antiquated perceptions.

Our membership includes the entirety of the diverse gaming industry commercial and tribal casino operators, and industry suppliers and our role is to engage on issues where we have consensus and remain neutral when we don’t. With a large and growing membership, we have to work even harder to maintain this position.

Why did the AGA choose to back a repeal of PASPA? Was there a gradual process or an immediate decision?

PASPA was an abject failure. It stripped states and sovereign tribal nations of their rights to legislate and regulate, and not only did it curb sports betting, it enabled a massive illegal market. Sports betting in the United States has been happening since PASPA became law in 1992, it just hasn’t been happening without the protections of a legal regulated market.

The AGA’s Sports Betting Task Force was created in April 2015, with the support of the Board and based on a recommendation from our Public Policy Committee. Our Board later adopted the consensus opinion that PASPA should be repealed in November of that same year.

We supported our call for PASPA’s repeal through a two-pronged approach – in Congress and in the Courts, while diligently working to bring attention to the illegal market.

Was the Supreme Court’s decision a surprise or did you expect this to happen?

The gaming industry was prepared for any of the ruling scenarios that came from the Supreme Court, but we were optimistic when the high court took the case based on how few of these cases they consider, and because New Jersey had lost in each of the appellate courts proceeding it.

Does the AGA favour federal action on sports betting or leaving the choice up to individual states?

The AGA recently released our priorities for successful sports betting markets in the United States – the first priority is to empower state legislatures and sovereign tribal governments.

These entities have proven to be effective regulators of gaming for decades. Federal action to regulate sports betting failed for the past 26 years. The decision by the Supreme Court now makes it possible for states and sovereign tribal nations to give Americans what they want: an open and transparent market for sports betting, while also giving specific constituencies opportunities to decide what works best for them.

We have a successful model in Nevada, where legal and regulated sports betting has benefited stakeholders, protected consumers and the integrity of the games, and bolstered its economy.

Among the other priorities for the AGA are placing the welfare of consumers at the top of the agenda by promoting responsible gaming and responsible advertising, encouraging the use of contracts between sporting bodies and their gaming industry counterparts and strengthening game integrity by rigorous sports betting regulation.

Following the Supreme Court's decision to back the New Jersey appeal, in what ways will the AGA’s role shift to accommodate this and in what areas?

Our role is to be a proactive partner and resource so every state that chooses to legalise sports betting does so in a way that protects the integrity of games, protects consumers and maximises economic benefits across their jurisdiction.

The AGA and the gaming industry will work with all stakeholders – states, tribes, sports leagues and law enforcement entities - who share our commitment to eliminating the vast illegal gaming market.

Do you believe that illegal bookmaking will continue to play a part in the US sports industry post the Supreme Court decision?

The AGA has consistently advocated for sound policies that eliminate the illegal market, any efforts that do not share this goal are not helpful to consumers or other stakeholders. As states and sovereign tribal nations consider sports betting proposals, they should be mindful of creating a market that is competitive with the illegal market, otherwise we’ll have legal sports betting in name only.

The American Sports Betting Coalition will continue to be a resource as states move to legalise sports betting and establish regulatory frameworks that enable legal sports betting markets to thrive.

Do you believe the American Sports Association’s calls for a 1% integrity fee are justified? If not, why not?

The AGA is in alignment with stakeholders in support of regulated sports wagering and eliminating the illegal market.

Sports betting is a relatively low margin business. A 1% fee of handle isn’t really one percent that number ends up being closer to 20-30% of a sports book’s revenue, which would impact its already slim margins and prevent legal books from offering odds that could compete with illegal books. Ultimately, this would defeat the purpose of having legal markets in the first place. Nevada’s model is a great example of a successful state sports betting market that maintains the integrity of the games.

What lessons can the AGA learn from sports betting adoption and the role of regulators in Europe that can be translated into a potential US roll out?

European markets are incredibly transparent, with clear regulation and clearly defined roles from regulatory bodies, which would readily translate to a legal sports betting market in the United States. ESSA in the United Kingdom has been effectively regulating sports betting for years and is a model for asuccessful regulatory third-party for states and tribal sovereign nations.

Do you believe that tribal operators should be allowed to offer sports betting as part of their compact agreements with states?

The AGA believes that sovereign tribal nations should be empowered to offer sports betting so the economic benefits can be realised by all.

Do you see a point in the future when sports betting will be adopted across the entirety of the US? What determines this timeline?

There is already a large appetite for sports betting. Already this year, 18 state legislatures have introduced or passed sports betting legislation. Four states: West Virginia, Pennsylvania, Mississippi and New York have passed bills, legalising sports betting in the event PASPA was struck down. States have been anticipating the outcome of this ruling and as these first movers begin reaping the associated economic benefits, a large number of states will follow suit.

As we all know, sports betting has been occurring in the United States for a long time. Now that states have the option to legalise it, we believe they will jump at the chance. Taking sports betting out of the shadows and making it open and transparent will give law enforcement, regulators and sports leagues new tools to protect the integrity of competitions, and shut down costly illegal gambling rackets.

The gaming landscape has changed dramatically since the now-overturned ban on betting was passed in 1992. Casino gaming is now in 40 states, and sports leagues understand that wagering and game integrity can go hand-in-hand.

Does the AGA believe that sports betting should initially be restricted to professional sporting events before any betting on collegiate events is allowed as a way of avoiding corruption of US sports at a grassroots level?

The states have the opportunity to decide how to regulate their own individual markets, should they choose to legalise sports betting.

Through smart, efficient regulation, we can enable betting markets that protect consumers, preserves the integrity of the game, empower law enforcement to flight illegal gambling and generate new revenues for states, sports leagues and broadcasters. A legal, regulated sports betting market would also serve to protect amateur athletes, who remain the most vulnerable if sports betting continues to go unregulated.

