Anyone fretting about sports betting’s traditionally low hold should ponder the Taylor Swift effect, suggests Justin J. Carter of Penn Entertainment.
“In and of itself, (sports betting) is not an extremely profitable venture,” Penn’s senior vice president of regional operations said last week at a Global Gaming Expo panel discussion focused on coming trends. But that narrow view could mask a greater attraction.
“Everyone’s chasing the white whale of the younger generation,” Carter said. As popular culture continues to intersect with sports, with the storyline of the music superstar and apparent beau Travis Kelce of the Kansas City Chiefs just one example, “sports betting is an amazing tool to create energy and excitement and to open up our venues to an entirely different segment of people.”
Carter spoke Oct. 10 at the annual panel discussion on “Looking at the Crystal Ball: The Future Gaming Landscape.” Andrew Burke, CEO of Bluberi, and Andrew S. Zarnett, managing director and head of gaming investment banking for Jefferies, also served on the panel. Michael Soll, a founding member of The Innovation Group team, moderated.
Zarnett said sports and sports betting are “dynamic” in Las Vegas and in regional markets that have found ways to use sporting events to attract customers. “The gaming industry has become much bigger than just slot machines and table games,” he added. Although media companies have signed deals with sports-betting and igaming companies, he does not foresee mergers between the two industries, which each preferring “to stay in their own lane.”
Burke said sports-betting products are still in an early phase, driving awareness of options such as betting online or in-game. “Companies are evolving their product offerings very quickly, and you’re getting a lot more options and real-time dynamic. As this business evolves, it is going to be all about the product in the long run. What’s going to make it sticky is that your product’s better than the others.”
Soll turned the discussion to Responsible Gaming, asking panelists how current RG efforts differ from those of five years ago.
Carter said operators are solid community partners whose business grows from the larger base of casual gamblers, not the small segment of people with an addiction. The big evolution is the emphasis on knowing the customer, he said. Now, the news of a big casino win is less likely to be about how much and more likely to focus on the person who lost.
Zarnett noted that the industry is mainstream and available throughout the country, rather than limited to a handful of states as it was 35 years ago. “We want to be self-regulated,” he said. “We don’t want to have third-party regulation like they do in the U.K. or Australia. And to do that, you need to stay on top of everything.”.
Burke said the industry needs to catch up to available technology in several areas, including slots, online space, and casino operations. He said the slot business, in many cases, is based on 25-year-old proprietary code. “When you try to attract somebody, they want to work on the newest, freshest technology because that is a transferable skill across the business. All across the industry, we really need to modernize. If you want a better influx of talent, we need to change.” Zarnett said the industry’s financial fundamentals “continue to be, quite frankly, spectacular.” He included MGM in that assessment, even with the recent hacking of MGM that stopped the online reservation system for some time. He cautioned that raising capital has become more difficult, the stock market is up and down, and debt market rates have increased.
Burke said business at regulated casinos could grow through the American Gaming Association’s encouragement of a crackdown on illegal slot machines. Between 500,000 and 600,000 illegal slots operate in the United States, he said, compared with about 1 million regulated machines. Carter agreed, saying operators of unregulated have no KYC protocols and are “a magnet for impropriety.”