The casino industry spent a record $41 million dollars to convince few more Missourians to vote in favor of sports wagering than voted against it—very few—out of about three million votes cast.
It will be a mistake to think the industry is satisfied with the sweetheart arrangement voters approved. The casino industry is changing rapidly, and the legislature and the voters need to be preparing for the next change in law that will benefit casinos and disadvantage the state, our schools, and their own host cities.
We don’t profess to be an expert or some kind of Casino Nostradamus, but we have been studying this industry and its proposals for several years now. It is not hard to find industry and scholarly articles pointing to a much different industry materializing in the next ten years or less. The casino industry is being altered by demographic changes. But rapidly changing technology will let the industry respond to those demographic changes.
Amendment 2 was just the first step. The policy set by Amendment 2 is likely to be the template for state policy as casinos move increasingly to remote betting on ALL gambling offerings.
We know from experience that technology often moves faster than the development of reasonable and fair regulation of it, making this a time for correction of shortcomings of the past coupled with anticipation of problems in the future. The state will be well-served by a adopting a policy of correction and anticipation, although there is considerable doubt that such a policy will be enacted a Missouri Legislature that is heavily influenced by industry pressure and largesse. Whether voters who can be wooed by absurd amounts of money spent on advertising that is low on the honesty scale would approve a policy unfriendly to the casinos is problematic.
A couple of years ago, Joey Richardson wrote for Gamblingsites.org, “(Casinos) are going to need to change what they offer and how they offer it if they want to continue to attract new customers.”
Millennials who have grown up on video games and who learned during the pandemic how to live their lives without leaving their homes already are having a major impact on the future of businesses of all kinds. Past discussions of internet sales taxes as a meager protection for brick and mortar businesses were one of the beginnings of this trend that gained momentum in the pandemic era when working from home became viable.
Hoosier Park Racing & Casino in Indiana became one of the first casinos to have a Pac-Man video slot machine, in September of 2017. Blackjack revenue for casinos is about half what it was in 1985 when it was responsible for 85% of table game revenues. Richardson noted in his article that casinos already had brought in new games to fill the gap—Caribbean stud, Three Card Poker, and Casino Holdem among them. All can be played remotely—if laws are changed to allow it.
Although Richardson doubts brick and mortar casinos will die out, Mehul Boricha, at Techrival.com has suggested virtual reality casinos could be on the way. He wrote, “Rules and regulations will always continue to influence future casinos. Various regulatory bodies come up with new and stricter policies that online casinos and games have to adopt without losing their grip on their innovation and creativity.” The new world of casino gambling that is being born in front of us will be a challenge not only to tomorrow’s legislature but to the gaming and lottery commissions that will have to regulate it. The gambling industry prefers not to make or be forced to make an investment that will allow regulatory bodies to prepare for the changes they must make to balance public responsibility with private profit.
Marketing Manager Emily Rodgers with driveresearch.com reported on August 2, 2023 that the growing preference for online or mobile app betting among three-quarters of sports bettors indicates a significant shift in the gambling industry towards digital platforms, offering convenience, accessibility, and potentially contributing to the overall increase in sports betting activity worldwide. She says convenience (78%) and easy deposits (75%) are the top reasons people prefer online/mobile sports betting. She argues that these top factors highlight the importance of user-friendly and seamless platforms in the gambling industry, factors that not only attract more bettors but also contribute to increased customer retention and engagement. She says digital channels are in the future for casino gambling, beginning with sports wagering..
Online sports betting revenue is expected to grow at a compounded annual rate (CAGR) of 10% during the next 5 years.
The introduction of AI (artificial intelligence) in sports betting will undoubtedly have a profound impact on the industry. One example is the way systems record information in digitized ledgers known as blockchain, which is being adopted globally. Blockchain applications will help automate real-time data, expedite payments and wagers, and provide in-the-moment security and monitoring – including cryptocurrency transactions that are not allowed in Missouri, yet.
The sports betting marketplace grew ten-fold from 2019 to 2021 while netting nearly $7B in revenue from $83B in total bets placed on sports in 2022.
Another report by marketdecipher.com revealed similar findings. In fact, its estimated $85B in bets placed in 2023 is forecast to balloon to $288B total by the end of 2032.
Virtual reality sports betting took a step forward with the launch of the VR22 sports betting platform last October. The service allows users to take in a 360-degree live gaming experience as if they were there in person. Users can interact with the game or match in real time including the ability to place wagers down to a specific play – and even purchase merchandise or NFTs.
Missouri already has remote betting although it has been on a small scale. In the past several years, a few of our casinos have had what they call “hybrid” wagering. If a table is too crowded to allow additional players, gamblers are referred to a computer terminal that lets them place bets at the table as if they were physically there. It has been done on a small scale and has generated generally small profits. But it’s an experiment and it works. Whether the terminal is fifty feet from the table or 50 miles and at someone else’s table, it is still sports wagering. And it is part of gambling’s future.
Another reason present casinos need to reach the public where it is, instead of waiting for the public to come back, is the threat of widespread competition. It is a very real threat and the first part of it could be in business in a few years. We’ll talk about that in our next edition.