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It has become a practice of The Innovation Group to reflect on our analyses from the past 12 months at the end of each year. Our objective is to suss out from among the trends discussed what may be rising or fading, what we expect to sustain, and what we can glean to inform your business and ours in the year ahead.
Early 2023 brought speculation on the possibility of Asian gaming experiencing a reboot, on account of China reopening outbound travel for its citizens, and identified the Philippine casino industry as a leader in the region’s recovery.
Throughout the year, Brian Wyman led analysis of the sports wagering and online sectors. First taking a look at sports betting investments, questioning when and if sportsbook giants would be forced to focus on profitability, and whether spend on player acquisition would be sustainable at then current levels. He offered topline analysis on the PENN Entertainment/ESPN deal and examined the real opportunities for operators considering gaming in the metaverse. Recently, he led The Innovation Group’s analysis of iGaming opportunities and risks for the state of Maryland.
Other TIG partners dove into key interests and expertise as well. In a joint effort with Acorn Environmental, Tom Zitt examined fee-to-trust rule changes and their implications for tribal gaming, while Chris Irwin broke down the continued diversification of tribal economies. Mike Vanaskie provided an update on the Brazilian market, and Kevin Dennis offered perspective on the future of iGaming in Canada. Michael Soll honed in on meaningful short-term trends like reorganization fatigue and the amplification of issues like responsible gaming.
Industry events, whether through programming or their invaluable face time with clients and colleagues, always inspire critical thinking. Indian Gaming 2023 indicated a resurgence of Class II gaming and an opportunity for tribal operators to drive emerging technologies in customer analytics. SBC Summit North America brought insights on recession impacts, M&A incentives, and math and analytics trends. The Caribbean Gaming Show identified an increasingly competitive landscape in the Bahamas and the Caribbean. And our takeaways from the Canadian Gaming Summit included a look at provinces under watch to follow suit on the continued success of private-sector iGaming in Ontario.
Most recently, our post-G2E Insights highlighted confidence in the health of the gaming industry and undeniable optimism building on two years of gradual recovery from the pandemic. Also noted was a continued emphasis on branded slots, renewed excitement about non-gaming amenities, and a shift in interest and excitement from sports betting to iGaming (along with the continued complexity of both sectors for tribal gaming). Of course, it also offered a nod to the latest class of Emerging Leaders of Gaming 40 Under 40, a program TIG continues to be incredibly proud to drive. These trends out of G2E often set a course for the coming year and we expect many of them to gain additional traction.
As we consider the next 12 months for our clients, we contemplate several themes.
At this time, gaming business volumes are trending at pre-pandemic levels in many jurisdictions across the Asia region, and The Philippines is unequivocally the fastest growing gaming market in the Asia Pacific, if not globally. While Singapore has completely recovered and even exceeded pre-pandemic play levels, Macau is pulling up the rear with great promise for next year. Meanwhile, Brazil looks to be authorizing sports betting, an important first step in broader gaming implementation, long anticipated by the industry. iGaming is promulgating throughout Latin America with a notable iGaming bill passage in Peru, and a Chilean bill seemingly moving toward passage. Further, the launch of online sports in Puerto Rico provides some US-centric operators an initial exposure to LatAm – could this mark a strategic shift for them?
We’ll also watch as Indian Country continues planning for iGaming, carefully guarding against revenue leakage to the major commercial players. The continued resistance to online sports in California may offer some insight into what iGaming battlegrounds could look like. Unlike with sports, casino brands themselves stand to be best positioned to launch iGaming given their existing databases and regulatory structures, presenting a far greater upside for tribes. Moreover, with major tailwinds from the Seminole case, we could actually see tribes embracing online gaming in a big, new way.
Meanwhile in the desert, the long-awaited Fontainebleau has opened, featuring a gorgeous hotel, luxury amenities, and a strong Miami-driven array of dining options -- its upscale casino clearly playing a distant second fiddle. It is clear that non-gaming development is driving Las Vegas. But speaking of driving, will Las Vegas recover in year two from the tumultuous launch of its F1 experiment? Will it realize any of the astronomical economic impact estimates touted about F1 and the A’s? How will the mixed feedback from the F1 experience impact future funding for major, non-gaming development? Equally as important: how will the learnings from Las Vegas impact the regional markets, which of late have shown tremendous interest in driving visitation through the addition of marquee non-gaming elements?
And if that isn’t enough to think about, it looks as though credit markets might loosen up by the end of the year after all…
The Innovation Group wants to thank you for your continued trust in our team. As always, it will be interesting to watch the next year unfold and a pleasure to navigate these changes together.
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