The end of 2020 marks the end of the most turbulent year in modern gaming history, and we are about to enter what will also be a turbulent year, but in a far different way, with new opportunities unfolding for those with the foresight and tools to seize them.
Several macro forces have been either unleashed or have gained momentum in recent months that have converged to create a self-sustaining whirlwind of change. Most of those were forces were conceived by humans, while one can be attributed to a virus. They include:
- The global pandemic
- The 2018 US Supreme Court ruling that overturned PASPA
- The development of extraordinary new technologies that collectively have made gaming easier to implement and regulate
- The dire need for state and local governments to generate new sources of revenue
- The constant, relentless aging of the core demographic base for both the land-based casino industry and for lotteries
- The growing interest in esports and the expanding popularity of sports betting and igaming
The development of widely available vaccines, which will mark the end of the pandemic, will not prompt the gaming industry to snap back to what it was in 2019. Indeed, adults who have entered the digital age of wagering may shift some of their spending to more traditional forms of entertainment, including visits to casinos, but many of those adults – and the dollars they spend – will remain where they are.
States have encouraged, and have benefited from the shift to digital wagering, creating a new phenomenon. The path to gaming implementation formerly relied on the approval, licensing, development and regulation of physical casinos, a process that by definition can take years to implement and would still encounter significant political and cultural challenges along the path to development.
The new reality is that a number of state governments have learned that implementing mobile sports betting, igaming or ilottery can shorten that process from years to months with far less friction along the way.
Such discoveries, however, will not be without frictions of a different sort. States will have to negotiate terms that allow a full-service ilottery – including digital instant games – to co-exist with full-service igaming, including digital slot products.
States will learn that a fully developed gaming policy has to do more than simply project the revenue from digital gaming and multiply that number by the tax rate to gauge the fiscal impact. The new form of gaming math requires a more detailed process, particularly for states that have – or are considering – the development or expansion of physical casinos.
That means developing policies that create or maintain necessary licensing requirements. Gaming operators that have adhered to strict requirements for demonstrating their suitability will not – and clearly should not – countenance any lessening of those standards. Strict licensing standards are the foundation of public confidence in gaming, and create necessary barriers to entry from operators that have hitherto not played by the rules.
Policies should also seek to maximize employment, capital investment, urban redevelopment and the other pre-pandemic goals that were high on the agenda of state leaders. This means a 360-degree approach to gaming that recognize certain immutable laws of human nature that no virus and no technological breakthrough can undo:
- Humans are hard-wired to enjoy games of chance, to take on reasonable, affordable risks.
- Humans are also hard-wired to enjoy social settings, and to get out from under the power of technology to welcome the company of other humans.
Those laws are just immutable as the macro forces that will shape gaming in 2021 and beyond. Happy New Year.
Michael Pollock is Managing Director of Spectrum Gaming Group, which has worked in 40 US states and territories and in 48 countries on six continents. Its clients include 22 US state and territory governments, six national governments and 22 Native American entities. Spectrum serves as Executive Director for the National Council of Legislators from Gaming States (NCLGS).
Image by Free-Photos from Pixabay
Original article: https://igamingbusiness.com/goodbye-turbulent-2020/
