Executive: Casino industry far more open to digital payments and cashless gaming

December 7, 2020 12:33 PM
  • Howard Stutz, CDC Gaming Reports
December 7, 2020 12:33 PM
  • Howard Stutz, CDC Gaming Reports

Cashless gaming is no longer just a topic of discussion.

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Chris Justice, who oversees the gaming division for Georgia-based Global Payments, admits that the casino portion of the cashless transaction and payment processing business is still a relatively small slice of the overall pie.

But the gaming industry, he said, is rapidly becoming far more open to the idea of digital financial transactions.

Downstream Casino, Oklahoma/JCJ Architecture

During an investors call hosted by Truist Securities last week, Justice said Global Payments’ initial installation of a mobile wallet inside the Downstream Casino in Quapaw, Oklahoma this summer is quickly gaining users. Justice told Truist Securities gaming analyst Barry Jonas the company is seeing “meaningful funding growth and player adoption” at the tribal casino.

In a research note following the call, Jonas said it was too early to comprehensively measure any market upside with the mobile wallet, which allows customers to fund electronic gaming play throughout the casino.

“Like most vendors, Global Payments is hesitant to quantify the total addressable market or general upside from cashless,” Jonas wrote. “Mr. Justice noted he expects cashless will increase the size of the pie with any cannibalization of traditional kiosk/cage transactions more than offset by increased play levels and operational efficiencies.”

The American Gaming Association has advocated since 2019 for the casino industry to adopt cashless or digital payment solutions to help modernize the industry. In the past year, spurred on by the COVID-19 pandemic, several changes have already taken place.

Last week, Southern California’s Morongo Casino and Resort said it would introduce a new cashless wagering product early next year that will provide slot players with gambling markers. The platform, which runs through Morongo’s casino management system, is not a mobile wallet, since the funds rely on credit provided by the property.

Developed by Las Vegas-based Marker Trax, the technology is the first to utilize markers, rather than a customer’s debit card, to fund gaming activity.

Las Vegas-based Everi Holdings said Oklahoma’s WinStar World Casino Resort would be the first property to utilize its digital wallet platform, which allows customers to both fund electronic gaming play and pay for non-gaming amenities, including retail, food and beverage, and golf.

Justice told the Truist audience that the Downstream Casino, which is operated by the Quapaw Nation, has seen double-digit increases in total transaction value (dollars in-play) compared to pre-COVID traditional cash access levels. For patrons who have used the cashless app more than five times, Global Payments has seen triple-digit increases in cash funding.

“Mr. Justice did not offer a view on what percentage of cash transaction could shift to digital as many factors could influence the adoption, but interestingly did note that he expected strong and quick adoption,” Jonas wrote.

Justice said the expectation is that Global Payments will go live with cashless gaming in several commercial and tribal jurisdictions throughout 2021.

Jonas cited several benefits of cashless gaming, including how the platforms address cleanliness and health concerns brought about by COVID-19. He said digital payments can lead to increased gaming revenues from an “additional funding mechanism with less friction (and) greater speed,” which also allows players more time on a device.

In June, the AGA announced a framework for allowing digital payments on casino floors, citing a study that found a majority of casino customers want the option to use cashless or digital technology for gaming.

Though the COVID-19 pandemic spurred a renewed interest in cashless gaming, the AGA has been leading a nearly two-year collaborative industry-wide effort to come up with a structure that covers eight principles for modernizing casino payments nationwide.

Regulators in Nevada and Pennsylvania this year approved new rules to permit digital payments in their casinos, and New Jersey, Indiana, and Iowa are expected to follow suit. Tribal casinos, such as Seminole Hard Rock in Florida and Southern California’s San Manuel, are already using digital payment technologies.

Jonas told investors cashless could drive more than just gaming revenues. Digital wallets can be integrated across gaming (land-based and online igaming/sports betting), as well as bars and restaurants and other non-gaming amenities.

“An integrated, resort-wide mobile funding solution (is) easy for the patron to use,” he said.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.