The Digital Era in gaming after the COVID-19 pandemic

Our new expert, Solsiree McGowan writes about new challenges and trends the industry has faced and successfully overcome, giving valuable examples of technologies that have been adopted over the last year.

By Solsiree McGowan, Director of Product Compliance at Scientific Games*

Email: Solsiree.McGowan@scientificgames.com

Website: https://www.linkedin.com/in/solsiree-mcgowan-543b90a

When we look back a year ago and realize how much has changed, we can’t help but wonder: was there a silver lining? In the gaming industry, the answer may be yes, there was. Almost a year ago, when all businesses started to shut down due to the pandemic, there was a lot of uncertainty regarding how to move forward. Despite this, we must admit that we made it through and came out even stronger. Despite casinos being closed for three months or more in certain parts of the world, the industry kept pushing to move. Manufacturers found a way to continue to be creative. Independent test laboratories were able to start testing remotely and still ensured integrity and safety. Most importantly, regulators started to open to new ways and new technologies.

Even though the technology has been there, it could be challenging to apply it when the ability to implement the regulatory requirements do not move as fast as technology has in the last 15 years, due to the need for legislatures to approve the changes or for tribes to renegotiate their contracts with states. There are regulations in some jurisdictions that have been in place since the early 2000’s and, definitely, there are several limitations in those regulations that would not have allowed for implementations, such as cloud storage and other Internet-based solutions. However, if there is a bright side to the COVID-19 pandemic, it is the way that the industry has worked together to adjust to the new normal, while still maintaining compliance on the gaming floors.

NEW TRENDS FOR THE ‘NEW NORMAL ERA’

Some of the best examples to discuss when we talk about the Digital Era after Coronavirus are the technologies that weren’t highly implemented, but have found their way to the casino floors in the past year and are here to stay:

1. Virtual Communications

Communication is a very relevant factor for the development of business and activities in any industry. The Digital Era has offered new communication trends that make companies move towards innovative and new possibilities that will favor us all around. The presence of the Internet helps us facilitate the exchange of data and offers the possibility of carrying out our work remotely without having to go to the office. These changes mean that companies are adapting to new communication channels to interact instantly in real time. We observe that the Internet communication currently prevails. This form of communication allows the industry to interact directly with their clients and makes them accessible. In the last year, we have seen several industry events held as webinars and that seems to be the new normal. There have been several platforms that are now part of our daily lives and were not so much in the past. We have daily Microsoft Teams meetings, rely on Cloud services, transfer files and software by uploading to FTP sites, and even provide training in platforms such as Zoom. At the same time, mobile marketing has become a strategic communication channel that is widely used and proved to be quite effective to establish a first contact with customers, as well as helping maintain the current ones.

2. Online Gaming

Since PASPA was repealed in 2018, the United States saw many states starting to draft regulations that allow them to establish their iGaming space. However, this was never an accelerated process, or, at least, it did not need to be. When the COVID-19 pandemic hit and all brick-and-mortar casinos were shutdown, a significant number of states and other jurisdictions around the world shifted from casinos to online platforms in little to no time. The timing of iGaming’s launch was propitious because online platforms provided the only gaming revenue in place of the casinos during several months of lockdown. The thriving iGaming market counterweighs in many ways the substantial decline in retail betting, as most gamblers remained at home even after the casinos reopened due to the health risks. Sports betting weren’t completely unaffected during the pandemic, since most professional sports were also suspended. However, it was quickly ramped up when some of the major sporting events resumed their schedule in June and July, 2020. States like West Virginia, Indiana, Colorado, Tennessee, Michigan, Virginia, Montana, Illinois and even the District of Columbia opened their markets to iGaming in 2020.

