The casino industry isn’t known for being introspective; the focus is usually strictly on the bottom line and the here and now. But the annual Global Gaming Expo, held late last month at the Sands Expo Center, is the gambling business’ chance to do some soul-searching. This year, that meant finally accepting that the status quo is gone.
Online gaming has been part of the mix at the expo—colloquially known as G2E—for a few years now, but with sites actually taking real money in Nevada and the rollout of real-money online play in New Jersey less than two months away, there was more urgency surrounding it than before.
So if you are a reporter covering the conference, instead of talking to the CEO of a casino company about the potential for expansion into new states, you end up chatting about touchscreens, apps and HTML5 with Itai Frieberger, chief operating officer of 888 Holdings. A leading platform provider, 888 has been in the online gaming world since 1997. And the company demonstrates the rapprochement that the industry has made with online play. 888 withdrew from the U.S. market after the 2006 Unlawful Internet Gaming Enforcement Act made collecting money from U.S. players unambiguously illegal. The departure meant that 888 lost half of its revenue, but it also created an opportunity for the company to refine its strengths as a platform provider in regulated markets, chiefly in Europe.
Now that the U.S. is beginning to permit legal online play, 888 is back—in a big way. It provides the platform for Caesars Entertainment’s WSOP.com, which launched in September, and has inked partnerships with several other companies, including Wynn/Encore and Treasure Island (888 will provide the technology behind their online poker rooms). Meanwhile, gaming-technology firm Scientific Games will supply 888 content to casinos nationwide.
The online reversal is consistent with the industry’s history. In the 1970s, Nevada casinos railed against “foreign” gambling in other states; but once it was proven that operators here could do quite well in Atlantic City, they embraced amending the state’s regulations to permit “foreign” ownership. In the 1980s, commercial casinos fought tenaciously against the spread of tribal government gambling—until they started to compete for management contracts to run Indian casinos.
The new day was apparent when the American Gaming Association named Victor Rocha, owner and operator of Pechanga.net—an online news site specializing in Indian gaming and Native American issues—the 2013 recipient of the award for Lifetime Achievement in Gaming Communications. In one fell swoop, the AGA reached out to both tribal communities and the new media, something that was once unthinkable.
“Fifteen years ago, we were locking horns with the AGA and Las Vegas over tribal gaming in California,” Rocha says. (The tribes won that battle handily.) “The award was a first step in the right direction toward reconciliation of two powerful industries. We have more in common now than before.”
The conference showed a transition in leadership at the sponsoring American Gaming Association; it was the first for Geoff Freeman, who replaced founding President Frank Fahrenkopf in July. Freeman has been candid about the need to shake up both his group and the industry itself. In a recent speech he promised to “clear a pathway for our members to attract a new generation of gamers, [and] tap into the huge potential offered by digital expansion.”
Freeman is correctly reading the situation; with leveling casino revenues nationwide and few opportunities for additional expansion, the only path for growth is change. That approach is already winning fans.
“This new attitude from Geoff and the AGA is so refreshing,” Rocha says. “He brings a new mindset to the gaming industry without the dogma and old prejudices. I’m very optimistic about our collective future.”
David G. Schwartz is the director of UNLV’s Center for Gaming Research.