Last year, casinos saw a surge in gaming revenues, despite the ongoing impact of the Covid-19 pandemic. With Omicron sweeping the world, plus a return to masking and other precautions in some markets, what can we expect for 2022?
Casey Clark, senior vice president of the American Gaming Association predicted “another strong year for (U.S.) gaming, this time with a much clearer, more confident outlook for the industry’s health—even though it’s too soon to tell if 2022 will rival 2021’s revenue records.”
Travel & Meetings
To grow, the industry needs the resumption of cross-border travel and a return of meetings and conventions, said Brendan D. Bussmann, director of government affairs for Global Market Advisors. Strength in those sectors will build on positive trends that began in 2021, and compensate for potential headwinds like inflation, supply chain logjams and of course, the ebb and flow of the pandemic itself.
“There’s still significant recovery to come in 2022, especially for destinations like Las Vegas and all of Asia, and Asia still has to largely begin its recovery,” said Bussmann. “Macau may be the only jurisdiction where I’ll say there’s a ‘new normal’ with the flow of money significantly changed, the end of junkets as we’ve known them and concession renewals still needing to be finalized. It makes for an interesting future.”
Sports betting and iGaming will remain a focus in 2022 and a significant opportunity for growth across the globe, Bussmann said.
“Land-based gaming is far from dead too. With Brazil, Thailand and others looking around, it’s about crafting the right market opportunity to attract the best operators to a market and let it thrive,” he said.
Expanded Sports Betting
In the U.S., of 19 states with the chance to legalize sports betting this year, three won’t: North Dakota, Texas and Utah.
States that look likely to legalize include:
- California. The Golden State could legalize sports betting, possibly through tribal casinos, possibly through a referendum. If the ballot measure proposed by a California tribal coalition passes muster among voters in November, a retail industry could launch in early 2023. Mobile betting is not part of the tribes’ proposal to start.
- Georgia. Pro sports teams in the Peach State want sports betting now. “Georgia appears to be moving toward the Virginia/Tennessee model, with the lottery awarding online operator licenses, and we’ve seen some decent progress on a bill in 2021,” said Tipico U.S. Head of Business Development and Strategy Steve Krombolz. “There is optimism that 2022 could be the year.”
- Massachusetts. According to Bussmann, the Bay State “has a robust gaming industry, so there’s no reason why a bill has not passed.” Look for sports betting there this year.
- North Carolina. Senators in the state have already approved a sports betting bill; it now awaits House action. Lawmakers legalized retail wagering at two tribal casinos in July 2020, with the first bets taken in March 2021. There don’t appear to be any major roadblocks now, other than legislators failing to find consensus on the framework.
- Missouri. In the Show-Me State, sports betting should be a done deal by the end of the year. And as Missouri goes, so goes Kansas.
- Maine. It’s an election year in Maine; lawmakers support sports betting, realizing that New Hampshire sportsbooks are making money on Maine bettors.
Unless Oklahoma Governor Kevin Stitt and the state’s tribes stop their bickering, that state is in the “no” column. Sports betting in Alabama would require a constitutional amendment, and lawmakers don’t hold out much hope that it will happen in 2022. Minnesota doesn’t have much of a consensus, especially for mobile sports betting. The remaining U.S. states have even less of a chance to see legal sports wagers.
Online Casinos a Harder Sell
Online casinos are a much more lucrative business for both operators and state governments. Yet fewer states want to jump in. Why?
“There are a few big reasons,” said Becca Giden, director of policy for Eilers & Krejcik Gaming. “One is economic need, the state of state budgets. When states are in a deficit or coming close to needing money, both sports betting and online casinos become incremental revenue sources that proponents of that legislation can sell as new revenue sources.
“But most states are flush with cash as a result of special federal assistance, so this urgency for new revenue sources just isn’t there, and we don’t see it coming back for at least a year or two.”
Another reason? Online casino proponents are few and far between, especially compared to advocates of sports betting.
“Sports betting will often pull together a lot of lobbying forces—not only casinos, but also sports entities, facilities, teams, independently owned businesses that are sports-related like sports bars, and sometimes even the actual government itself, in cases where the lottery is going to be an operator or regulator,” Giden said. “Sports betting pulls together this big tent of people.” When it comes to online casinos, by contrast, “it’s usually just the casinos and the gambling entities, and the government.”
Smaller, regional casinos often oppose online gaming, worried it will decrease foot traffic at their brick-and-mortar operations. Moreover, online casino gambling is somehow seen as more distasteful than sports betting.
“Legislators will eventually catch up,” said Giden, “but in the short- and medium-term, we see states legalizing online casinos at about a quarter of the rate as sports betting being legalized. Next year we’re pretty bearish, but for 2023 we’re looking at states that already have online sports betting and are looking to resolve some of the stakeholder issues.”
At another level, responsible gaming efforts are evolving as the industry expands, and the AGA will be very active in this area, Clark said. “The AGA is focused on concerns around advertising, aligning on proactive consumer education and streamlining resources for problem gambling to better serve vulnerable populations.”
New technologies that gather customer data bring new responsibilities in terms of player protections, added Alan M. Feldman, distinguished fellow of responsible gaming at the International Gaming Institute at the University of Nevada Las Vegas. It will be especially true as the sports betting landscape swells.
“This is in part because of regulatory requirements,” Feldman said, “but it’s also because teams, leagues and gambling companies are gaining a greater understanding that practicing responsible gaming is good for their business. Not only do customers expect them all to act responsibly, but when they do so, it gives the public greater confidence in the integrity of sports gambling.
“With the passing of each new year, I remain hopeful that legislators and regulators will commit to funding investments in research, prevention, awareness and treatment efforts,” Feldman continued. “It’s possible that the spotlight of sports gambling may drive some renewed political interest in doing so and should that be the case, the public will be the beneficiary.”
In 2021, casino customers returned to land-based properties in numbers far greater than anticipated, but demographics that once were scarce on the floor—like millennials—also came out in droves, said Josh Swissman, founding partner of the Strategy Organization. Whether we see a repeat of that phenomenon this year is yet to be determined.
“Will millennials continue to show up to casinos in large numbers?” asked Swissman. “Will the baby boomers come back? What will it take to entice both groups to do so? These are some of the questions 2022 could answer.”