Global Payments chief foresees rapid growth of cashless gaming in 2023

October 9, 2022 5:40 PM

Global Payments chief foresees rapid growth of cashless gaming in 2023

Photo: Global Payments
  • Mark Gruetze, CDC Gaming Reports
October 9, 2022 5:40 PM
  • Mark Gruetze, CDC Gaming Reports
  • United States
  • Suppliers

U.S. casinos will install a “huge number” of digital-payment systems next year, thanks to the success early adopters are enjoying, the president of Global Payments Gaming Solutions predicts.

“I think 2023 will be that year when we start to see really rapid adoption,” said Christopher Justice, whose company developed the VIP Mobility app, enabling casino patrons to make cashless payments for gaming and nongaming purchases. Recalling the rapid expansion of TITO technology for slot machines, he foresees multiple operators embracing digital payments, given the potential for additional revenue and other benefits that cashless provides.

Two factors have hindered more rapid widespread adoption of digital casino payments: the need for regulatory approval and the cost of adapting slot machines and table games to accept the payments. Some states with legalized gaming have not yet allowed cashless-gaming transactions.

According to Sightline Payments, another digital payment provider, casinos in just 10 of the 44 states with gaming offer cashless gaming transactions. On Oct. 6, Sightline announced it would spend up to $300 million over the next three years to adapt 250,000 slot machines across the United States for cashless gaming. The company said many casinos are using “outdated technology that is costly to upgrade” and compared the situation to the adoption of “smart” or “chip” credit and debit cards that allow contactless transactions at retail stores. Those were introduced in the United States in 2011; in 2019, more than one billion chip cards had been issued to U.S. consumers.

Justice said VIP Mobility leverages the TITO system by letting customers fund their in-person casino wagering with virtual or actual TITO tickets instead of cash. Members of Global Payments’ VIP Preferred network use the app to transfer funds instantaneously from their bank account to the VIP Mobility app. User who are not enrolled in VIP Preferred can scan vouchers into the app.

“It provides full end-to-end visibility and reconciliation for the casino,” Justice said. “Anytime there’s an issue, the casino has 100 percent control over it.”

VIP Mobility is active at casinos in Oklahoma and California, with other locations in the testing phase. Justice said he expects VIP Mobility to go live at more sites before April 2023. Because so many players do not use loyalty cards, it’s not possible to calculate what percentage have adopted VIP Mobility to some degree. But Justice offered two findings that indicate the popularity of cashless transactions once people use the process:

  • Roughly 50 percent of the funding done at the cage – check cashing, electronic bank transfers, cash advances, and the like – has moved to mobile.
  • Those who were funding at the cage and switched to VIP Mobility have a high likelihood of sticking with VIP Mobility has their funding source.

“We’re seeing a sizable shift to folks going down this path,” Justice said. “I think it’s driven by convenience and improved security.”

He also said 60 percent of people who downloaded the app used it at least twice; 40 percent become “power users,” meaning they used it at least five times. Power users have double the average spend of non-users, Justice said. That indicates they’re spending more of their gambling budget at a casino offering cashless gaming and reducing their play at other casinos, he added.

Another attribute of cashless gaming is the ability of customers to set daily, weekly, or monthly gambling limits for themselves and receive reminders about them. Global Payments was a founding partner of the UNLV Collaborative on Cashless Gaming’s Impact of Responsible Gaming. Justice said researchers are studying the types of data that cashless apps can provide to players and the most effective approach for alerting a player of potentially harmful behavior.

“The things that we can do technologically today are so much more advanced than what’s available today in that cash world,” he said. Still, operators should remember that cashless gaming is still near the beginning of its development.

“As an industry, we focus on the first thing to solve, which in our case is how to get more money into the ecosystem smoothly, efficiently, and easily, and how players get their money out all just as efficiently,” Justice said. “Then we can start to bring the customer along on a journey that delivers more value to the player as they are more involved with it.”

Mark Gruetze is a veteran journalist from suburban Pittsburgh who covers casino gaming issues and personalities.