hat is 888’s approach to cashless systems? Could you share some examples that reflect how the pandemic significantly grew the interest in this technology for the gaming industry?
As everything continues to go paperless and cashless, casinos are one of the last frontiers that take mostly cash payments. The land-based gambling industry will need to align itself with that trend. From my perspective, this is another symptom for the digitization of gaming. It would be another milestone to gain the ability to work in an Omni channel approach. 888 has a big e-payment practice that consists of dozens of people who are solely focused on the enhancement of the e-payments suite both locally and globally. This puts us in a great position to capitalize on this trend, not just from a payment perspective but from an overall digital platform aspect.
In June last year, the American Gaming Association released a report providing a framework for regulatory flexibility allowing digital payments on the casino floor. Eilers & Krejcik Gaming analysts said these new payment options could also bring new fraud opportunities. They said the innovation of cashless options far outweighs the issues, but mitigating controls are needed to offset the risk. What would you consider as the best path forward in terms of new cashless or contactless payment options for casinos, and what would be the necessary policies, regulation and enforcement in place to avoid potential new risks and see this massively adopted? How could contactless payment methods help the economy?
The current state of using mostly cash is far more risky than what cashless payments can introduce. For e-payments, you have to open an account and you are vetted by larger organizations. It doesn’t eliminate risk, but it does add a layer of security. This all goes back to the importance of knowing your customers. For example, you can’t use Apple Pay anonymously, but there were plenty of ways historically to commit fraud with cash. With cashless, it’s more complicated and it requires a different and more developed skillset. It’s also very consistent with the demographic and constituencies, if you want to get more people through the door. Younger people just don’t carry cash as often as our older customers.
A recent global study by The Economist Intelligence Unit and TransUnion in October showed that 81% of gambling and casino industry executives find it likely that biometrics will be used to authenticate the vast majority of payments, 82% agreed there are benefits in a national digital ID for fraud prevention in consumer transactions, and that fraud detection and improved security is the greatest benefit to using AI. What do you take from these numbers, and what are your outlooks and approach regarding these trends and their potential uses in igaming?
It all caters to the same purpose of cashless payments. At the end of the day, the goal is to use the NFC chip which can be done in a variety of ways. I think what’s important is to offer your customer a broad range of possibilities to identify him or herself- and enjoy the benefits of doing that. If you want to use facial recognition to log into your loyalty account, for example. It’s nothing different from using biometric passports and ID. Some see it as intrusive, but that balances out with comfort. I think people would favorably consider it if it meant not standing in lines again. Whether it’s payments or connections with the customers, biometrics is all just part of this trend.
Do you think the pandemic is accelerating technological innovation in this industry? Which other new trends, changes or new challenges do you think we will see in the coming months? How have digital tools affected the gaming industry? Do you think emerging technology can become the answer to moving the industry forward; how?
It gave us a sneak preview of what life would look like as we move in a linear direction. I don’t think we will go back to the way it was before but I don’t think things will stay as it is now. In order to survive, the industry has to look five or ten years in the future. Proactivity in modernizing their organizations is the key. Some companies were more proactive, and they enjoyed the fruit of these decisions like Penn and MGM. Those that did not modernize will continue to find themselves in an inferior position. The digitization comes down to making a relationship with your customer. If your customer walks in and walks out of your casino and you didn’t know they were there, you will see many more challenges ahead. Hopefully, the pandemic gave companies a blueprint on how to survive the next decade. Some of these companies need to do it organically, some will have to either buy technologies or companies that will help them get there. As we have seen, some of these digital companies are worth more than land-based operators.
Last year, many land-based casinos in different jurisdictions reopened without poker rooms, and when they did it was under strict restrictions and capacity limits. How has this affected the online poker industry, and what are the situation and trends today? What are your outlooks both for land-based and online poker, and in which specific aspects do you see growth potential, for instance, via leveraging new digital technologies?
The two feed off each other. The value in the end is with online poker. We have seen a renaissance of poker and our biggest value proposition is to connect states to a shared network. 888 is the only platform that operates across state lines and we want to create better ways all the time to play online poker. We have ways for people to pay in-person for tournament tickets, but we also ran online tournaments that had great success. We are looking forward to continuing this symbiotic relationship where land based feeds online operations. The demand has not yet subsided which shows us there is great demand for online poker.
In September, EvenBet Gaming CEO Dmitry Starostenkov told Yogoenet that poker itself has evolved to meet the demands of the modern player, who wants a slick user experience across all channels, especially on mobile, and also requires different game types and entertaining experiences that complement the core product of poker. Would you share the same concepts, or which other new demands of players and evolution features could you identify?
It was a good opportunity to see and experience the pent-up demand for the game of poker, which has seen a challenging few years due to fragmented liquidity. Making sure more and more potential players as well as consumers have access to regulated online poker is the key to its growth. The bigger the potential pool, the better the game will fare. We believe it will be a strong third online product. Often, when people talk about igaming they only talk about casino, but there are only a handful of companies that can develop online poker, and 888 is one of them. We are great believers in this vertical.
In October, GGPoker PR & Content Director Paul Burke told us that live operators might be more receptive to online partnerships, possibly with more big multi-flight live tournaments including online Day 1s, or the reverse. Have you seen any moves in that sense?
There are existing partnerships like ours with SOP. Bally is looking to acquire WTP. There are people rediscovering this vertical and I think that some of the partnership discussions are on pace. However, people must understand that poker is different from casino and sport. It needs a critical mass of players and prizes and is a much more complicated exercise, like how we are going to introduce Poker8. It has to be an appealing and entertaining proposition and the brand certainly helps. Multiflight tournaments, land based tournaments as means of putting land together to register and build the game in order to operate. So digital is different from land-based, the sheer numbers are much different.
In February, 888 partnered with Playtech to add a range of the supplier’s Live Casino and random number generator (RNG) games on its platform. What does this vertical represent for the company, and what progress and performance have you seen in the past months? Could you mention any other verticals that showed significant upticks or shifts these days within 888’s offerings?
888 is one of the pioneers for Live Casino since 2009 and we have recognized the potential of this success. We see it as an integral part of our growth story. We will continue to develop this proposition moving forward and I think there is much of this that can be done in the U.S. market.
888 Holdings has signed three multi-year deals to launch in the U.S. states of Colorado, Indiana and Iowa next year. Are there any updates you can share with us on this new markets for the company? How would you assess the US jurisdictions that have recently regulated their sports betting and online gaming markets, and the potential ones that are actively discussing regulatory frameworks? What’s 888’s focus and approach there?
Nationally, we have three states right now in addition to the ones that we are actively working on. 888 will have a brand footprint in both business-to-business and business-to-consumer. We are excited about the recent developments in various states. For the first time in the U.S., there is a healthy selection of states you can venture into. We are taking into consideration our growth in our path to profitability.