or the sixth year, Spectrum has compiled this list that addresses ongoing changes in technology, demographics, politics and regulation to determine the most significant trends. New Jersey-based firm has experts around the world, and tracks these and other trends in its award-winning newsletter Gaming Industry Observer.
"This year's list represents one of the more dramatic departures from the past, largely because the Great Recession has dramatically, and in some cases permanently, altered the landscape," said Michael Pollock, managing director of Spectrum Gaming and publisher of Gaming Industry Observer.
Spectrum Gaming Group Top 21 Trends for 2010 are the following: Cities that compete for national and regional conventions and meetings look to gaming as a competitive amenity, thus creating a new catalyst for casino expansion. Besides, consumers continue to "deleverage" their personal balance sheets, paying down debt and increasing savings. This will make it more difficult for casinos, particularly destination resorts, to reach pre-recession revenue levels.
Other trends will be: continued conversion of racetracks to racinos, particularly in states that border gaming states, such as Kentucky and Massachusetts. Corporate and property debt restructuring in wake of declining revenues, including deleveraging through the disposition of non-essential assets, creating entry points for new operators. Additionally, existing racinos that are struggling under tax burdens seek tax relief as well as other forms of growth, such as table games.
The research also pointed that: Increased legislative acceptance of allowing the deduction of issued electronic promotional gaming credits from the gross revenue tax/fee calculation and that increased use of electronic table games, particularly in slots-only states, while full-service casinos begin to seriously introduce such games as entry-level, low-cost options.
On top of that, increasing reliance on non-traditional sources of financing, such as private equity, as traditional lenders and investors shy away from gaming. This is tied partly to a growing number of former investment bankers in gaming who are developing new firms able to identify and encourage such non-traditional sources.
With regards to online gaming, Internet gambling in US will rise on the agenda for the new administration and Congress; gaming companies will begin to align in favor of legalization.
Another point considered sees that major operators will seek new sources of revenue, including outsourcing brands and loyalty programs, which would also increase cross-market opportunities.
Major tribal operators will seek new opportunities in commercial gaming to boost their brands and leverage their loyalty programs and the low tax rates at their home properties.
Off-reservation gaming becomes an increasingly heated issue in Washington and in state capitals, with existing tribal operators staking out positions on both sides, seeking to lobby the Obama Administration to either retain or amend the Bush policies limiting such casinos to within 50 miles of the reservation.
In Asia, opening of integrated resorts in Singapore becomes catalyst for counter-moves in the continent, starting with potential expansion in Taiwan, while China takes steps to protect gaming in Macau.
Spectrum also considers that the recent moratorium on development of big-box gaming resorts in US due to economic downturn evolves into a long-term clamp down. Whether such big-box plans re-emerge is dependent on improved access to affordable capital, as well as on performance of CityCenter in Las Vegas.
Relative strength of regional, convenience-based casinos continues to advance public acceptance of gaming as a form of entertainment. Besides, server-based gaming, which some are trying to repackage as networked gaming, rolls out in fits and starts, with some operators investing in smaller offerings that include some server-based advantages, such as yield management.
In US, states seeking new sources of revenue in continued fiscal crisis look to new forms of gaming, such as VLTs in taverns. Additionally, suppliers focus on areas of proven popularity, such as communal gaming and by expanding offerings tied to their own libraries of proven brands.
The debate on tax rates in emerging and existing casino states heats up, as existing states consider ways to protect their domestic industries while emerging states debate whether rates should be set competitively to encourage capital investment.
The demographics of gaming in major markets, particularly Las Vegas, shifts as lower-income adults step in to take advantage of continued downward pressure on room rates, packages. Finally, Wall Street securities firms become less of a driving force in gaming, a result of cutbacks in coverage of gaming and the emergence of smaller, more responsive firms willing to fight for that business.
For the complete six-year list, visit www.spectrumgaming.com/trends.