3. Cashless Systems

In today’s digital age, it’s not a surprise that cash is no longer the preferred payment choice for American consumers. In fact, based on some recent studies, it’s only used in one in four transactions. Debit card payment is now the preferred payment choice, even over credit cards for retail purchases. Cashless systems are not new in the gaming industry. For several years, slot machines have had vouchers as a means to place wagers by utilizing Ticket In/Ticket out functionality. But now, when the Digital Era is here, cashless systems take a whole different meaning, involving digital platforms that will allow players to open wagering accounts that, in some cases, may be linked to their bank accounts for funding purposes. The framework to allow digital payments on casino floors naturally brings other concerns as well, responsible gaming and Know Your Customer being the most important ones. Nevertheless, several jurisdictions have adopted regulations that aim to address those fears. One of the biggest challenges in the gaming industry is the lack of regulations and technical specifications that allows for the evaluation of these systems, which also represents a task for manufacturers as well, when they want to offer these solutions to casinos. It’s imperative to offer a system that guarantees the integrity and safety of the player’s information, regardless of the environment or technology used. In recent years, many manufacturers have advanced on the implementation of cashless systems that meet the established technical requirements in accepted international standards, and there has never been a better time to deploy them.

4. Electronic Table Games (ETGs)

Electronic table games, ETGs, as they are referred to, are electronic versions of traditional table games. They are, practically, slot machines where players are offered games like Blackjack, Sic-Bo, Three Card Poker, Craps or Roulette. As a replacement for traditional hardware equipment to determine the outcome of each game, ETGs are not different than slot machines, as they also use random number generators and are also subject to the same regulatory testing. However, some can also include Stadium Game setups that combine the speed and ease of use of slot machines with live dealers. These are called ‘Hybrid Table Game systems.’ The benefits for the players and the reason why this technology has become a big solution since the COVID-19 pandemic hit is mainly the fact that the systems are fully electronic, modular, and easily accommodate social distancing requirements in casinos.  ETG games run faster and more efficiently, as computers are handling all the wagers, ensuring higher accuracy and less human contact, even when set up with live dealers. The cash-out process works just like it does in a slot machine, offering players a redeemable voucher when they hit a button, rather than chips. This environment offers players an enhanced feeling of privacy and security over traditional games, while being less intimidating and completely user-friendly. These ETG systems also allow players to bet on the outcome of more than one game at the same time, while using the same game terminal and bet limits are lower for many of the games, making them more accessible. That accessibility and convenience is the true allure of ETGs from a gambler’s perspective. Overall, ETGs have created a win-win scenario for players and casinos as they combine the gameplay of traditional table games inside the casinos while using some of the latest regulated technology ensuring safety.

5. Downloadable Media

For several years, we have downloaded digital content for personal purposes. Downloading is a fairly easy process and there are vast libraries of content available. For example, download books from sites like Amazon, or download movies from subscription services or public domain sites. The gaming industry and the casinos are full of digital content. Slot machines use software, much of which is subject to regulatory testing to ensure its integrity. Casino management systems are built from software-based databases that communicate by using encrypted communications back and forth with the gaming floor to ensure the security of this data, and we can understand why. However, when we refer to downloadable media in the gaming industry, it seems to get a bit complicated, as there are federal, international, and even state laws that impose responsibilities to both cloud computing tenants and providers. To download, you need a device with an Internet connection and a source, but also there must be a process that guarantees there are not vulnerabilities that will jeopardize the security of the network. The main downside with downloading software is the concern that a virus or other malware will hijack a ride onto a device and, therefore, the whole system.

In conclusion, in the Digital Era after the COVID-19 pandemic, we have seen more open approaches, not only from the casino side, but also from the regulatory bodies that will now consider the use of FTP sites, Cloud services and other means to download software that a couple years ago had to be delivered using physical media in jurisdictions around the world.  After a year of the pandemic, when we look back with positive energy and the Digital Era, we realize that, as the great Zig Ziglar would say: “Difficult roads often lead to beautiful destinations.”     

——————————————

*Solsiree McGowan has more than a decade of professional experience in regulatory technical compliance, technology requirements development, and gaming systems security and operations. She is currently working as a Director of Product Compliance at Scientific Games.

With a solid formation in Engineering and Industrial Management, she is also uniquely experienced in technical and regulatory requirements for North America and Latin America. Before joining SG, she has served in key roles with Gaming Laboratories International (GLI), most recently as Technical Compliance Manager, where she led GLI’s Las Vegas and Colorado Technical Compliance departments. McGowan was the direct technical point of contact for several jurisdictions, both in North America and abroad, and managed a large team of Technical Compliance Engineers and Analysts. Moreover, she was a GLI University instructor, and worked with gaming regulators and operators around the world on the establishment of operational controls and technical requirements for gaming technology.