A question of profits on eSports, fantasy

May 17, 2016 3:09 AM

The world of eSports appears headed toward Nevada sportsbooks. It’s just a matter of time as casino operators and regulators identify the challenges and opportunities that require careful early attention.

Gov. Brian Sandoval’s Gaming Policy Committee was clearly dealing with an issue that was new to most of the group’s 12 members last week as they gathered for the second time this year to consider the steps necessary to keep Nevada on the cutting edge of gaming’s fast-moving evolution.

“This is all new to me,” the governor conceded. Comments of other committee members were similar.

eSports – what is it and who plays it? – was not on anyone’s priority list 15 years ago when Sandoval was chairman of the Nevada Gaming Commission. It is has achieved center stage position as industry leaders have paid increasing attention to the need for new games to attract a new generation of gamblers.

A possibly significant clue about the potential of eSports – playing electronic games professionally – was apparent last month at Mandalay Bay, the site of a big eSports event that drew about 10,000 people to watch the action, possibly to wager among themselves.

The apparent success of that event and others has had casino industry strategists wondering how to exploit this appeal in the future.

Daily fantasy sports was the principal item on the Policy Committee’s agenda when it met for the first time this year two months ago. DFS will probably be the subject of another meeting later this year because, as Sandoval noted last week, the process of change is continuing.

By the end of the year, the Committee will have assembled the conclusions that come from its examination of eSports, DFS and made recommendations that may find their way into new or revised regulations for the 2017 session of the Legislature.

Do fantasy and eSports, collectively or separately, have sufficient appeal to become significant revenue producers for Nevada casinos?

The jury is still out on that question, but the passion with which these pastimes have been greeted elsewhere have the full attention of Nevada businessmen and regulators in a position to influence the shape of things to come.

The impact of fantasy and eSports on Nevada’s number one industry will ultimately be determined by how enthusiastically they are marketed by casinos that now rely on the appeal of traditional games.

Seth Schorr, CEO at Fifth Street Gaming, which owns the Grand just north of Fremont Street in downtown, has eagerly accepted the eSports challenge as he embraces a product that has already helped differentiate his casino from the competition.

“We started positioning the downtown Grand as an eSports destination about a year ago,” he told the Committee. “It gave us a chance to study the preferences and behavior of eSports fans.”

What did Schorr discover? Among other things, they will play regular casino games such as blackjack and roulette. They don’t have much use for craps – maybe it is too much of a challenge – and they definitely have little if any time for the slot machines.

What else? eSports fans are not reluctant to spend money on food and drink but they appear to prefer “food on a stick. They probably want to avoid the sticky fingers,” Schorr speculated.

eSports pros can be considered “cyber athletes” some Committee members asserted. It’s an opinion that if accepted by regulators would probably allow sportsbooks to begin accepting betting action as soon as casinos get the necessary green lights.

Working from a pari-mutuel platform would probably be the best vehicle for sportsbooks to use in the beginning as books develop a feel for the personalities and their skill levels.

“A pari-mutuel approach would lessen the pressure,” Art Manteris, director of sports and race operations for Station Casinos operations, agreed.

Schorr concurred – “it might be a more cautious way in the beginning” – but he said there are companies in the analytics business that could supply helpful insights about regular competitors and their skill levels.

Where the fascination with new casino games goes is anybody’s guess, a realization that has fueled creative thinking at a number of companies.

“We’ve even discussed Tuesday night scrabble,” Schorr said. Which left it to Sandoval to again note, “This is all so new to me.”

Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: [email protected]