GGB Magazine May 2023 | Page 34

The

Business of Gaming

Trends shaping the industry of today and tomorrow

By Michael Soll

Here at The Innovation Group , we are fortunate to see the gaming industry from all sides . With that perspective , we have had the honor of organizing and moderating G2E ’ s “ Crystal Ball ” sessions for the past several years , which ask key industry leaders to take a step back and reflect on where the industry is , and where it is going .

Our objective each year is to better understand how historical sectors ( bricks and mortar , parimutuel , lottery ) of the mainstream gaming industry are interacting among themselves , as well as with new and sometimes disruptive influences ( HHR , sports betting , online gaming , media companies ) to inform our audience and clients as they contemplate business development strategies .
Recently , the annual interval for this Crystal Ball dialogue has not been sufficient , as we find ourselves constantly reflecting on the industry ’ s evolution . Besides the swift pace of change , we are increasingly seeing forged relationships between legacy owner / operators and their incoming business threats .
The clearest recent example is the emergence of North American sports betting and online operations , which have made their way into the traditional gaming environment at breakneck speed . But we need not go back too far to recall when parimutuels became racinos and equipment manufacturers began running mini-casinos , which now compete with legacy casino operators all over the world .
In light of this fast-paced change , The Innovation Group has been adapting its approach to research and modeling , and in the process has identified several trends as we outline in the following .
2016 / 2017 : Industry Benchmarks
In 2016 and 2017 , we held our first official conference sessions at G2E attempting to look at the gaming industry holistically . In the graphic on the following page are some of the questions we were asking at that time . And , here are how some of our expectations then materialized :
• Western Europe ’ s first IR was a much-anticipated development , which as yet arguably has not come to fruition .
• Eastern Europe was a wide-open market , but is more restrictive in gaming now than before and also in the grips of regional political turmoil .
• Japan ’ s effort to legalize casino gaming took some time off in 2016 , but it was certainly in the background ( where , practically speaking , it remains today ).
• Australia was moving toward a meaningful expansion of casino licenses . Instead , outside of a few niche markets like Queensland and Sydney VIP , gaming in the region has been stagnant and weighed down by high-profile investigations into corruption as well as fallout M & A rescues .
• In Latin America and the Caribbean , we already were seeing wide casino and online expansion , which continues today , but all eyes were on Brazil IRs , which may still happen one day .
34 Global Gaming Business MAY 2023