The casino industry’s experimentation with new forms of gaming may not be advancing as quickly some have hoped, but the fault doesn’t lie with regulators being obstinate in their approach to new games, a panel emphasized Monday morning at G2E.
Instead of putting the blame on regulators for refusing to allow rubber stamp innovation, game manufacturers and operators need to take a more introspective and strategic approach toward experimental forms of gaming, like skill-based and e-sports tournaments, the panel said. This is particularly true if these aren’t living up to expectations or generating the same level of revenue as traditional slot machines.
“Quite frankly, (regarding) any lack of innovation on the floor, certainly we cannot point fingers at regulators and we need to point fingers at ourselves. I have found here in Nevada, from the governor down to the regulators, [authorities] could not be any more collaborative and supportive of innovation,” said Seth Schorr, chairman of the Downtown Grand in Las Vegas.
New Jersey has also been highly receptive to new games, explained George Rover, a former New Jersey regulator who stepped down from that post in November 2016. He emphasized that the state’s Division of Gaming Enforcement has taken a ‘Wild West’ approach to new and experimental games by introducing general regulations that encourages companies to bring whatever product or idea they had into the lab, adding that the agency “would figure it out as we went along.”
This framework is the opposite from the agency’s normal ethos of applying stringent regulation to new products entering its jurisdiction.
“I really do think there’s been a shift,” Rover said. “Most regulators understand that strict constriction and saying ‘no’ just doesn’t work anymore. I’ve seen it in New Jersey and I’ve seen it elsewhere.”
As regulatory gridlock is not the issue, the panel emphasized, the ball is effectively in the courts of manufacturers and operators to create games that customers will want to play, and to figure out how best to market those games on the casino floor.
Because these machines might not produce the same revenue figures as legacy games currently on their floors, casino operators are easily tempted to pull them prematurely and leave the experimentation to others.
Schorr noted that because the business and revenue models for these games can be unclear, “a lot of operators would prefer to keep things the way they are today and let others figure out what to do next.”
The Downtown Grand has pioneered the hosting of e-sports tournaments on its premises. While these tournaments don’t involve wagering, Schorr said that they are part of a broader strategy of getting the Nevada Gaming Control Board comfortable with the concept – something which he says should be emulated across the industry.
“It’s a long term play, and it’s the opposite with daily fantasy. They did everything they shouldn’t have done – a political and PR nightmare,” he said. “So this is about understanding long-term strategy and how, as an industry, the operator and the regulator can work hand-in-hand for long term growth.”
