G2E 2014 Conference Review

*This article was originally published on Pokerfuse Pro. I just got back from attending the Global Gaming Expo (G2E) last week in Las Vegas. While the show is huge with thousands of exhibitors and sessions covering all topics of gaming, this article will cover the iGaming Congress and the two main keynotes by Steve Wynn and Sheldon Adelson.

The iGaming Congress was on the first day of the show (September 29th) and attempted to provide the audience with an update on the status of iGaming globally. Of course being held in the United States much of the talk was focused on this geographic region. I talked with Chris Grove (editor of Online Poker Report) after the show and he felt that there was little value from the iGaming sessions and little was learned. While I do agree, it may be because if you attend all the major iGaming conferences (i.e. iGNA, GiGse) it is usually the same people on the panels saying the same things. Still I was able to take away several points from the four talks I attended.

State of the US iGaming Industry

The first session was moderated by Lloyd Levenson and covered the changing landscape of iGaming in the United States. Panel members included Lauren Hammond of the California Gambling Control Commission, John Connelly of Bally Technologies, Bill Pascrell III, and Dana Takrudtong of GameAccount Network. Mr. Levenson started off making the point that while iGaming in the United States may not have initially met the financial goals many projected, there has been no scandal of underage gamblers, geolocation, or fraud. He continued stating that regulators have done their job. While factually this may be accurate the sample size is small and a larger test will be as iGaming expands and this sector becomes more of a target.

The subject of iGaming in California was brought up and Lauren Hammond said that we can’t begin to predict what elected officials will do. This same sentiment was echoed later by her colleague—California Gambling Control Commissioner Richard Schuetz—in another panel discussion. She continued to state that the biggest issue in California is suitability (i.e. licensing). From a regulator standpoint they want to see all the usual controls (geolocation, KYC, etc…), additionally computer security was mentioned. And in news that surprises nobody she mentioned that if iGaming comes to California it would be limited to poker only.

John Connelly, who in my opinion always comes across as the most knowledgeable on these panels, views the glass as very much half-full and is bullish on iGaming. He believes the key is mobile. Our children are not going to casinos at the same rate as in the past he stated and we need new avenues to attract them. If you have been attending the iGaming conference circuit this is not a surprise and is something Connelly has mentioned in the past. Pascrell also is very encouraged by the roll out of iGaming in New Jersey.

Levenson than asked the panel which is the better model, poker only or other casino games. The unanimous answer was that from a business perspective casino games are the much more profitable route. However, in certain states it is almost certain that it will be poker only; at least initially. The next question he asked was if iGaming should be limited to brick-and-mortar license holders as in New Jersey. Pascrell pointed out that there is no proof of cannibalization. Others mentioned that off-shore operators may be frustrated with partnering, but that may be the route certain states take.

Point of Consumption

The second panel focused on the point of consumption and what was occurring in the United Kingdom which has been documented here in pokerfuse. It was truly an international panel with representatives from Alderney, Gibraltar, Uruguay, Mississippi, and Maryland. Much of the discussion focused on what was occurring in the UK. Approximately 80% of the operators in the UK are not licensed and regulated there. The point of consumption law was introduced on the basis of consumer protection, however, most on the panel seemed to indicate it was for more financial reasons.

Regarding the the two representatives from the US, both repeated that their states were taking a wait and see approach. Stephen L. Martino, Director of the Maryland State Lottery, said they were looking closely at what was happening in Pennsylvania and that the legislature is not clamoring for iGaming as the results from New Jersey are disappointing. Luis Gama of Uruguay claimed they were looking to be a hub for iGaming in South America.

Know Your Customer

The third session was on know your customer (KYC). Luisa Woods of Tropicana said that they have about a 90% success rate with the initial submission. Much of the conversation was around collection of social security numbers (SSN) and how this can be frightening to customers and hinder growth. There was debate over whether an operator needs all 9 digits or just the last 4. Kim Little from LexisNexis said that if you have other information (name, address, birth date, place of birth, and the last 4 of the SSN) it is the same effectiveness as having all 9 of the SSN. This is refereed to as knowledge based authentication (KBA).

I thought an interesting point was brought up by Frank Pracukowski of Foxwoods. Even though they have only a play money site, they have implemented a KYC process so that they would have clean data in their player database. Another site that has implemented KYC even though it is not required is Star Fantasy Leagues in the daily fantasy sports sector. In my opinion, sites like this and Foxwoods will be ahead of the curve when regulation catches up.

The last item I want to mention from this panel is something that Luisa stated. She said that the password requirements required by the DGE were too strict and were causing operators and players issues, and that recently they were loosened. Being in the information security field this was disappointing to hear, currently P@ssword1 is a valid password so not sure about her statement.

Bad Actors

The last panel I attended was the “Bad Actors” panel moderated by Jeff Ifrah. Based on the title and the participants which included regulators George Rover from New Jersey DGE and Richard Schuetz of California Gambling Control Commission. The panel had much potential, but as hard as he tried, Ifrah was not able to extract any new information out of the panel. I suppose this should have been expected as the panel members had to be careful with what was said.

Keynote Addresses

The two main keynotes—Tuesday by Steve Wynn and Wednesday by Sheldon Adelson—were entertaining but not very informative. Wynn was a charismatic speaker who kept the audience engaged. Wynn stated that he shares Adelson’s views on iGaming. I must admit, hearing Adelson make the arguments he did, I question who is advising him. Arguing that with online gaming it is impossible to know who your players are and underage players might have access to the games is completely false as we know KYC technologies are present. In fact it is easier to know your player online than live. A fact represented by the multiple time Sands was fined for having underage players in their Pennsylvania casino. He continued using the example that online players may be under the influence of drugs or alcohol while playing. I guess he has never been to the Venetian poker room on a Friday night. More than anything he came across as a man who does not understand the technology and believes that children are smarter than the operators and will be able to bypass any controls that are present.

Overall it was a great experience at G2E this year and I am looking forward to attending next year.