Two technology-company executives said they expect cashless gaming to accelerate over the next three to five years after getting off to a slow start.
Cashless gaming and digital wallet’s future and obstacles were the focus of a panel discussion Tuesday at the TribalNet Conference & Tradeshow in Las Vegas.
Most of the operators offering cashless gaming seem to be very happy with it, but the people who haven’t rolled it out raise objections about what cashless will do to their ATM revenue, according to Noah Acres, who leads marketing and product design for Acres Manufacturing.
Casinos are also worried about the cost of implementing cashless on the casino floor, whether their players will like it, how soon it can occur, and how long for a return on investment.
“Cashless is going to explode,” Acres said. “It will hit this critical mass where everybody feels like they need to have it. The casino industry has become a me-too industry. As a technology developer, we try to push our tech to casinos all the time and the first question they ask is, where is this working out well and who’s doing it? Somebody has to go first and you’re waiting for that person. As soon as that happens, it will be easy to continue to roll out cashless.”
Acres said tribes will take a leadership role in introducing cashless sooner than some of the big corporate operators. Penn Entertainment has been an exception, with cashless at most of its properties in the United States, he said.
“If you look at the other large operators, a lot of tribes and independent casinos are waiting to see bigger companies make a move first, but a lot of these companies are focused on sports betting and igaming and they’re trying to answer those problems,” Acres said. “There’s a political element to it too. When you’re operating casinos in a multitude of states and platforms, some of the decisions you make on the land-based side could affect you on the online side. The larger regional and international operators are slower and more careful in making this cashless decision, whereas tribes and independent casinos can be more autonomous and make the right decisions for them.”
Mark Hemmerle, chief legal officer for KOIN, said one of the problems with wider adoption has been the “rough experience for the industry” when Resorts World Las Vegas opened to a ballyhooed cashless experience in 2021. All the components that needed to be in place weren’t aligned. A seamless and easy registration and the use of cashless in the casino and all the resort’s venues are needed.
“We’re getting past those problems at this point,” Hemmerle said. “There’s definitely been an improvement from the post-Resorts World opportunity. It’s a matter of the property’s objective. Is it just to get the credit meter on the casino floor? Or is it also to provide a broader experience for the player to utilize the funds throughout the resort and keep the money in the ecosystem of the operator? Once you make that kind of determination, it helps to determine what you want to do and how you want to do it. A lot of properties are trying to figure that piece out and that’s slowing things down.”
Hemmerle said this isn’t an ROI situation, like when the industry went to TITO and got rid of hard-count machines and the whole list of coin issues. Cash isn’t going away, but there will be incremental cost savings. “What we really need to look at is the incremental increase in revenue.”
Tribes are much more amenable to the regulatory environment, which will help them adopt cashless sooner than the commercial industry, panelists said.
Antonio Perez, general manager of the Rolling Hills Casino in northern California, said they officially rolled out their digital wallet in August after beta testing for a year.
Several casinos in his region are in the process of implementing digital wallets, Perez said. Having spent the majority of his career in the commercial landscape, Perez said he knows that the ROI conversation comes back into play.
“You have to do what’s right for your shareholders, whereas in tribal gaming, it’s about building a sustainable business to support generations,” Perez said. “Often, those decisions are made less on the immediate ROI and more on the long-term benefits, so that’s why we’ll continue to see the tribes outpace commercial.”
Perez noted that early in the cashless process, there were a lot of negative stories in the media. Releasing a product that provides a bad experience by not working properly and making people concerned about their banking information will halt its use and they won’t come back.
There are other hurdles to overcome when it comes to tribes, Perez added. A lot of CFOs’ concerns is losing out on ATM fees, a significant revenue generator for most properties.
“When rolled out at Rolling Hills, one of the steps we took was waving the fees inside the mobile wallet initially for transactions to incentivize them to bypass ATMs,” Perez said. “I’m doing that to monitor the activity of the players on the wallet, to see if their incremental play is higher on the missed revenue I would have gotten from them on the ATM. So far, that has been the case. The next step is to raise the ATM fees and have a campaign to get the digital wallet, so you can bypass those ATM fees and look for creative ways to drive that user adoption.”
Hemmerle said what’s eventually going to help drive cashless in commercial gaming is online sports betting. Those platforms will need to figure out a way to create cross-utilization of those accounts, in part to lower churn in their costs, but also to get online players into brick-and-mortar casinos where they use the same wallet and account.
“There’s a lot of opportunity,” Hemmerle said. “Most Mexican casinos are cashless. South Africa is cashless. It’s not impossible. It’s just getting the mindset of your players to move in that direction.”
Acres said the way the machines are set up in the casino, the casino management system has sole ownership of the credit meter on the slot machine. That’s been a roadblock for casinos wanting to go cashless, because the casino management system platform hasn’t offered cashless gaming or the way it’s offered may not be what the operation wants.
“There are other solutions out there, such as going through the bill validator,” Acres said. “We bypass the system so the casino can do cashless without having to upgrade the system. You need something inside the machine that interfaces the cashless wallet to the credit meter. That’s why it’s tough.”
Hemmerle contends wallet operators can’t be focused on just gaming. It has to be tied into the broader point of sale system within the resort, so they can monitor those transactions, do closed loops, and create savings for the operator.
Acres said players need a reason to use cashless. “We have to make a pretty dramatic turn in how we make the experience more fun and how you make people that aren’t playing cashless have more fun,” Acres said. “Cashless is a great way to migrate people over to the app and send offers. That’s going to make the app more fun and allow for more promotions on the app. Operators should be looking at cashless as a new way to engage players and provide them entertainment and not just a new way of accepting money.”
