Annual Top Trends in Gaming

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Since 2005, Spectrum Gaming Group has been identifying the most significant trends gaming for the coming year. We work with our sister companies, Spectrum Asia, based in Bangkok, and Spectrum Gaming Capital, based in New York City, to track and understand these trends throughout the year for the benefit of our work with private- and public-sector clients.

Gaming Trends

2017
  1. Significant expansion opportunities are expected to arise as legislation is crafted in Brazil, India and Japan.
  2. Lotteries and casinos will both seek online opportunities — sometimes with competing efforts in the same states and countries, creating competitive challenges that legislators and regulators must sort out.
  3. Casinos will leverage their under-utilized square footage to create special attractions for Millennials, including lounges, entertainment, and skill-based gaming options.
  4. States will attempt to overcome stagnating gaming receipts by proposing new forms of, or locations for, gaming such as retail gaming (i.e., a limited number of electronic gaming devices in liquor-licensed establishments), satellite casinos, and slots at airports.
  5. Proponents of legalized sports betting — including the American Gaming Association, state associations and individual operators — will push their agenda more forcefully as state budgets continue to be strained, and as major sports leagues seek to capture a substantial new revenue stream.
  6. Macau will again become a growth story as gross gaming revenues continue to climb and new integrated resorts open. The mass market will dominate and VIP play will decline to less than 50 percent of GGR for the first time since Macau reverted back to China.
  7. The trend toward private management and, in some instances, private ownership of lotteries will accelerate in various countries and US states.
  8. State legislatures will face pressure to reduce gaming tax rates, as well as to amend or streamline regulations, in response to increasing competition and the potential for saturation in various markets.
  9. More casinos in Las Vegas and Atlantic City will stage eSports events and contests, while Atlantic City will attempt to reposition itself as an eSports hub.
  10. The South will be a focus of casino opportunities, as the potential for legalization and expansion is debated in Alabama, Florida, Georgia and Louisiana.
2016
  1. States weighing legalization, expansion or current performance of 1. With the exception of the Las Vegas market, casino expansion occurring in the Northeast US demonstrates that bricks-and-mortar casinos parallel the gravity-effect of the retail industry in that convenience trumps all else with respect to demand and visitation to regional casinos, further saturating that market. As revenues stagnate or decline, gaming operators in various states will seek tax relief and other remedies.
  2. The legal and regulatory issues involving daily fantasy sports will continue to be prominent in statehouses across the country while the DFS industry moves to implement a self-regulation model in response to challenges to its legality.
  3. State lotteries, seeking grow revenues in the crowded gambling space, will push to sell their games online � and develop games specifically suited for online sales and play.
  4. Atlantic City which faces the likelihood of a 10th straight year of declining gaming revenue will have more clarity by year end, as the future of Revel, Showboat and Drumpf Taj Mahal properties become known and the State of New Jersey tries again to authorize a vote in casinos in the northern part of the state.
  5. More states, seeking to recover or enhance gambling receipts, will follow the lead of Illinois by considering retail gaming, which is the installation of a limited number of electronic gaming devices in authorized establishments.
  6. Junkets and VIP room operators in Macau will be under increased revenue pressure until they change their business model and comply with Chinese laws and procedures for high-value patron play. With four new properties expected to open in 2016 (Parisian, Wynn, MGM, Louis XIII), all eyes will be focused on whether this new supply can grow the Macau market � with revenues expected to stabilize at US$26 billion � or be another factor contributing to its constraint.
  7. Gaming operators will begin to focus their attention on how to attract millennials as an emerging generation of consumers.
  8. The US Treasury Financial Crimes Enforcement Network (FinCEN), Financial Intelligence Units and international law enforcement will continue to aggressively combat money laundering in casinos.
  9. Financial institutions will continue to monitor their casino clients to ensure full compliance with agreements made with banking regulators in the United States and Europe.
  10. Gaming expansion will continue throughout Australia and Southeast Asia, but it remains unlikely that Japan will legalize casino gaming in 2016.
2015
  1. States weighing legalization, expansion or current performance of casinos will have to deal with the impacts of market saturation within and beyond their borders. The national pie will grow slowly, but many markets will continue to be flat or declining.
  2. Asia will continue to be the focal point in global gaming, as governments and developers armed with nine- and ten-figure checks seek to tap the lucrative Asian market, from Vladivostok to Saipan to Cambodia.
  3. Las Vegas will continue to show strength, as it benefits from increasing international visitation, from added non-gaming major attractions such as the High Roller, and from the anticipation under-development major projects such as Genting�s Resorts World Las Vegas and the MGM-AEG arena.
  4. Atlantic City will move toward stability with fewer casino operators and a renewed focus on non-gaming resort development, assisted by state aid. The city will continue to be displayed as an example of the dangers of dependency on gambling revenues.
  5. Macau will continue to be challenged in the near term due to the Chinese crackdown on corruption, and in the longer term due to increased competition in Southeast Asia.
  6. There will be continued expansion efforts in the Northeast US, with movement closer to population centers that will result in more market share shift than new growth, continuing to pressure older markets such as Atlantic City, Delaware and Connecticut.
  7. Flat and declining growth in regional markets will continue to be a driver of M&A activity, spurred also by activist investors.
  8. US and international law enforcement agencies will continue to enhance compliance and enforcement efforts regarding money laundering in financial institutions, casinos in particular.
  9. Tribal gaming will continue to expand, innovate, and increasingly compete on an equal footing with commercial casinos while continuing to push the envelope with off-reservation casinos and Internet wagering.
  10. The convergence of gaming will continue, with casinos, lotteries, i-gaming, social games, pari-mutuel, and bingo offering products that cross into the others traditional space.
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