Mobile gaming worries casino operators

Large gaming manufacturers and smaller development studios are rushing to bring for-money wagering products to tablet computers and smartphones, but casino operators in northern Nevada have reservations about the potential impacts Internet gaming could have on brick-and-mortar establishments.

Companies specializing in sports wagering, such as CG Technology (formerly Cantor Gaming) of Las Vegas already have Internet gaming products available to Nevada sports bettors. CG Technology also has a suite of mobile for-wager gaming products that players can access while lounging poolside or in their rooms during their stay at a casino resort.

International Game Technology has an entire division devoted to interactive gaming and has its eye on opening potential markets throughout the United States, Canada and Latin America. IGT’s Double Down Casino currently is the largest online casino on Facebook.

Gaming experts in the Reno area see a day in the not-too-distant future where social gaming for play money will transition to playing for real dollars on mobile computing devices from any location. Some casino operators in northern Nevada oppose such a proposition, claiming that such a radical shift in gaming availability would hamstring their establishments.

In 2013, the state rolled out regulations and a system to license online poker rooms, and casino operators in both halves of the state completed the paperwork necessary to earn interactive gaming licenses that would allow them to partner with software developers so they can host Internet-based poker.

Since the notion of opening the entire gaming market up to online play came about, however, some operators have since changed their outlook.

John Farahi, chief executive officer of Monarch Casino Resort Inc., parent of the Atlantis Casino Resort Spa, is dead-set against widespread Internet-based gaming. Monarch last year announced plans to find a development firm to build and house an online poker portal, but Farahi now is more inclined to keep the entire gaming process entrenched at land-based casinos.

“We were among the first to get an interactive license in Nevada for poker, but that was the purpose; there was only talk of poker,” Farahi says. “We are vehemently against open gaming on the Internet. We think that would be socially disastrous.”

Casino operators fear that gaming customers with unfettered access to slots and video poker from their personal computers or iPads would have no need to visit brick and mortar establishments. Impact at large casino venues such as the Atlantis might be mitigated because the resort offers a wide range of activities that appeal to patrons and visitors, such as its spa, shows and restaurants.

Bringing the casino into the home, or car or workplace also removes the many layers of control on gaming that are standard daily operations for casino security and management teams, Farahi says.

“There is no sure way of protecting kids or others who should not be gambling. In a land-based casino we have security, we check IDs to make sure people are 21, management is responsible, and there is regulation by the state. The social implications (of online gaming) for our state and for the nation are going to be very severe and very costly.”

The potential impacts could be far greater at “neighborhood casinos” — think Tamarack Junction, Rail City, Western Village or the many Dottie’s locations throughout Reno and Sparks. Those small casinos primarily exist to serve gamblers who aren’t interested in heading to downtown Reno or to a large casino resort.

Casey Sullivan, general manager of Tamarack Junction in South Reno, calls the advent of online for-wager gaming “a scary proposition.” Most gamblers have a limit to their discretionary dollars, Sullivan says, and taking that revenue away from a brick-and-mortar establishment could prove costly.

“Somebody being able to play in their car or at home would have major effect on us because they won’t want to come see us,” Sullivan says. “We are just slots and poker, so that would have a major effect on Tamarack and other smaller places.”

Mike Wiltshire, president of New Millennium Games of Reno, likens the advent of mobile for-wagering gaming in the state to Pandora’s box: No one really knows what will happen if it’s opened.

Wiltshire feels the future of gaming in the state will contain a mix of mobile and social gaming that will become an integral part of a casino’s marketing plan.

Some of the ancillary benefits, Wiltshire says, are that casinos can better engage customers through their mobile devices when they enter the casino by offering specials and features catered to their personal tastes, such as seats to shows and meal and room discounts.

Another benefit to widespread mobile gaming, Wiltshire says, is that northern Nevada would become an even larger hub for gaming engineers and software developers.

“This (field) is ongoing and developing, from the games themselves to the technology that delivers those games,” he says. “It requires the same types of people working in Silicon Valley. Those skills levels brought to northern Nevada will increase the tax base. Their salaries are averaging in excess of $80,000 a year.”

The potential impacts on casino operators also could be mitigated by the fact that many people who might prefer Internet-based gambling aren’t the same types of players that enjoy sitting at slots or video poker machines for endless hours, notes Tim Page, chief technology officer of TBD Gaming.

TBD is developing mobile casino solutions for customers in China, Beijing, Singapore and Macau, and it has deals pending with several major casinos in Las Vegas.

Page says mobile gaming and other new forms of wagering merely accelerate a fact casino operators already know all too well: The core business of casino wagering focuses on aging consumers. Page says the emerging market of mobile gaming offers casinos and their technology partners a chance to capture younger generations gamblers.

“They have had this problem for the last 20 years, and they really haven’t yet addressed a way to appeal to the 20- or 30-year-old consumer who isn’t interested in playing slots,” Page says. “And you don’t have 50-, 60-, 70-year-olds with iPhones wanting to play slots on them.

“The slot machine has got another 10, 15, or 20 years and then it’s pretty much over,” Page adds. “The consumers that are coming through aren’t really that interested in sitting in front of a big bulky machine and banging on the buttons.”