Cashless Systems, Cryptocurrency Patents For Gaming Transactions And The Rise Of Legal Sports Betting and iGaming Revenue Even In An Otherwise Traumatic Year. The U.S. Gaming Industry Is Bound For Change And It’s All Quite Exciting.
By Michael P. Johnson
Everyone knows 2020 was a terrible year in every single way. From a business perspective, the commercial gaming industry got to put some numbers to that last week, when the American Gaming Association (AGA) announced on that commercial gaming revenue in the United States totaled $30 billion in 2020, down more than 31% year-over-year, according to their Commercial Gaming Revenue Tracker. This, incidentally, was the first market contraction for the U.S. gaming industry since 2014, and the lowest gaming revenue total since 2003.
These figures came against the backdrop of other AGA research from last year, which indicated that 59% of past-year casino visitors were less likely to use cash in their everyday lives because of the Covid-19 pandemic. More than half of those visitors (54%) also indicated they would very likely use a digital or contactless payment option when they gambled, if it were available to them.
The pandemic probably only exacerbated what was a known issue for longstanding casino visitors. For years, casino patrons have had to wait in line at ATMs to get some more cash from their bank accounts. They’ve had to stay at their machines long after they’ve pressed the “help” button just so a slot attendant could fix a ticket jam. And all too often, it’s been a frustrating wait.
However, if you’ve ever been that person, your days of waiting on tardy attendants might be done and dusted — if you choose to become “cashless” when you gamble. Why cashless? There’s no cash to manage. No dirty notes to handle. Your money is almost certainly more secure, and you’re safer because no one is hanging around watching you pull money out from a teller machine.
The times, they are a-changin’, and in this pandemic-dominated world where everyone is germophobic, it’s all happening pretty quickly. Eight months ago, in late June 2020, with lockdowns at their peak in a world gone haywire, the Nevada Gaming Commission approved a cluster of amendments recommended earlier that month by the Nevada Gaming Control Board, in a quest to move the gaming world further down the road toward a cashless environment.
Around the same time, the Washington, D.C.-based AGA, the national trade group that represents the $261 billion U.S. casino industry, released its Payments Modernization Policy Principles, which it said was an 18-month, collaborative industry effort with both commercial and tribal organizations, to provide a framework for “regulatory flexibility allowing digital payments on the casino floor.” These principles were:
- Equip customers with more tools to wager responsibly.
- Give customers payment choice and convenience.
- Ensure state laws enable a flexible regulatory approach, capable of keeping pace with evolving forms of digital payments.
- Address heightened customer public health concerns.
- Provide customers confidence in digital payment security.
- Create a uniform regulatory environment for casino operators, suppliers, and regulators.
- Empower law enforcement to better identify offenders through digital payment analysis.
The AGA stated that “enabling payment choice” not only improved responsible gaming efforts by giving casino patrons the digital tools to help them monitor their gaming and set limits, but also offered operators, regulators, and law enforcement more transparency while monitoring financial transactions and anti-money laundering initiatives.
Cryptocurrency At Casinos On Its Way?
So, it perhaps made perfect sense when earlier this year, IGT, or International Gaming Technology, Plc, the world’s largest maker of slot machines, received approval from the Nevada Gaming Control Board to use their cashless system at casinos around the same time that they were awarded a patent that potentially moves the world toward the eventual use of bitcoin and other cryptocurrencies for gaming transactions. “IGT secured this patent to bolster its industry-leading patent portfolio in anticipation of any possible future direction in regulated gaming involving cryptocurrency,” company spokesman Phil O’Shaughnessy was quoted as saying by Bloomberg.
According to Patent #US010885740, the patent is for “a system that enables cryptocurrency funds to be transferred between a gaming establishment account associated with a player and an external cryptocurrency account.” Further, it adds, “… the instructions cause the gaming establishment component processor to escrow the amount of cryptocurrency, establish a line of credit based on the escrowed amount of cryptocurrency, and modify a balance of a gaming establishment account based on the line of credit.”
IGT has not yet revealed any plans to integrate cryptocurrency into its technology as of this date. As things stand, players still have to use external sources such as credit and debit cards, bank accounts, and e-Wallets. However, the patent covers a way for casino patrons to pay for their bets with bitcoin, bitcoin cash, and ether.
Apparently, the idea for potentially utilizing cryptocurrency stemmed from the focus on getting a younger clientele to frequent gaming establishments. In 2018, data showed that people between the ages of 60 and 70 were playing more than people between the ages of 21 and 30. The data also reflected that when a younger person did sit down to gamble, they typically sat for less time than an older gambler.
Things Can Only Get Better
According to the Las Vegas Review-Journal, prior to the June amendments, prior regulations mandated that when funds were transferred digitally, they had to be moved to a device in a casino that would “print out a dollar amount that could be used in slot machines.” “That step has been removed,” said the Review-Journal, “and systems now will be able to move funds from a digital wallet that could be accessed via a smartphone or tablet directly to slots or tables.” They added that several companies were setting up their cashless systems, “including Everi Holdings, Scientific Games, IGT and NRT Technology Corp., which was approved for licensing by commissioners earlier in the meeting.”
All in all, these are exciting times for the gaming industry. While 2020 wasn’t a happy year for the most, it did see the growth of new gaming options, with legal sports betting garnering an all-time high of $1.5 billion in revenue, up 69% year-over-year, and iGaming revenue nearly tripling to almost $1.6 billion.
There is other good news. Since casinos began to reopen in mid-2020, there have been no serious or sustained public health concerns, with 911 out of 998 U.S. casinos having reopened safely. Still, heading down the avenue of cashless betting is smart and logical for an otherwise cash-intensive business. In today’s post-pandemic world, with people rightly concerned about viruses, you should be able to head out for a night of entertainment without having to worry about what disease you may take home just because you went out gambling.
About the writer: Michael P. Johnson is a technology writer from the Greater Memphis Area. Mr. Johnson has almost two decades of experience in the casino industry, utilizing tech daily. You can read more about his work on his website, or reach him at email@example.com. You can also write to us: firstname.lastname@example.org