Strong growth in table games for June; sportsbook patent wars are coming

Aug 7, 2018 3:00 AM

June is traditionally one of the weaker gaming months for Nevada, so it did surprise some that the state’s June gaming revenues were so high and showed strong growth in table games over slots. In fact, June of 2018 was so strong at $933,004,000 that it is the fourth all-time highest gross gaming revenue month of June in Nevada history, only losing to No. 1, June 2007, No. 2, June 2005 and No. 3, June 2008.

Those watching closely though noticed that while retail hotel room sales were going down, the slack in hotel rooms was being offered to casino comp-status customers. This resulted in slot customers being replaced by table game customers and wham, no surprise, table game results jumped way up and slot results slipped a little.

It is not a new idea, when you have uncommitted rooms in casino resort operations: Gee, let’s offer the rooms or create a comp package for the property’s casino customers and substitute retail hotel customers with comp casino customers.

Yes, hotel sales will go down, but if the right customers are targeted, what is lost in hotel room sales is more than made up for in the casino which, since casino revenue is taxed a lot lower than hotel room revenue, might not be a bad thing from a cash flow perspective.

Sportsbook déjà vu

The continuing recent string of announcements regarding new sportsbook operations and partnerships that will include interactive online and mobile gaming in addition to conventional sports wagering was striking me as if I had heard these announcements before.

Then it occurred to me; these new sportsbook plans tying into online and mobile gaming sounded like the announcements from Cantor Gaming of a few years ago. I pulled a few of Cantor’s (now CG Technology) announcements off the internet from near a decade ago and, except for subject companies, they could pass as current news today.

Clearly Cantor was trailblazing. Sadly for them, if not for the seeming consequence of the actions of a rogue executive that put the company in harm’s way some years ago, they would probably be leading the charge of sports wagering expansion today.

Sportsbook patent wars

Regular readers will recognize that I have mentioned patents as a looming issue on more than a few occasions for the now suddenly growing world of legalized sports wagering. Those comments prompted a reader to ask, “Since sports betting has been around for such a long time how could there be much if anything to patent? After all a sports bet is a sports bet.”

On the notion of a sports bet by itself there is really nothing that could probably be patented but think about what online and mobile sports bets must go through to be made, particularly if away from the traditional casino sportsbook.

For example, if you wanted to make a bet on your mobile phone into a legal sportsbook in the United States, you would have had to set up and fund either (or both) an online or mobile betting account, plus be inside a legal jurisdiction and, depending on how much was won from your betting in any one session, may or may not have to pay taxes to the city, state and federal governments.

While this may seem obvious, guess who, back in 2004, got a patent on using a mobile phone to make legal wagers from or inside legal jurisdictions, which by the way is required to be confirmed in some form of location verification method (patented)?

If the bet wins on big odds, there must be tax reports made and likely that process is automated and, surprise, there is a patent application for that.

Fact is. a little time online doing some patent searches will show several processes and methods to accommodate online and mobile gaming have either pending or issued patents to the people who first submitted those patents defining how to use technology to facilitate mobile and online sports wagering.

Because patent litigation is very expensive, and Nevada was the only place really conducting online and mobile legal sports wagering the risk reward of suing over patent infringements was probably not there. However, now as sports wagering seems destined to be a nationwide offering, that risk/reward ratio just jumped way up for patent holders to either sell their patents or partner with “patent trolls” and sue possible patent violators and infringers for serious dollars.

For some sports wagering operations that were true early technology innovators, there is a very strong likelihood that at the end of the day they could make more money from capitalizing on their early patents than they might from operating their respective sportsbooks.