hich were the specific factors involved driving Sightline Payments, a FinTech company that provides cashless, mobile, and omni-channel payment solutions for the regulated gaming markets, to invest and acquire a mobile engagement and loyalty platform for the casino gaming industry? And why in this particular moment, amid a new landscape for the industry over one year since the pandemic?
Nearly 60% of casino visitors are less likely to use cash in their everyday lives due to the pandemic. And outside of trends fueled by the COVID pandemic, a mobile-centric experience is one consumers have generally come to expect across their daily lives – whether it is traveling, ordering food, managing their finances, and more. We believe the future of the casino gaming industry will be no different. By adding the talented JOINGO team and their industry-leading app technology live in more than 100 properties nationally, Sightline can deliver a more vertically integrated solution to casino operators.
Could you detail your goals and expectations for this partnership?
We know that enhancing a guest’s mobile experience is the key to cashless gaming adoption in casinos. We welcome JOINGO’s talented team to Sightline to further strengthen our ability to empower the digital transformation of the consumer experience. This partnership will expand Sightline’s well-established, value-added solutions portfolio, strengthening the Company’s focus on offerings that enhance revenue, patron loyalty, and operational efficiencies for its casino operator partners.
Which specific jurisdictions and gaming verticals are you targeting now, and planning to expand into in the short term? Why?
There are two key growth opportunities for Sightline over the next year or so – the first is the continued expansion of sports betting as Sightline’s Play+ solution is a leading funding type for online sports betting payments. With new markets opening in Connecticut, Maryland, Arizona, Wyoming, Florida, New York, and possibly Ohio and Massachusetts, this fall and into early next year should provide real growth opportunities on the digital side. For cashless casinos, we will be working with our partners to transition properties to cashless technology and are working extensively with regulators in Louisiana, Mississippi, New Jersey, Michigan and Ohio on how those solutions come to bear.
With several jurisdictions reopening their land-based, retail gambling venues worldwide, how would you assess the demand for digital payments and mobile solutions? What are the current and new demands from both operators and players? What feedback are you getting from them, and which trends could you mention in that sense?
Today’s casino customer embraces all the benefits offered through their smart phone – they can make restaurant reservations using OpenTable, they can go between properties using Uber, and they can pay their bills while waiting for their room to be ready. On the operator side, at the end of the day, our casino partners want to better understand what their customers are doing and what they want to be doing. By acquiring JOINGO, we are able to deliver a better solution to meet the needs of both the end consumer and of our operator partners by delivering a turnkey solution that provides real-time payment trends to personalize offers, to understand consumer preferences, and to differentiate from the competitor down the street.
Which role is pent-up demand playing in this scenario, both in land-based and online gaming sectors?
Although the pandemic hit the gaming industry hard in 2020, causing a 31% drop in revenue, the industry is back on track after posting an $11 billion Q1 which is the highest-grossing quarter on record. And that’s not all! Commercial gaming revenue in April was up 25% over April 2019, and clocked in as the second highest grossing gaming revenue month ever! This explosion is fueled by rising vaccination rates, an overall positive trend in consumer spending and continuing momentum in the sports betting and iGaming verticals. (All stats attributable to the American Gaming Association).
How exactly could contactless payment methods help gaming operators’ businesses?
Digital payments through a mobile app have the potential to revolutionize loyalty in the casino gaming industry. By adding in the great features that JOINGO has provided through loyalty and marketing personalization along with Sightline’s cashless payment solutions, we can create something that can really provide value to guests and casino operators alike.
In June last year, the American Gaming Association released a report providing a framework for regulatory flexibility allowing digital payments on the casino floor. Eilers & Krejcik Gaming analysts said these new payment options could also bring new fraud opportunities. They say the innovation of cashless options far outweighs the issues, but mitigating controls are needed to offset the risk. How would you guarantee the needed safeguards to avoid those fraud threats and risks, and what would be the necessary policies, regulation and enforcement in place to avoid potential new risks and see this massively adopted?
Cash is expensive for casinos to count, store, acquire, and transport. Players are forced to carry large sums of cash to and from the casino, which creates overall vulnerabilities whether via theft, mishandling, or irresponsible spending. Cash also does not leave a paper trail, paving the way for financial crimes like money laundering. Digital payments can address these vulnerabilities from every angle. Digital payments create a paper trail, giving law enforcement new abilities to trace and prevent financial crimes like money laundering. Digital options empower customers with robust tools to self-govern their own spending and gaming behavior, too. Financial institutions can also put limits in place based on a guest’s risk profile and financial history, which includes restrictions of overall spend using digital payment options. Finally, younger consumers are acclimated to using digital payment options and have come to expect those options wherever they go. The casino industry must modernize to continue attracting younger consumers into the future. Through our experience in the digital space for online sports betting and online casino, our risk of fraud is akin to that of high-end retail.
What are your outlooks in terms of touchless payments in the growing US sports betting market, and other emerging markets boosted by the global shift towards digital channels? Where do you see growth potential?
Consumer interest in sports betting and online casino has grown rapidly, in part due to the expansion of legalized mobile gaming opportunities in many states across the US following the Supreme Court’s 2018 overturning of the federal ban on sports betting. Sports betting grew by nearly 70% and iGaming grew by nearly 200% in 2020. Sightline serves both the online sports betting and iGaming markets, and this combined market is expected to build from $3 billion in total revenue to $22 billion over the next five years. The safety, security, and convenience of use within digital gaming channels has also contributed to this massive increase in consumer interest and casino operator demand, generating tremendous sales growth for Sightline’s solutions overall. Sightline is well positioned to transform the broader gaming industry’s $250 billion revenue market, which continues to increase as more jurisdictions legalize new forms of gaming.
Which emerging technologies are you working with in order to enhance your product offerings? What is your approach to blockchain-based payments?
Certainly there is a great deal of chatter regarding cryptocurrencies across the payments landscape. There remain concerns around AML, KYC, and source of funds in that realm that give gaming regulators pause. Sightline will continue to innovate and be at the cutting edge of payments technologies – while also ensuring that we are bringing to market solutions that gaming regulators would deem permissible in their jurisdictions.