Casino customers have been slow to adopt cashless gaming, which reflects player experiences less and regulations more, according to a gaming executive, speaking on Tuesday at the TribalNet technology conference in San Diego.
During a panel discussion on what’s new in gaming- system technology management, Karthick Raman, global vice president of product management with Aristocrat, said cashless gaming has an important future. Just like it has in other industries that use it, cashless will increase spending by customers. Some 55% of overall transactions in the U.S. in 2022 were digital, he said.
“We’re seeing that trend in the industry, but we don’t see it in the casino,” Raman said. “There’s a reason for it. Everybody is looking for solutions, but none of the solutions are good. We’re working on a solution too, but it still needs improvement.”
Raman said the reason for the low adoption rate in casinos is that most of the systems “weren’t built on understanding the player experience,” but instead on regulations and requirements of regulators.
“So most of the implementation is confusing and clunky. We’re now taking a step back on how to build it that addresses those issues and we’re in the process of building one that’s player-centric, agnostic, and universal.”
Ramya Pulipati, senior director of product management and global gaming systems for IGT, said her company has been at the forefront of bringing cashless technology to the market and a lot of education still needs to happen.
“We’re open to meeting with regulators and educating them on how the flow actually happens,” Pulipati said. “Everyone needs to be open as well to adopt the newer technologies. There are a lot of interesting metrics to cashless. Forty-one percent of Americans don’t use cash in a week. That’s a powerful metric. We don’t use cash, except when it comes to gaming. It’s a mindset shift. As technology providers, with the support of operators, we can talk to regulatory bodies and educate them on how processes happen. Coming to the cloud, there are lots of questions about data sovereignty and where does the data actually live. That’s the mindset shift, because we’ve always kept data locked up somewhere. This is a huge shift and it’s time for us to open our eyes and educate everyone about what’s out there and the advantages of adopting technology.”
In another panel devoted to cashless gaming, Christopher Justice, CEO of Pavilion Payments, formerly known as Global Payments Services, said he wouldn’t characterize any regulations faced by tribal gaming as “a hurdle,” instead calling it an “evolutionary process” that requires evaluation.
Whether it’s the local tribal gaming agency, the commercial jurisdictions, or the state, they’re all trying to understand how the many puzzle pieces fit together, ensuring solid game integrity and compliance across the various components, such as money in and out, customer disputes, and internal controls, and effectively interoperating with these new types of mechanisms.
“Overall, we’re in a good evaluation position, but I also think this is the wave of the future. These types of technologies, such as cashless and self-service, are where each and every one of us, no matter where we’re shopping, has been going since Apple came out with the iPhone in 2007,” Justice said. “You look at the guests and the types of things they expect when they go to the casino and they’re not getting it, because we as an industry haven’t really evolved like retail and restaurants. We’re doing things the way we’ve done them for decades. Overall, the guest experience is exactly where it was. I think our industry is ripe for disruption. We have to embrace what our guests are looking for, which means looking at trends and business models that will help us increase operating efficiencies and deliver a much better guest experience. It’s the wave of the future and once we get by this evaluation stage, we’ll be locked and loaded.”
Andrew Crowe, senior vice president of investor relations and growth initiatives with Sightline Payments, said this is an opportunity to help regulators understand the new technology that’s in use in other industries across the world. The conversations with regulators should come early in the process and they should be educational.
“It’s likely that your regs may need to be updated or changed and it’s possible they won’t prohibit what you’re doing, but they may not contemplate it or understand it,” Crowe said. “Without that early engagement and education, they can’t be at fault for how the regs should be crafted.”
Victor Newsome, senior vice president of payment solutions for Everi, said regulators are part of the journey.
“When you pick a solution, it’s back to the question of whether the regulator understands it,” Newsome said. “Regulators have no understanding of crypto, so that’s another conversation to help them understand in the context of regs they’ve been pursuing for 30 years. How do you build it in a way that they feel safe and they feel the patrons are safe? If the organization and your partners understand it, we can all go together to the regulator and help them understand it. We’ve been successful in avoiding legislation in three jurisdictions that were going to bar you from loading your wallet on the gaming floor. This whole thing is complex, but you have to help the regulator understand it or you’re going to be stuck.”
Everyone in the industry is excited about the benefits of going cashless.
Crowe said customers who convert from cash play to digital pay on the floor likely spend 10% to 20% more. It takes only about 4% to 5% to cover all of the costs of cashless, he said.
Mike Day, CEO of conference host TribalHub, predicted that all casinos “are very likely to be cashless, whether you’re there today or not.” Most executives, if they’re being honest with themselves, would say they’re going to be cashless in the near future. No one in the audience had a cashless system in place.
Chad Hoehne, president and CEO of CasinoTrac, said the industry is rapidly moving into mobile and cashless. Mobile also provides an additional canvas for entertainment and engaging opportunities for the younger generation that the industry is just starting to explore.
“It’s not just gaming and social gaming, but other things are going to happen in that space,” Hoehne said. “It’s about having a mobile solution that can handle the transactional gaming activities and the transactional promotional activities for the guest and provide convenience.”
