AGA’s Miller: Gaming industry’s back on track, prospects for growth strong

AGA’s Miller: Gaming industry’s back on track, prospects for growth strong

  • Rege Behe
December 18, 2021 7:06 PM
  • Other

American Gaming Association President and CEO Bill Miller has spent the last few months taking the pulse of the gaming industry. He attended the Global Gaming Expo in Las Vegas, the Player Protection Summit in New York and the recent SBC Summit North America at the Meadowlands Exposition Center in New Jersey.

At all three events, Miller found palpable energy and enthusiasm among attendees and exhibitors, and an optimism that the gaming industry is back on track after its worst year ever in 2020. Proof of the gaming industry’s recovery from the pandemic-stricken year of 2020 can be found in this year’s revenue. The AGA’s most recent revenue report revealed that gaming revenue for 2021 total was already $44.15 billion by the end of October, surpassing the $43.65 billion generated in 2019.

“I think the gaming industry is coming back with vigor,” Miller said during an interview with CDC Gaming Reports. “What you’re seeing, whether at these summits or conferences, in and around the spaces, is there’s a lot of new activity going on, there’s a lot of expansion in different states and tribal jurisdictions. So not surprisingly, when there is a conference that deals with our industry, it’s going to be dynamic because there’s so much economic activity going on.”

During a wide-ranging interview, Miller answered questions about the gaming industry’s recovery from the pandemic, and what issues the AGA will track going forward.

Q: This year’s gaming revenue totals have been astounding. What were your expectations entering 2021?

Miller: “We had the worst year in the in the history of the industry with all casinos shut down in 2020, and so trying to gaze into the crystal ball and predict what the industry was going to look like in 2021 was certainly not easy to forecast. I will say that I was cautiously optimistic, but what we’ve seen is — and it just happened in the last couple of days — is that we now have surpassed even the best year in gaming history on the commercial side, which was 2019, in 2021. And so, I think that is something that surprised me.

“But the resilience wasn’t surprising because in 2020 all of our properties shuttered and then we turned them into testing facilities and then vaccination sites and then opened them with limited capacity.”

Q: It seems that one of the side effects of the COVID-19 pandemic is people are embracing opportunities to go out, and not just to gamble. Are there any other factors that led to record gaming revenue this year?

Miller: “It’s important to remember that 2019 was the best year in the industry’s history, so the trend absent COVID was continued growth. So, what we’re seeing is pent-up demand combined with continued strength in the industry, notwithstanding COVID.  Remember these numbers — and while we don’t have tribal numbers yet, we expect them to be very similar — but these numbers are without international visitation and a very slight impact from business travel and business conferences and trade shows.”

Q: Was there any single development in gaming that surprised you this year? Something unexpected (besides revenue) that you didn’t anticipate?

Miller: “The thing that surprised me most was how quickly the industry came back, how strongly it came back. I was optimistic but you just don’t know — none of us that are alive today lived through the great pandemic of 1918. No one knows what it’s like to shutter entire economies and then reopen them up sector by sector, and in essence, that’s kind of what happened.”

Miller added that labor shortages and supply issues were mildly surprising, but in retrospect, understandable.

Q: Do you think the gaming industry is better equipped to attract labor than say, the fast-food industry or retail in that gaming operators tend to offer better working environments, wages and benefits than other sectors?

Miller: “I think the gaming industry has consistently shown that it is a good community partner in the economies in which we operate. We are a good employer, we are a good partner in our communities. I think that our wages in the entry level, as well as all the way through the corporate ladder, are more than competitive with other industries and other companies.”

Q: Responsible gaming was one of this year’s buzzwords, especially in relation to the increase of sports betting and igaming. Do you think most operators understand the importance of responsible gaming programs such as Have a Game Plan. Bet Responsibly?

