- The Nevada gaming industry is looking to re-open soon after a two month plus shutdown due to the COVID-19 pandemic.
- For several gaming companies their mobile sports betting apps have become a welcome revenue lifeline.
- Cumbersome Nevada gaming regulations have made it more difficult for properties to service their mobile sports betting customers.
While it remains to be seen how Nevada’s sportsbooks will look after they re-open there’s one thing for certain–the Silver State’s gaming regulators definitely need to overhaul some of their antiquated regulations related to mobile betting. The mobile betting apps offered by the Westgate, MGM Resorts, Circa Sports, Caesars Entertainment, William Hill and the South Point have been the only gaming revenue generated during the past two months. That’s the good news–the bad news is that some boneheaded elements of state gaming regulations have made it significantly more difficult for mobile app operators to service customers.
The intent of the problematic components of state gaming regulations were what you’d expect–to enforce the shopworn belief that you have to force customers to physically go into the casino for everything. To sign up for a mobile app account in Nevada you need to physically go into the casino in question and pull out your ID for inspection. Never mind that the technology to facilitate not only mobile signup but ID verification has existed for years. Until now, this was a hassle but on a practical level a manageable one. With the majority of the state’s population in Southern Nevada and the majority of the casinos with sportsbook apps in the Las Vegas Valley it wasn’t *that* hard to sign up in person. The biggest issue was a Las Vegas resident not being able to get accounts at books in Northern Nevada such as the Atlantis without taking a trip to Reno.
That issue still exists but the COVID-19 shutdowns have revealed a much more damaging one. How can a casino sign up new customers for their mobile app when their physical property is closed? The short answer is ‘they can’t’, or at least they can’t unless they get creative. Faced with a choice of limiting mobile access to existing customers, South Point and Circa Sports found a clever way to sign up new clients. They made use of the idled valet parking area of their property for ‘curbside service’. William Hill was late to the party but they’ve started to offer ‘curbside service’ in the Alamo Casino parking lot, the Arizona Charlie’s Boulder valet and the Arizona Charlie’s Decatur parking lot. You need exact bills as no change can be given (another silly regulation) and all passengers in the car must be 21 years old (ditto) but it can be done.
THE REBIRTH OF THE BETTING KIOSK IN NEVADA
Yesterday, William Hill announced that seven mobile deposit kiosks are now available at re-opened businesses in Southern Nevada. This is another option for making deposits but only for existing customers. Making deposits isn’t really a problem for existing customers as there are several ways to do it including a service called Pay Near Me that allows deposits at over 100 CVS locations and over a gazillion (it’s actually just over 200) 7-11 locations in the Silver State. They do have kiosks that allow signup of new accounts but guess where they are? If you said ‘inside the closed casinos’ go to the head of the class.
WIlliam Hill has a deal with Southern Nevada’s ubiquitous PT’s Pub chain owned by Golden Entertainment to offer customers deposit kiosks. Golden Entertainment also operates pubs under other brand names and that’s where you can find the 7 re-opened deposit kiosks:
- Great American Pub, 9310 S. Eastern Ave. (24 hours a day)
- Great American Pub, 4145 S. Grand Canyon Drive (24 hours a day)
- PT’s, 7550 Oso Blanca Road (10 a.m. to 11 p.m.)
- PT’s Gold, 9363 S. Buffalo Drive (10 a.m. to 11 p.m.)
- PT’s Pub, 2280 S. Nellis Blvd. (10 a.m. to 11 p.m.)
- Sierra Gold, 6515 S. Jones Road (10 a.m. to 10 p.m.)
- Sierra Gold, 6929 Aliante Parkway (10 a.m. to 11 p.m.)
Deposit kiosks allow customers to….deposit money to existing accounts. You can’t place bets, open accounts or cash tickets at a deposit kiosks. There are William Hill kiosks that allow you to place bets in Nevada but take a guess where they are….once again, if you said ‘inside the closed casinos’ you are correct. You can do everything at these William Hill kiosks but since you’re already in or near a full service sportsbook that’s of limited value. You still can’t cash tickets at these kiosks–you have to go to the sportsbook or casino cage to do that.
