Wynn Resorts’ CEO Craig Billings this weekend took to LinkedIn to label the debate surrounding the effect of online gambling on brick-and-mortar casinos as “a bit reductive.”
While the emergence of online casinos in the gaming industry has created new competition, Billings points out that it is important to avoid simplifying the effect it may have on local casinos.
Having nearly eight years of experience at Wynn Resorts and more than two decades of experience in the gaming industry, Billings emphasized the need to look beyond simplistic arguments about the Total Addressable Market (TAM) and tax bases in the igaming discussion.
“With the introduction of online casino, you are allowing the entry of many new and capable competitors, often times into states that have had a very stable competitive dynamic for many years,” Billings wrote. “So, no matter which side of the ‘cannibalization vs. no cannibalization’ debate you are on, assuming that the (positive or negative) impact will be uniformly shared by all regional casinos is pretty naïve.”
Billings pointed out that he’s “neutral” on the matter since Wynn no longer has an online business and only one regional casino. Encore Boston Harbor is the company’s sole venue classified as such.
While online casinos are recognized for long-term growth potential, they are legal in only seven states. On the other hand, Billings notes that there are around 1,000 commercial and tribal casinos in the United States, with only about 10 percent to 15 percent embracing an omnichannel strategy that includes land-based and online casinos and sports wagering.
“The properties that might actually be able to compete with the digital native online gaming providers are those that are owned by the large national gaming operators,” Billings suggested. “What about everyone else? Market share will shift. In land-based gaming, there will be market share winners and losers. No doubt in my mind. As an operator, the TAM doesn’t pay my bills, my share of it does.”
