The Future of Gaming Technology

In publishing gaming trade journals for years, CEM and its publisher have read and written about various gaming trends often throughout this time. When we thought about how to tackle this “future of gaming technology” article, we decided to take a look back at various predictions from years past. Going back a whole decade, there has been much buzz about server-based and server-supported gaming. Even 10 years ago, thoughts were that it was imminent and hurdling toward reality. However, as we sit today, this is not yet an embraced reality.

There was similar excitement about i-gaming years ago. However, when the Bush administration passed the Unlawful Internet Gambling Enforcement Act in 2006, much development on this front ceased, at least from a business perspective in the United States. But with the stark reality of a long economic recovery and budgetary shortfalls, there seems to be a change of heart.

So we turned to the experts to give us the answers—or their best predictions. Listen to essays from suppliers, associations and other professionals, weighing in on what they think the reasons are that SBG has not yet been aggressively deployed in gaming, as well as how long it will be before we see U.S.-based i-gaming operations and what its impact might be on traditional brick-and-mortar operations. Their responses were thoughtful and candid, and we think each has an interesting perspective to share with CEM readers and the industry as a whole. Listen and join the discussion!

Gavin Isaacs, CEO, Shuffle Master

The real reason SBG has not yet been aggressively deployed in gaming is that it still doesn’t make financial sense for the operator, and the player doesn’t see the benefits yet. From a casino’s perspective, the investment is quite significant and it will take time to implement. From a player’s perspective, server-based gaming doesn’t truly offer anything different, so it hasn’t attracted new players. Further, the many complex proprietary protocols and platforms, coupled with the regulatory environment, haven’t made it any easier. In theory, server-based gaming makes sense, but the reality is that the infrastructure needed to support server-based gaming is a huge commitment with benefits that are largely unproven at this point. Wiring an existing casino floor to accommodate server-based technology is an expensive proposition for many operators, particularly in this environment. It isn’t realistic for many operators but where it may make more sense is for a new opening, as we saw with Aria Resort & Casino (which is actually server-supported), where a complete overhaul of the slot floor is not needed. However, in the last three years, we have seen a lack of new openings hence very limited opportunity for server-based gaming.

We’re seeing the technology-evolution drive change in the way our customers do business and we’ve definitely seen how it impacts the player universe, so I would not rule out server-based gaming in the future. In gaming, big shifts like this take time to gain acceptance and, because of the regulatory environment, can take longer to implement than other industries.

I-gaming is legal in many jurisdictions globally. For many years, brick-and-mortar casinos believed that i-gaming would cannibalize their business by converting customers who typically visited live casinos into stay-at-home gamblers. But given i-gaming’s rapid growth and the substantial dollars generated by the U.S. on an annual basis, we’re seeing more and more land-based gaming operators changing their minds and positioning themselves for the legislation of i-gaming in the U.S. I believe that online poker will be the first to be approved in the U.S., and the effect will be material given what we heard about the number of dollars that have gone overseas. Many major casino operators, including Caesars Entertainment and Rank Group, have been looking at online gaming as a way to increase market share by reaching customers who may not ordinarily gamble in a live casino. Land-based and online players are, for the most part, different. Land-based casino operators will need to maintain existing customers, cater to the new online customers, and hopefully develop bridges between the two. If land-based casino operators are successful building synergies, the new player base will be a definite bonus and create incremental revenue.

As a supplier, we plan to use the same strategy we use with land-based casinos: license our brands to operators. It is important that the play-for-fun and play-for-real versions of our games feel authentic and replicate the live experience as much as possible as to encourage cross-over and to also maintain brand consistency. The Internet is a way of life for Gen X and Gen Y. Digital media trounces most traditional channels among these Millennials so it will be inevitable that, over time, gaming evolves to fully cater to this group. We’re already seeing what a powerful tool social media can be for player outreach and casino promotions.

As the popularity of both gambling and the Internet continues to grow, online gaming is undoubtedly an exciting frontier and a promising area of expansion for the gaming industry.