Gaming CEO Roundtable: The Future & The Challenges That Remain
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LAS VEGAS — Three high-profile gaming CEOs answered a round of questions Wednesday on the third day of the Global Gaming Expo (G2E) being held at the Venetian Expo about the future and recent experience of their industry as it navigates the ending stages of the lingering COVID19 pandemic.
Jim Allen, chairman of Hard Rock/Seminole Gaming; Bill Hornbuckle, of MGM Resorts International, and Matt Maddox, of Wynn Resorts, fielded questions about the gambling business at-large, including sports betting, and their own companies.
Changes Brought About by the Pandemic
All three noted that as the pandemic restrictions on casinos eased, the demographic of customers skewed younger.
The 21-35 demographic has been an elusive customer for the gaming industry for many years and Maddox said that not only are younger customers coming into the casinos “but they’re actually gambling.” Younger casino-goers had been known to dine and drink and go to clubs, but they had avoided slots and table games.
Hornbuckle concurred, saying that slot play among younger customers has increased noticeably.
Allen was cautious about the phenomenon signaling a trend, saying that the second and third quarters of 2022 will be telling as pent-up cash and stimulus money no longer fuels consumer spend.
All three agreed that the return of the older casino demo (65-plus) has been slower.
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Emergence of Online Sports Betting and iGaming
Maddox reflected on the millions and millions being spent by some online sportsbooks on customer acquisition with a direct: “Is losing a billion dollars a year a good thing? No!”
Some online companies such as DraftKings, reveal in quarterly earnings reports that losses for a quarter exceed $300 million.
The market will, at some point, reach an inflection point at which the current trajectory has to change, Maddox said. As far as his own company’s online efforts with WynnBET, it will pursue what appear to be fresh opportunities, such as the Arizona sports betting market, but not get in a furious fight in mature markets, such as New Jersey.
Meanwhile, Hornbuckle’s company has joined the online sports betting fray in a big way, zooming from a market share in the single digits to about 25% today.
So, BetMGM has committed to becoming dominant, especially in markets where it has synergies with other gaming operations, such as Michigan, where it also has a casino (MGM Grand Detroit). Hornbuckle said the fear that online casino gaming would cannibalize brick-and-mortar revenue has not happened in Michigan. In fact, he said, both have flourished.
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Their Individual Company’s Challenges
Maddox/Wynn: Maddox referenced the trying days his company experienced when founding presence Steve Wynn faced allegations of sexual misconduct in 2018. The result was that Wynn was drive out of the company, leading to a shake-up of Wynn Resorts’ corporate leadership.
Maddox said that regaining the trust of employees and customers was paramount. With the company spending nearly two years in an effort to regain the trust, the pandemic hit and the company was among the first casinos on the Strip to continue paying its employees during a 70-plus day shutdown. It strongly encouraged vaccinations, set up vaccination sites on-property and has achieved employee vaccination participation of 87%.
Hornbuckle/MGM: MGM is looking at a challenge brought on by a merger/acquisition scenario where online sports betting rival DraftKings is trying to purchase Entain, an Isle of Man-based company that owns the Ladbrokes betting shops. Entain also happens to be a partner with MGM in owning the BetMGM online gambling platform.
Should DraftKings own Entain (and in the process, BetMGM), the resultant conflict is obvious and Hornbuckle says that MGM is in position to require something beneficial to it should the acquisition continue to move forward. The Draft Kings/Entain deal has to reach a decision moment by mid-October, Hornbuckle said.
Allen/Hard Rock-Seminole Gaming: The Seminole Tribe’s foundational business is in Florida where the tribe’s cornerstone is its casinos, particularly in Tampa and Hollywood (Miami area). In a deal hammered out between the tribe and Florida Gov. Ron DeSantis and approved by the state legislature, the Seminoles would have control over online sports gambling there (including a sports betting app) as well as having retail sportsbooks and added casino games of craps and roulette.
That deal is being challenged in court where a number of competing interests are suing the state of Florida and the federal Department of the Interior (which OK’d the DeSantis-Seminole compact). Should the court cases go against the new sports gambling compact, Allen said his company would seek other avenues, including possibly a referendum where voters would decide.