Top 10 takeaways from the 2016 Global Gaming Expo (G2E) in Las Vegas

3 October 2016

LAS VEGAS – Everywhere you looked at last week's annual Global Gaming Expo (G2E), there were smiles and laughter. And the blissful mood wasn't just because the thousands of attendees and nearly 500 exhibitors were in Las Vegas with an array of after-hours "networking" parties to choose from, although that certainly helped.

No, the folks at G2E, including yours truly, were in a jovial state all week because it was clearly evident that the gaming industry is in a bona fide state of evolution and growth. These are exciting times for casino and gaming executives as well as gamblers and gamers, thanks to new advancements in technology, optimism regarding increased regulation, and the promise that the environment on casino floors is in the hyper-quick process of changing dramatically for the better.

While strolling the voluminous 260,000 square feet of space at the Sands Expo Convention Center for four straight days, I not only racked up enough steps to make my Fitbit self-destruct (that is, if I actually wore one), but I also filled three notebooks with observations and a voice recorder with interviews, most of which provided very good reasons for enthusiasm concerning the gaming industry.

Here are 10 of those takeaways, with a promise of more coverage coming your way soon.

10. The best G2E ever?
"How's the show going for you?" That's the typical line you hear or deliver upon running into someone at G2E, and every time I inquired last week, the response was bursting with positivity.

"I've been to every G2E for the last 14 years and I think this is the best one ever," said Tom Mitchell, managing director of Slot-Tickets Worldwide, a longtime source for all "ticket-in/ticket-out" slot machines. "Our industry tends to go in cycles and right now we're in a very good one. The economy is getting stronger, so I knew this would be a busy show. It's been great."

9. Global Gaming Expo goes "global"
Paul Gordon, senior VP of sales at Rymax Marketing Services, concurred with Mitchell, noting that this year's "Global" Gaming Expo was true to its name.

"We're seeing operators from all over the world this year, not just the West Coast, like we’ve seen in years past," said Gordon, whose New Jersey-based company is a leading supplier of player loyalty solutions in the gaming industry. "We've seen a lot more of an international flavor this year. There's also lots of people from the Midwest and an increasing presence from the Indian casinos.

"It’s a great sign. I think we could be in for a phenomenal few years in the near future."

8. Celebs are still a huge draw

Each year, show exhibitors like to bring some star power to their booth to draw traffic, and over the last two years, no one has done it better than Inspired Gaming.

Last year, the global supplier of Server Based Gaming (SBG) systems for a range of land-based gaming markets brought the inimitable Mike Tyson to its booth with great fanfare, but topped itself this year with an appearance by former NBA star Shaquille O'Neal, who was introduced as the new face of Inspired's Rush Basketball product, which will be live in 2017.

"Shaq" caused quite a commotion when he made his slow stroll to the booth. The line to get a picture with the 7-foot-1 former NBA MVP and four-time champion stood more than a hundred people deep for over an hour on Tuesday afternoon, a day that included a few other noteworthy visitors.

Around the same time that Shaq arrived, Wheel of Fortune hostess Vanna White was at the IGT booth receiving a key to the city of Las Vegas from Mayor Carolyn Goodman. IGT, of course, launched its Wheel of Fortune slot in 1996, and it has gone on to become one of the most successful games worldwide, minting more than 1,000 millionaires and delivering over $3 billion in jackpots.

Elsewhere, country singer Tim McGraw dropped into the Aristocrat booth area onto a platform with his new slot machine, prompting some deafening shrieks from woman attendees; Las Vegas icons Penn and Teller were on hand to help launch their new slot machine at the Everi booth; and "the Soup Nazi Guy" (Larry Thomas) from Seinfeld was in attendance at the Scientific Games booth, wearing full kitchen garb as he unveiled a new slot that was inspired by the show and will hit casino floors next year.

7. The "millennial problem" rediscovered
Last year's G2E was chock-full of speakers and seminars spouting stats about how today's new generation doesn't like to gamble. Hours and hours of time was dedicated to how to how casinos can "capture" the millennial generation, and the discussion has been ongoing and relentless for the better part of the past calendar year.

While millennials were still a hot topic of discussion this year, the conversation is evolving and everyone seems to be more educated.

The narrative no longer involved solely a bunch of 60-something casino executives scolding millennials and asking incredulously, "Why don’t they want to gamble?"Rather, the industry overall seems more aware of the fact that millennials simply don't have a lot of discretionary income and they don't want to spend what little they have on gambling.

For example, the tone at Chuck Underwood's seminar titled "The Generational Disruption of Gaming" was far different than what we were flooded with last year. Underwood is the founder of consulting firm The Generational Imperative Inc. and was quick to point out that casinos shouldn't be focusing all of their attention on trying to monetize millennials. Baby boomers, he pointed out, still control half of the country's wealth.

"Ignore the baby boomers at your peril,” he said at his session on Wednesday.

Underwood also pointed out that Generation X is just now hitting its "economic sweet spot," with older children and more time on their hands as they reach their maximum earning potential.

As for millennials, Underwood said if casinos want to attract them they must provide "packaged experiences" that can be shared with friends and colleagues, intermingling dining out, concerts and interactive activities.

The bottom line, according to Underwood: Casinos need to take generational differences into account and create their marketing materials and campaigns based upon the vast differences in preferences.

6. Skill games coming to a casino near you
Despite the seemingly renewed thought process toward millennials, the casino industry is still "all in" on bringing new games to the floor that will attract players from all generations who are looking for something other than a traditional slot machine or blackjack table.