Miller: I do. I think that responsibility is part of our social license to operate. When we are granted a license by a state jurisdiction there is an expectation that we will act in a manner consistent with the license that we’re given. I think it’s core to the fabric of gaming operators and why it’s so important for us to get sports betting right, because it’s a new industry vertical that includes a lot of new business partners, if you will. Each team has arenas and broadcasters, all of whom certainly understand the financial opportunities attended to sports betting, but are not conversant in areas of responsibility in the same way that we are because of the method in which we are granted the opportunity to work in a state. It is really important for us to lead.”

Q: With new markets emerging in sports betting, the regulatory landscape is increasingly diverse and probably nettlesome to many gaming operators. Do you think a national regulatory system for sports betting will ever be considered?

Miller: “I don’t think so. I think that there are 4,000 plus regulators who are in charge of regulating and ensuring that the public is protected, and the operators act according to their license or charter. The federal government would not be additive in that dynamic.

“I think the best example of why the federal government shouldn’t be in the gaming business is the fact that for the last 25 plus years, the only place you could legally bet on sports was Nevada. PASPA was the last major federal intrusion into the industry and what that did was drive sports bettors into the illegal marketplaces. My view is that the states and the state regulatory structures and the state legislatures have got it right. As sports betting continues to grow across the country, the likelihood, and more importantly the need for a federal framework or federal legislation, becomes less and less.”

Q: Sports betting particularly has captured the public’s attention, with ads featuring former athletes and other celebrities on almost every sporting event broadcast. Two questions: Is there a danger of oversaturating the market with the constant onslaught of ads?

Miller: “Is advertising going wild in the sports betting space? Maybe a little, but you have to remember what we’re doing here. We have legalized a business that has been previously illegal and prevalent. We are migrating entire populations from corner bookies and offshore illegal websites, which offer no protections for the consumer, no tax revenue for the state, and no insight into the integrity of the contests. That advertising is moving that population, region by region as these new regions come online, to the legal marketplace. And fundamentally that’s a very, very good thing.

“Is there is it too much (sports betting advertising)? I think ultimately the question will be answered by the stakeholders that have interest in the companies that are advertising because they are in a customer acquisition mode using advertising as a principal driver for that. As those markets become more fulsome, then you’ll begin to see the advertising decline. In fact, since the third week of this NFL season, advertising in the sports betting markets has declined in almost every market. So, we’re already starting to see a rationalization of the interested operators who recognize that if it continues to cost more and more money to acquire each new customer, then they’re going to begin to make more rational decisions around advertising.”

Q: How do you address kids in regards to sports betting advertising? Many kids look up the Mannings, Drew Brees, and other stars acting as brand ambassadors.

Miller: “We have a responsible sports marketing and wagering code of conduct and it speaks to the issues around targeting, ensuring that that our members don’t target towards youth audiences and have higher awareness around ensuring that education is done for problem gamblers’ audiences. I’ve got two little kids, eight- and six-year-olds, and they notice the sports betting ads. We have conversations about it in my house and we tell them sports betting is for adults. I think that the marketing that we have is appropriate because it markets to adults.”

Q: During her appearance at the SBC Summit, Caesars Entertainment Board Member Jan Jones Blackhurst  commented on the lack of women in management positions, saying “If you go back three years ago, you could say there wasn’t a pool of high-quality women. But that’s not the case anymore.” You spoke about diversity and its benefits during your appearance at the SBC Summit. Does the AGA have a responsibility to advocate for women and diversity in gaming?

Miller: “Absolutely. As the principal voice of the industry, we have a responsibility to tell the stories of the industry, and internally as an association, we have a responsibility to help our members develop better practices as it relates to you know hiring women and minorities… I think we have a good track record of hiring diverse workforces, but we have a lot of work to do. It is a priority for the American Gaming Association to drive these conversations within the membership.”

Rege Behe is lead contributor to CDC Gaming Reports. He can be reached at rbehe@cdcgaming.com. Please follow @RegeBehe_exPTR on Twitter.