WHY COMPETE WHEN YOU CAN TAKE ADVANTAGE OF ‘REGULATORY CAPTURE’?
By now, you probably think that this sounds very stupid. Why can’t William Hill place kiosks in places like PT’s Pub that allow customers to open new accounts, fund existing accounts, place bets and cash winning tickets? The answer is that they could and for a brief time shortly after they entered the Nevada market they did. That was until a law was passed that prohibited the kiosks in ‘restricted licensees’ like bars. Here’s what the Las Vegas Review Journal said about it:
That law, Senate Bill 416, recently signed by Gov. Brian Sandoval, bans betting sports betting kiosks in establishments holding a restricted license. A restricted license in Nevada allows a business to operate a maximum of 15 slot machines.
The kiosks generated $600,000 in revenue last year, or 0.35 percent of the total $170 million in revenue last year. Gamblers wagered more than $3.4 billion in sports in 2012.
The ‘word on the street’ at the time was that this was done at the behest of Stations Casinos which makes sense because they’d have the most to lose in a world where locals could place bets at kiosks not located in casinos. It wasn’t that they were losing a ton of money to their competitors with kiosks as the quote above notes. Basically, they just didn’t want to have to compete with their own kiosk offerings and just getting them outlawed was the easier solution.
At the time this is how the Nevada gaming industry and political system worked together. If any type of innovation reared it’s ugly head it would quickly get beat down by state politicians, gaming regulators or both. The fact that the two companies that were actively developing the kiosk market–William Hill and Cantor Gaming–were not only relative newcomers to the Nevada gaming industry but ones that had goals of chaning the dynamic of sports betting in the state (albiet in dramatically different ways) made them an easy target for the legacy gaming companies and their political benefactors. In this pre-PASPA world where Nevada had the monopoly in US sports betting that was the last place anyone wanted to compete.
THE KIOSK’S RENEWED VIABILITY IN A POST PANDEMIC GAMING INDUSTRY
An article on a kiosk industry trade website last year suggested that Nevada’s ‘sports betting culture’ made kiosks unpopular there. They didn’t mention anything about the business outlined above that made them illegal:
The relatively small William Hill sportsbook locations throughout Nevada have commonly made use of kiosks for years, but in the more opulent sportsbooks on the Las Vegas Strip and elsewhere, the self-serve devices are creeping in only a few at a time.
Charles Cohen, IGT PlayDigital vice president of sports betting, says the explanation lies in the longtime habits in the only state where sports wagers have historically been legal.
“The reality is it’s about the culture and style of experience that people associate with Las Vegas sports betting that makes it more of a personal, over-the-counter experience,” Cohen said. “The kind of training and expertise that ticket writers have at the windows there is very high, because they expect to have conversations with customers about the bets they’re placing.
“These guys are experts. There’s a certain social environment to the sportsbook where ticket writers are almost like hosts, and so the experience of walking into a sportsbook in Las Vegas is defined by that personal interaction.”
There’s definitely some truth to this and their point about the uniqueness of the Nevada sports betting culture is accurate. The real problem, however, is that kiosks are of little value when you’re already in the sportsbook. Were they located in convenient places–say, one of the gazillion (actually 200 or so) 7-11 locations in Nevada–they’d get plenty of use.
The quote from IGT’s Cohen was accurate at the time but it’ll soon be outdated in the post COVID-19 pandemic shutdown world. At that point it should be revised to say ‘the experience of walking into a sportsbook in Las Vegas WAS defined by that personal interaction.’ The old axiom that you want to get as much traffic as possible through the casino will finally die an overdue death in Nevada. With a greater awareness of social distancing and reduced occupancy limits mandated by law there is all of a sudden a business imperative to create as many revenue streams possible that don’t require people to physically be inside of the casino.
In a roundabout way, the changes to the traditional business model of the Nevada gaming industry forced by the COVID-19 pandemic come at a very fortuitous time. With sports betting now available elsewhere in the United States and at least a few states doing a good enough job with it to compete for Nevada’s title as epicenter of the sportsbook industry they’re in a world where they have no option but to compete. Forced into much needed changes, it could have the ancillary benefit of revitalizing sports betting in Nevada and creating an ecosystem where innovation is valued and not reviled.