Just as G2E launched last week, GameCo announced that its new skill-based gambling machines will debut at Caesars Entertainment properties in Atlantic City this fall.

GameCo CEO and co-founder Blaine Graboyes told us he expects the machines to be in Connecticut casinos by the end of the year and in Nevada early next year.

"Gamers are no longer the guy sitting in their mom's basement playing video games," he said as he demonstrated the new Danger Arena game on the G2E floor. "We've grown up and we have real jobs, but we don't play slot machines and slot machines are what generate money for the casino. So, there was a mismatch in the entertainment experience."

Graboyes' solution was to create VGMs that looks like slot machines and has the same return, but are "single player, multi-world" with payouts determined by a player's skill.

"I've been an entrepreneur for 25 years and I've never had a solution to an actual problem that was so clear cut," he added. "The most exciting is that this is a real video game. Whether you win or lose money, either way you will have fun playing a real video game, not a slot machine, and there's a big difference."

5. Virtual Reality casino games
One of the busiest booths on the G2E floor was Gamblit Gaming's, thanks to its array of new games that are "social, interactive, fun and require skill," according to Chief Marketing Officer Darion Lowenstein.

The virtual reality game called The Brookhaven Experiment — the most viral VR game ever made, with over 50 million views — certainly checks the box on all four items. Played in an elevated 10-foot-by-10-foot glass casing called the Virtual Reality Cube with music blaring and fog rising from the shaking ground, the game is set to hit casinos in Q1 of 2017 when players, armed with a virtual gun and flashlight, can win money by shooting cybernetic zombies. Even better, friends will be able to sit, watch and bet on their friends.

"It's the original game, we didn't change a thing," explained Lowenstein. "Except now it has a gambling feature to it."

Player can bet $15, $25 or $50 on three different challenges. Depending on how well you do, you get cash back based on performance.

Trust me, I don’t care what generation you’re from, this is a game you simply must get out and experience for yourself.

4. Social gaming
In addition to the introduction of skill games, a key trend in the industry is social gaming, which has become a high priority for brick-and-mortar casinos.

Social gaming allows casinos to learn more about their existing customers and keep them "engaged" when they leave the property. There are no cash prizes, but casinos can test new games and keep their brand "front of mind' with their guests outside the casino walls. Social gaming is already a $3.4 billion market, and Eilers Research predicts that number will reach $4.4 billion by 2017.

On a G2E panel titled "Evaluating, Building and Operating a Social Casino," Kenny Huang of BlueBat Games explained that 85% of social casino players have been to a casino within the last year and that it does not "cannibalize" gaming revenue.

"It adds to it," he said. "It adds brand awareness and brand loyalty and encourages guests to come to their casino when they do decide to play."

3. Betting on eSports
Las Vegas is well on its way to becoming an eSports hub, attracting major events and with casinos such as Downtown Grand Las Vegas unveiling dedicated eSports lounges.

So, being Las Vegas, it would only be natural if we could start betting on eSports — and according to Gaming Control Board chair A.G. Burnett, that option is close to becoming a reality, with a chance we might see it before the end of this year.

"If I have anything to do with it, then yes (it will happen in 2016)," he said. "The regulatory scheme is in place to allow that bet to occur."

If it does happen, there most certainly appears to be a market for it. At a jam-packed seminar titled "eSports and Casinos: The Coming Collision," host Chris Grove of Narus Advisors and Eilers & Krejcik spelled out some compelling statistics, including this whopper: The eSportsbook handle could approach $12 billion by the year 2020.

2. Mobile sports betting
The introduction of mobile sports betting apps has been a game-changer for avid sports bettors like myself when traveling to Las Vegas, and apparently I am not alone.

At a session titled "Mobile Sports Betting: U.S. & Around the World," the continued increase each year of the Nevada sportsbook handle has largely been credited to the advent of the mobile apps, which most of the state’s sportsbooks now offer.

In fact, panelist Dan Shapiro, William Hill’s director of business development, said that mobile sports betting makes up more than 50% of their total business, compared to just 16% in 2012.

1. Regulated sports betting in the U.S.
G2E 2015 was dominated by the daily fantasy sports industry, but this year sports betting took center stage.

All week long, American Gaming Association President Geoff Freeman was unabashed in calling for the regulation of sports betting in the U.S. outside the state of Nevada. He led off his keynote address at G2E by saying he’s "Never been more optimistic about regulated sports betting in U.S." and that he foresees it happening "within the next three to five years."

And the reason, in Freeman’s eyes, is simple.

"When it comes to growth for this industry we’re going to have to get more creative," he said. "One way to do that is by empowering the industry to provide our customers with the products they want most. And there’s no better example than that than sports betting."

Freeman points out that we know Americans are "clamoring" to bet on sports in a legal way because they are going to great lengths to do so in an illegal way, as evidenced by the estimated $150 billion that is wagered on sports in the U.S. each year on the black market.

"When PASPA was passed in 1992 it was done with the goal of protecting the integrity of sports, but I think we’ve learned over the past 25 years that instead it has put us in the darkness," Freeman added. "It gives us less access to data and less information about what’s really going on, who’s placing the bets and where they’re being taken. We don’t have that information in the U.S., but they do have that information elsewhere."

Helping to put an exclamation point on Freeman’s point, former NBA Commissioner David Stern spoke on the final day of G2E, saying, "I've come to accept the notion that a properly regulated gambling operation is protective of, and not deleterious to, sports . . . We’ve got to get everyone together — the casinos, gaming companies, regulation experts and sports leagues — and come up with a plan."

And if all goes the way Freeman expects, that plan will come to fruition in the very near future.

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