While cashless gaming is new to American casinos, it’s old hat to the co-founders of Flexia Payments.
CEO Craig Libson and President Scott Walker first developed a cashless system about five years ago, and it now has more than 50 casinos under contract in Mexico, where anti-money laundering laws require casino transactions to be electronic.
“[Mexican casinos] were already a cashless environment before anybody in the U.S. heard about the word cashless,” Libson said. Initially, casinos relied on a cumbersome funding and cash-out process. Players had to deposit cash at the casino cage, and the amount was added to their players club card, which they used for slots and other games. To cash out, players had to return to the cage and present their card again.
The duo’s Card2Go system streamlined that. With one quick visit to the cage, a customer’s identification information is transferred from the players club card to a Card2Go card, which provides both a gaming account and a Mastercard account. A smartphone app allows customers to move money instantaneously from one to another.
Las Vegas-based Flexia, formed in January 2021, is launching an updated cashless system for American casinos. Flexia is a subsidiary of MVB Bank, which Libson said holds a substantial portion of the money on U.S. sports-betting sites such as FanDuel and DraftKings. Because U.S. fintech and gaming laws are much stricter than Mexico’s, he explained, “the idea of having the bank that is dominant in the gaming industry was really beneficial.”
The two said their affiliation with an FDIC-regulated institution and their experience with Card2Go make Flexia’s cashless approach stand out from others. “Even though people may not have heard of us, there’s more behind the curtain,” Libson said, listing several key attributes, including:
- Flexibility for each operator. In one case, a Mexican casino wanted to tie awards for non-casino Mastercard purchases to the user’s player club level – two points per peso at one level, one-for-one in another. Card2Go did that. Libson said the Flexia system and app can handle a variety of integrations, including the casino management platform, the loyalty platform, and whether online operations need a separate wallet from one for traditional casino wagering. Walker added that the app can hold many separate wallets, allowing customers to use it at multiple locations.
- Working with casino marketing as well as with technology and financial representatives. Flexia can push promotions based on demographics, including how much and where customers spend money from their Mastercard account.
- A streamlined onboarding experience for customers. As a card program manager, Flexia must fulfill its own KYC and AML requirements, which it can coordinate with those for the casinos. Libson said he recently spent 45 minutes registering for a cashless account at a Nevada casino, with a hostess having to walk him through each step. “I don’t think the market has yet seen another solution that’s seamless enough to really promote it and make it as easy to use as it should be,” he added.
Walker and Libson met in the early 1980s while attending Brooklyn Law School but took separate paths before teaming up on Card2Go. Walker worked in investment banking before becoming CEO of VirtGame, which in 2000 became the first company to get Nevada Gaming Control Board approval to provide an online sports-betting system. He also reopened and managed a casino that had been taken over by Deutsche Bank. Libson has designed money transfer platforms adopted by Visa and Mastercard and multiple prepaid programs.
“The overriding beauty of cashless is that it’s as helpful to the operators as it is to the customer,” Libson said. “It’s a product that should happen because it benefits everybody (with) security, convenience, marketing, data, liquidity, all of that.”
Pointing to consumers’ rapid acceptance of using phones for purchases in many businesses, especially since the COVID pandemic, Walker predicted that cashless transactions could become the dominant form of payment in American casinos in two years.
Libson thinks the conversion could happen even quicker “as we further penetrate the market.”
“Years ago, we had to explain to people what cashless was, we had to identify why operators would want to do this. Now the market has totally shifted, and operators know they need to do it,” he said. “It’s a matter of making it happen in the right way. The market is quickly realizing the benefits of going cashless and what Flexia has to offer.”