Majority of casinos executives expect regulations to improve

While eight out of 10 say regulation is faring “somewhat” (47 %) or “very” (35 %) poorly in keeping pace with change and advancements in technology, 69 percent anticipate that regulators and the industry will find more common ground for improving in the future. Also, an overwhelming majority (88 %) of survey respondents think the regulatory community has become less rigid and more amenable to updating and modernizing regulations than they were a short time ago. 

These are just some of several key findings from the 11th edition of the G2E Future Watch Series, an original research product that highlights current and forthcoming trends within the gaming industry. In this year’s instalment, leading casino operator and gaming equipment manufacturer executives shared their thoughts on regulation and how it impacts various aspects of business for the casino industry and its suppliers and vendors.

“Much of our industry’s success is due to our history of a strong regulatory system, but outdated approaches are hampering both the industry and the regulatory system,” said Judy Patterson, senior vice president and executive director of the American Gaming Association (AGA). “Moving forward, this year’s survey results give us insights into areas where we can make significant reform to strengthen both our business and the regulatory process.”  

The largest existing barrier to constructive regulatory reform, according to respondents, is the belief that regulators do not have sufficient incentive to pursue innovative and forward-thinking policies. Next, nearly two-thirds (65 %) say a significant impediment is the perception among regulators that reform will diminish their responsibilities or leave them with fewer resources to do their jobs; 59 % cite the difficulty in convincing elected officials that reform is a critical issue; and 53 % think a barrier to reform is the outdated mentality of gaming’s former associations with criminal elements. 

Half (50 %) of respondents think the best way to overcome these barriers would be for the industry to improve communications with state and local officials about why reform would be beneficial. Others think the best approach would be to either facilitate the sharing of best practices among different jurisdictions (28 %) or to produce more research on the critical issues involved (22 %).

In terms of which specific regulatory requirements are most in need of reform, respondents agree the need for reform is broad based. Substantial percentages of experts cite licensing requirements, how regulations impact new game approval procedures, and shipping requirements for gaming machines as key areas for reform.

A full 94 % of survey respondents say that casino companies and their suppliers are at least somewhat at a competitive disadvantage compared to other companies in the hospitality and entertainment sectors due to burdensome regulations. A full 95 % agree that gaming companies cannot offer the latest and most innovative products to customers because regulatory approvals and testing seriously delay time to market. Despite these challenges, respondents say tools for reform do exist. In fact, 76 % of respondents say that technology, if used appropriately, can actually lead to more comprehensive oversight with fewer burdens on business operations.    

The rise of online gambling has most experts concerned about the industry’s regulatory capacity. Nearly two-thirds (65 percent) say they are either “very” or “somewhat” concerned that existing regulatory agencies will become overburdened with both bricks-and-mortar and iGaming oversight. Among the challenges they foresee in this sector, 83 percent cite integrating individual state regulatory systems into inter-state systems. A full 41 percent view preventing underage gambling online as a “very serious challenge” in the United States; and another 58 percent say that preventing cheating by players or software programs will be either a “very serious” (29 percent) or “somewhat serious” (29 percent) challenge.

This year’s Future Watch Series was the centerpiece of a panel discussion today at G2E, featuring industry leaders and moderated by Patterson. G2E is the leading trade show and conference event for the international gaming entertainment community, attended by approximately 25,000 industry professionals from around the world. For more information on G2E 2013, visit www.globalgamingexpo.com. 

A total of 17 respondents who are experts in gaming industry compliance and regulation participated in this year’s Future Watch Survey.