David Copeland, CEO of Findmyexpert, talks through some of his key takeaways from G2E Las Vegas, including the huge opportunity for consultants.
As the Findmyexpert team touched down at Las Vegas’ McCarran International Airport earlier this month, it was immediately clear that this would be the most hotly-anticipated Global Gaming Expo since the annual event was first hosted back in 2001.
The expo, more commonly known as G2E, is a chance for gaming execs from the US and beyond to gather in Vegas and discuss the state of our industry.
Of course, the 12 months since the event was last hosted have seen a monumental shift in the landscape of the US gaming industry.
The Supreme Court’s decision in May to repeal the federal ban on sports betting – PASPA – has opened the gates to the biggest gaming revolution of a generation.
It is still early days, but with things already moving at breakneck speed – at the time of writing, legal sports betting is now live in six states including Nevada – the stage was set for the most important G2E ever.
Teeing things off
Before we got down to the serious business of the conference, there was the small matter of the inaugural BettingJobs Golf Classic to resolve.
A couple of weeks earlier, the best golfers from the US had travelled to France to take on Europe in the Ryder Cup.
With the Americans determined to exact a degree of revenge, and the Europeans keen to remind our colleagues across the pond of the recent Ryder Cup victory, the scene was set for a fantastic day’s golf under the Las Vegas sun.
While the standard may not have quite matched that seen in Guyancourt at the end of September, it was nonetheless a great opportunity to catch up with old friends and meet some new faces ahead of the conference.
We would like to thank BettingJobs.com for hosting the event, and we look forward to seeing everyone again next year.
A different type of show
Despite the encouraging steps the US iGaming sector has taken in recent months and years, it is worth remembering that G2E Vegas is still a significantly smaller show than London’s annual ICE exhibition, and in turn boasts a far smaller section dedicated to online gaming.
With US gaming long dominated by the land-based giants of Las Vegas, as well as other casino suppliers and operators from regional hubs like Atlantic City, the feel of the show remains distinct from that of ICE.
But it is clear that this is gradually changing. Encouraged by the tangible progress online gaming has made over the past 12 months in the US, there were considerably more Europeans attending the show than in previous years.
Indeed, all the major European platform providers were present, showing off their physical terminals which are suddenly in high demand from land-based casinos across the US who are now in a position to offer a sportsbook for the first time.
All attention on sports betting
It was no surprise that sports betting was the issue on everyone’s lips. In fact, it was tough to find a discussion taking place at the Sands Expo that didn’t involve it.
Of course, there was plenty to be excited about. New Jersey, something of a bellwether state for US sports betting, is performing incredibly strongly in its opening few months.
At G2E, the head of the New Jersey Division of Gaming Enforcement, David Rebuck, promised delegates that they would be “stunned” by the numbers due to be reported for September.
When these figures were eventually released, they showed the state had almost doubled total wagers on August, up to $184 million from $95 million the previous month.
Meanwhile total revenues for the state from sports betting were $24 million, up from $9 million in August.
Against this backdrop, delegates at G2E were treated to a range of sessions from the brightest minds in US sports betting, as well as a number of interesting perspectives from further afield.
Among the highlights of the show’s ‘Sports Betting Symposium’ were sessions on the legal ramifications of the Supreme Court’s repeal of PASPA, a look at how states and tribes are preparing for legal sports betting, and a session exploring how sports betting works in regulated markets.
The Findmyexpert team had the pleasure of catching up with people approaching US sports betting from all angles: casinos, tribes, European operators, suppliers, consultants and legal services to name just a few.
What was common among all – other than the palpable excitement – was that the key issue facing everyone is trying to find staff to scale up quickly enough to meet demand.
It is no secret that running a sportsbook is a costly undertaking, even if the potential rewards are there.
A quick glance at the BettingJobs.com Salary Survey shows that the average cost of staffing a sportsbook can top $1.7 million per year, and that’s before additional functions are added, such as an in-house trading team, which can set operators back somewhere in the region of $600,000 per year.
Hiring for key sportsbook roles – such as head of sportsbook ($170,000 per year), compliance manager ($85,000 per year) and VIP manager ($50,000 per year) – does not come cheap.
What we were hearing among delegates in Vegas was that such is the shortage of quality hires for these positions, those that are available are now demanding a significant premium.
Given the difficulties of bringing expertise in from overseas in the current political climate, those with sportsbook experience and the right to reside and work in the US are in a strong position.
