disaggregation of gaming and hotel assets into separate companies in the late 1990s . Following the Great Recession of 2008 , private equity rescued publicly traded gaming companies , only for those companies to return to being publicly traded businesses again by 2015 . Since then , gaming companies have been bisected again , this time into operating companies and real estate holding companies .
It should be noted that over the same period Indian tribes and First Nations have maintained the most competitive , private ( sovereign ) gaming operations .
Even with all these changes , until the emergence of the global pandemic in 2020 , the core of the industry has always seemed whole . With the exception of gaming equipment manufacturers and a limited number of online gaming and sports betting companies ( which can benefit from having neutral relationships with operators ), everything has been absorbed . A diversified owner-operator in gaming today operates casinos , racinos , online gaming / sports betting , and in many cases distributed systems ( VLTs or HHRs ).
However , since the pandemic , the ability for these diversified companies to compete is more and more reliant on incongruent relationships . For example , do we expect casino companies to own sports teams , media companies to own casino companies , or vice versa ? And is all of this just for an edge in marketing or ultimately for control of data and customer relationships ? Only time will tell .
Issues Amplification : Responsible Gaming and Illegal Gambling . A more nuanced and recent development in gaming is a renewed interest in responsible gaming ( RG ), particularly by regulators who seem to be responding to public sentiment ( if not scientifically founded ) that expanded forms of gaming will increase risk . The industry has been both responsive and proactive , taking the opportunity to reevaluate advertising practices and address the confusing problem gambling helpline structure in the U . S . Simultaneously and congruently , a concerted effort is under way to combat illegal gaming institutions in all their forms ( slot and VGT arcades , online and sports betting operations ) that cut into legitimate gaming company profits and offer no remediation measures to address problem gaming . For our part , The Innovation Group is engaged with the International Center for Responsible Gaming and assisted the American Gaming Association in its research on illegal gaming practices .
Crystal Ball Redux : How to Stay Ahead of the Curve
Six months out from our last review , and six months ahead of our next Crystal Ball discussion , our key finding here is simple : It is more difficult than ever to stay ahead of the gaming business development curve . Trends like blockchain , AI and the metaverse will have a shorter conceptual life within gaming before becoming mainstream applications . It is the behaviors that respond to this more difficult business development environment that will define the future shape and success of gaming .
Of course , our industry is not unique . Most industries are dependent upon adapting to changing technologies and structural realignments . So , what can we do to adapt more effectively to the accelerated pace of change ? Here are two big ideas for your consideration :
Hyper-embracement of the next generation of gaming professionals . There are several programs — The Innovation Group ’ s Emerging Leaders of Gaming ( supported by this publication ), Global Gaming Women and African Americans in Gaming , among others — bringing brilliant young gaming professionals together to share new ideas . These ideas are more valuable than ever in the C-Suite , as senior managers in gaming are younger on average every year . Clearing out some space at the top of the hierarchy in operating companies sooner than later should bode well for more progressive competitors .
Revisit how strategic planning is conducted . The quintessential fiveyear strategic plan is dead . Maybe even the three-year plan is too short . We should be treating strategic planning dynamically , the same way we adapt operating forecasts over the course of a year . Then we will be better prepared to capitalize on opportunities and not be so surprised that the plan on the shelf was not a good indicator of what is happening today .
As we consider the next decade of gaming , The Innovation Group is optimistic for the industry ’ s future value however it is shaped and sized . Most jurisdictions have moved well beyond the stigmas in gaming ’ s past and are looking for ways to generate more and more fiscal revenue through its entertainment-driven experiences . We look forward to the eminent discussions at this year ’ s Crystal Ball session that will further chart the path forward .
Michael Soll is president of The Innovation Group .
Source : The Innovation Group
36 Global Gaming Business MAY 2023