Spectrum Gaming Group Predicts 2024 Gambling Industry Trends

Spectrum Gaming’s Gambling Trends to Watch in 2024

• Cybersecurity: “Despite following internal and regulatory protocols, Caesars Entertainment and MGM Resorts International were impacted by cyberattacks. Are smaller licensed entities in Nevada and other jurisdictions that do not have the resources of major firms more vulnerable to future attacks? Company reputations and consumer confidence are at stake.”
• Big fish will continue to eat the little fish and many will swim away as FanDuel, DraftKings, and BetMGM have established themselves as the sharks. Says Spectrum: The shakeout will continue with closures and consolidation, as both B2B and B2C companies fight to find a niche or challenge the leaders while seeking a path to profitability.” Legalization of igaming and a legislated shift in how gambling can be marketed will have a major impact, the report added. Gambling companies, Spectrum said, will “shift from traditional marketing to more targeted and affiliate tactics. Those operators who are vertically integrated to acquire via such methods will enjoy much larger margins overall, while those that are not efficient in these methods will fuel the growth of a very large U.S. affiliate market, currently dominated by 3-5 groups.”
• The New York State Gaming Facility Location Board selection of up to three bids for full-scale casino licensees will conclude an expensive — minimum $500 license fee — but potentially lucrative process in the United States’ gambling money machine.
• Igaming gains: States will continue to slowly contemplate legalizing online casino while “both the states and retail casino operators remain wary of the potential impact that internet-based casino products could have on retail casino revenue and capital investment.”
• States and the gambling industry will ramp up their fight against “the proliferation of ‘skill’ games and other unregulated electronic gaming devices present in bars, restaurants, gas stations, and other retail locations, as well as in more covert gaming rooms.”
• “Macroeconomic concerns” and the growth of sports betting and potentially online casino in more states will lead to a cautious approach from the industry, “though newly opened markets and verticals should perform well.”
• Jurisdictions like Oregon, Rhode Island, and the District of Columbia that run sports betting through a lottery will contend with additional pressures to balance competition. “What is best for sports betting or the expansion of digital gaming in a state may not be best for lotteries or traditional casinos. States will feel increased pressure to maximize revenues while balancing regulatory integrity.”
• The evolution of icasino and lotteries as “separate verticals” in the expanding gambling industry will be noteworthy.
• Thoroughbred horse racing will continue to decline.
• States remain wary of legalizing ilottery despite encouraging returns from the 12 that have.

How Did Spectrum Gaming Do in Predicting 2023?

Spectrum Gaming’s top anticipated US storylines of 2023:

• Globalization: The purchase of LeoVegas by MGM Resorts International will spur expanded internationalization of the gaming industry with other US operators considering global expansion for technology-based operations. A growing number of European B2B providers will seek points of market entry, including potential partnerships, in the US.
• Horse Racing: States and the industry face monumental changes, starting with adopting and adhering to the Horse Racing Integrity and Safety Authority, which became effective this summer. In 2023, efforts will intensify for horse racing to embrace fixed-odds betting, with the goal of increasing the industry’s fan base.
• Igaming I: An increasing number of Indian and commercial casino operators view pure-play digital operators — those that have no ownership stake in retail casinos — as a threat. This schism among land-based operators will deepen, and digital operators will find it increasingly difficult to maintain business models that both compete against and work with land-based operators.
• Igaming II: Efforts to legalize igaming in the United States will increase, as both retail casinos and independent providers see igaming as a profitable vertical that is gaining adherents in statehouses.
• Lottery: State lotteries and casinos — which have historically operated as distinct industries — will increasingly be viewed as separate verticals within one industry. Lotteries will pursue expansion in both ilottery and the authorization of courier services. Ilottery will focus on instant games, while courier services will center on draw games. This expansion will cause friction, as ilottery instants and digital slot machines will offer similar products.
• Sports Betting: While four more states prepare to launch sports betting, the industry waits for California, Florida, and Texas to follow suit. Operators will seek to lower tax rates in certain states and will pull back on advertising as they focus on achieving profitability. States will take a closer look at the tax treatment of promotions.
• Unregulated Gambling: Continued expansion of gambling devices that are illegal or unregulated is becoming a priority in both statehouses and courthouses, as the operators of what they consider to be amusement or skill games work to protect their growing industry while a growing coalition of casino operators, lotteries, and licensed gaming suppliers seek to shut down what they consider to be unregulated slot machines.