One alternative, of course, is to use a platform such as Findmyexpert.com to engage world-class consultants on a project-by-project basis.
This approach not only saves costs, but avoids much of the hassle associated with full-time hiring. When done well, the expert will ensure their knowledge is transferred to your local team, strengthening your operation as a whole.
There is certainly appetite for project-based consulting within the nascent US sports betting sector, although it was clear many operators are currently focused on full-time hires.
Over time and as these operators become more established, expect to see many turn towards consultants to take their products and operations to the next level.
Lessons from the Old World
We have already noted that this year’s G2E was heavily attended by European gaming execs keen to get a better feel for the sports betting climate in the US.
Traditionally, the iGaming segment of G2E Vegas has been small. The global online gaming industry tends to treat London’s ICE and Amsterdam’s iGB Live as its key events.
Of course, iGaming and sports betting were in greater focus this year, and a recurring theme of the event was to look at the lessons US sports betting can learn from Europe’s more mature sportsbook sector.
Chatting on the show floor with operators in states that are already live with sports betting, it is clear there are some significant differences.
One operator noted to Findmyexpert that margins and bet sizes were both higher than the average in Europe.
This makes a lot of sense. We are in the very early stages of a US rollout and we are seeing a lot of novice bettors wagering parlays, which is resulting in high-margin wins for operators.
In Europe, operators have, for many years now, targeted significant marketing spend at attracting the ‘casual punter’, that is the customer who might place only a single €10 bet on their favourite football team each week.
On the margin front, it is typical for these to begin to fall as competition ramps up. With only a handful of operators live in those states with legal sports betting, it is unsurprising margin remains high.
Margin and bet size are just two examples of how Europe and the US already differ, but the conclusion at the show was that a whole new approach will be required to succeed in the market.
While lessons can certainly be learned and applied from Europe, rolling out products and techniques that have worked on the old continent and expecting instant success in the US will not be enough.
Given that sports betting is regulated on a state-by-state basis in the US, local knowledge and flexibility to legislation and tax rates will be vital.
This will impact numerous aspects of operations, from the products that can be offered to the way they are marketed.
Of course, multi-jurisdiction operators and suppliers in Europe are not unfamiliar with this requirement, having observed the continent move away from the dot.com, Malta licence model towards a dot.country model over the past five years.
Just as an operator must abide by different tax rates and regulations in the UK and Spain, so they will have to in Pennsylvania and Delaware.
Regardless, finding a way to leverage the experience of Europe to ensure a healthy sports betting sector across the US will be one of the primary goals over the coming years.
While sports betting was certainly the focus in Vegas, it was not the only issue that caught the Findmyexpert team’s attention.
We enjoyed a wide range of sessions, discussions and presentations which showed off works across the full spectrum of gaming.
Among the highlights were a keynote from Emmy Award-winning broadcaster Sharon Delaney McCloud on building a greater executive presence for women within gaming.
It is no secret that gaming has had to take a long hard look at itself over recent years in terms of creating a greater equality of opportunities for women, and McCloud’s speech was well received by delegates.
Elsewhere there were dedicated tracks on everything from tribal gaming to marketing to security.
As ever with large conferences such as G2E, some of the most interesting discussions happen away from the official tracks.
This year Findmyexpert engaged in some interesting chats around eSports, cryptocurrency and virtual reality – three exciting new fields which have the power to transform the global gaming landscape over the coming years.
Patience is virtue
So, what was our key takeaway from our trip to Vegas?
Aside from some useful tips on our golf swing, it would probably be the importance of patience in the US.
Since the repeal of PASPA, there has been something of a frenzy around US sports betting. It is easy to get carried away by the sheer enormity of the opportunity.
But those who ultimately succeed, as was clear at G2E, will be those who are here for the long haul.
Certainly, there may be opportunities to make a quick buck along the way, but what was heartening to see at G2E was the seriousness and responsibility with which our US colleagues are going about building a sustainable sports betting sector.
Of course, mistakes will be made along the way. We heard at the show of one new operator having to pay out an $80,000 sum as a result of a computer malfunction which had incorrectly offered a lucky customer out of line odds.
But these minor hiccups are to be expected.
The progress made in just a few months since PASPA was repealed has been nothing short of staggering.
To think about how the US sports betting industry will look in one, two or five years is even more exciting.
It is going to be a fantastic journey, and we look forward to joining our friends at G2E 2019 – and indeed at other trade shows around the world beforehand – to make the next steps.