On Sunday mornings before the slate of NFL games start, bookmaker Jimmy Vaccaro likes to observe bettors queuing up at the South Point Casino’s sportsbook in Las Vegas. Many in line are new to sports gambling, and sometimes cause delays at the windows.
But Vaccaro, who has been setting odds for sporting events for more than 40 years on the Strip, doesn’t mind.
“What it shows is that there are more new people who want to bet their $50 or $100 on the (Las Vegas) Raiders or another team, have a beer with their husbands or wives or boyfriends or girlfriends,” Vaccaro said. “We’re creating new customers. In anything that you do, in any industry you have, you must keep adding on.”
South Point sportsbook operator Jimmy Vaccaro
While the COVID-19 pandemic has caused economic turmoil across the country, the gaming industry has managed to maintain a relative equilibrium because of increases gaming revenues from sports betting and igaming.
According to the American Gaming Association, the gaming industry’s overall 2020 gaming revenue of $24.16 billion through October reflects a 33.4% decrease from 2019. But sports betting revenue is up 39.1 % to $957.6 million, and igaming revenue has increased 206.2%, accounting for $1.23 billion.
Advances in technology, notably mobile sports betting apps and advanced payment methods, are boosting sports betting and igaming prospects.
“I’m a dinosaur,” Vaccaro says. “But I’m smart enough not to stick to the old ways. If you can’t see that there’s more promotions, can’t see that there’s more content, you might as well work at a Sunoco station.”
Traditional brick-and-mortar casinos, meanwhile, are struggling. According to the AGA COVID-19 Tracker, as of Dec. 18, the pandemic had closed roughly 120 commercial and tribal casinos in the U.S. due to state or local mandates. Back in March, nearly 1,000 commercial and tribal casinos in 43 states shuddered during the initial coronavirus outbreak.
The more than 870 casinos open to customers are operating at reduced capacity and with COVID-19 protocols and restrictions, including mandatory temperature checks and masks.
Marcus Yoder, senior vice president of sales at igaming software supplier GAN, said traditional casinos will face multiple challenges in 2021, including bringing back customers and “right-sizing” their gaming floors and employee counts.
“Land-based casinos hopefully have the opportunity now, across the next 18 months, to begin to re-open and gain back players and revenue,” Yoder said. “They face the challenge, then, of potential severe short-term memory and not assigning a leadership team to execute on a strong digital strategy that includes social casino and sportsbook offerings, and full online real money gaming. Yes, I mean you Nevada and California.”
Nevada legalized online poker in 2013, but not full online casino. The small population state currently has just one online poker website operated by Caesars Entertainment and its World Series of Poker subsidiary. California has not legalized Internet gaming despite numerous efforts in the past decade.
Changing the casino
One poker insider, Scott Long, publisher of Ante Up Poker magazine, said various casino games will be affected in different ways. Poker was among the last games that reopened at commercial and tribal casinos because of the close proximity of players at poker tables. Long is concerned that poker rooms might not be a priority for gaming companies.
A poker table with plexiglass dividers. A sign of the pandemic.
“Clearly the issue is how many of the rooms that are closed won’t be reopened,” Long said. “It might not have anything to do with COVID, it might be due to the economy and casinos deciding to use that space for other gaming. And that would be a concern for us.”
While slot machines accounted for almost 65% of U.S. casino gaming revenue – $5.87 billion of the $9.04 billion wagered by gamblers in the first nine months of 2020 – Long believes there’s hidden value in poker rooms.
While poker is a comparatively low revenue generator, casinos that track player movement realize that poker players do more than just play popular Texas hold ‘em.
“All kinds of players will have a good day at the poker table, then walk to the craps table and blow it all,” Long said. “That all goes back to the casino. And one of the stories I’ve always told general managers when I travel is that you may not care about my play as a poker player, but when my wife travels with me, she doesn’t play poker, she plays slots and roulette. And I promise you, you do care about her play. When your casino doesn’t have a poker room, you don’t get either of our play.”
Sportsbook changes
With the recent release of vaccines designed to combat the pandemic, casino operators are hoping patrons will return to brick-and-mortar casinos. Vaccaro says that the sports betting experience in Las Vegas will be enhanced once the Las Vegas Raiders will be able to play games in front of fans at the $1.9 billion Allegiant Stadium. The Raiders are playing their first season in Las Vegas without fans in attendance.
Shutterstock/Allegiant Stadium in Las Vegas
“Let’s say the (Pittsburgh) Steelers are playing the Raiders in October,” Vaccaro says. “A guy in East Pittsburgh will say to his wife, let’s go out to Vegas to watch the Steelers. How can you top that? You’ll come on a Wednesday and stay until Monday morning. It will be the biggest promotion that you’ve ever seen, and most of the promotion will come from people from out of town following their team to Las Vegas.”
Yoder anticipates new opportunities for gaming operators in 2021, with igaming, virtual sports, and simulated sports betting becoming attractive options for operators. He thinks that Pennsylvania and New Jersey have proven that “full online casino gaming does not detract from bricks and mortar business but enhances that business with an additional revenue stream.”
Beyond 2021, Yoder says it’s important to pay attention to market access deals that will begin to expire in five to 10 years. According to Yoder, a simplified definition of a market access deal is when big gaming brands “rent” the use of an operator’s license to provide an online real money gaming site and mobile apps for a large and guaranteed payment and a revenue share.
“What will happen when they expire? Yoder asked. “Will the land-based casino license owners shop the market access deal to a set of new bidders? Or will they have taken the time and energy to observe and learn from the experts on how to run a successful online gaming business, and decide to keep the value of the license all to themselves?”
Yoder also questioned if “the major gaming brands, some of whom are currently online only, offer to acquire their land-based casino partner where viable per tribal, federal, and state regulations?”