What lessons can the AGA learn from the adoption of daily fantasy sports in the US over the last five years which can be translated into a working roll out plan for sports betting in the US?

When the Nevada Gaming Control Board (NGCB) issued a notice to Nevada gaming licensees about the legality of daily fantasy sports, we applauded the clarity it provided to help eliminate any legal ambiguity.

Daily Fantasy Sports has in many ways proved what we’ve known for a long time: fan engagement increases when they are somehow invested in the outcome. This will be good for leagues who have had increasing challenges with fan avidity and participation, broadcasters who need eyeballs on their content, sponsors and advertisers who clamor for the same level of consumer engagement and gaming operators who will soon be able to offer a legal way for fans to do what they’ve been doing for decades in the shadows: bet on games.

The casino gaming industry is dedicated to building the world’s most secure and successful sports betting system. The AGA will pursue policies that empower state regulation, place consumers first, strengthen game integrity, promote responsible gaming and responsible advertising and encourage contracts over statutes.

Are there any ways that the AGA can use betting on the forthcoming FIFA World Cup as a guideline of how to run legalised sports betting on the Super Bowl or March Madness? How do you see this playing out? We’ll be very interested in monitoring this process, but ultimately, our role is to be a resource and an advocate for our members and for any state or sovereign tribal nation that chooses to legalise sports betting. Hopefully, by the time the next Super Bowl and March Madness roll around, Americans won’t be betting billions of dollars illegally anymore – they’ll have an opportunity to do so in a regulated, legal market.
IN-DEPTH 4 September 2019
Virtual reality: Creating next-gen experiences for players

Singular CEO George Shamugia discusses a new revenue stream for casino operators

The competition in online gaming is intensifying, with players becoming more and more demanding. In some markets, single-customer acquisition costs can reach up to €400 ($440) alongside growing churn rates. Furthermore, the online gaming sector struggles to attract one of the most lucrative groups of players – millennials. The experience provided by casinos no longer appeals to the younger generation.

On  the other hand, the video gaming industry perfectly understands the needs of millennials and by introducing elements of luck in their games offers the best of both worlds. With the launch of loot box systems and Grand Theft Auto’s in-game casino, we have seen their first successful steps in targeting the online gaming sector. GTA V online, with 33 million active players, recently opened an in-game casino, where players gamble real money on games such as poker, roulette, slots, etc. As a result, churn users returned and GTA Online reached the highest number of active players since its launch in 2013.

The online gaming industry has almost fully utilised the potential of the mobile medium. The time has come to look for new, innovative ways of delivering a next-gen experience to customers.

The potential of VR

Could the next big thing for online gaming be a fully fledged virtual reality (VR) casino delivering an immersive experience and limitless new opportunities?

Although not widely adopted yet, VR has a sizable number of customers. Analysts predict it’s poised for explosive growth to become mainstream in about five years. According to market intelligence firms, the VR market will be worth $117bn by 2022, and according to Juniper Research bets made through VR will reach $520 billion by 2021. Upcoming 5G mobile network technology will propel VR’s mass adoption by allowing the development of fully portable untethered and affordable VR headsets.

Different level of social interaction

The captivating nature of gambling comes from its social aspect. Unfortunately, personal interaction is widely missing from online gambling sites. VR technology creates multiple opportunities to bring back and even enhance that social moment. The ability to connect with other players is one of the main reasons behind Fortnite’s popularity. This form of co-experience is the next generation of entertainment. Research conducted by Facebook has found participants spend more time on VR compared to any other medium. This directly translates into increased profits for casinos.

Pokerstars has made efforts in this direction by implementing Voice UI. Instead of using hand controllers to make a call, pass, or raise, players give voice commands.

Another opportunity for bringing in the social element are the players’ avatars. They enable players to build their identity reflected in the avatars’ appearance, but also the avatar's social, competitive and community status. For instance, players are willing to pay real money for virtual drinks at the bar. Operators can offer these social touchpoints for free to VIP customers as an act of appreciation.

VR also brings a new dimension to customer support. Customer support can also be represented with avatars to assist the player in person. The social moment increases the LTV of players and contributes towards lower churn rates.

Rethinking game design

VR is a way more capable medium than a 2D mobile or desktop screen. Instead of copying the existing online experience, games must be redesigned from the ground up for a competitive advantage with VR. For example, a VR slot game can become fully immersive by teleporting the user into the slots’ world of Ancient Egypt. Next, enrich the experience with high-fidelity graphics, realistic spatial sounds and animations. When betting on virtual race cars, the user can be teleported inside the car he/she made a bet on and experience the race firsthand.

New revenue streams

VR casino lobbies create new revenue stream opportunities: ad placement of brands on the venue walls, company logos decorating the bar etc. This kind of branding is not intrusive in the VR space and feels natural from the user's perspective. VR also gives users the ability to change venues from a Las Vegas casino today, to Macau or even Mars casino, the very next day. The dynamic and diverse experience increases retention rates.

The majority of profits for online gaming operators come from their high-roller players. Although they represent a small subset of active players, an operator can launch a separate VR casino brand for them. Providing exclusive VR gaming experiences to high rollers/VIPs, the operator can minimise churn and maximise VR efforts for these player demographics.

The catch with VR is to focus on quality, rather than scale. The target audience might be limited yet, once these players experience it, they will become ambassadors for your offering.

Surely, the opportunities and possibilities offered by the VR medium truly exceed anything offered by mobile and desktop. VR is a new frontier not just for gaming but for every industry, and it’s exciting to see where it takes the industry and what kind of innovation it brings upon us.