Pulse
American Gaming Association: fresh priorities
By William - 28 February 2022
Bill Miller, President and CEO of the AGA, details the association’s policy priorities at federal and state level after the gaming industry bounces back with record-breaking revenues across the board.
From illegal gambling machines and advertising campaigns through to the Super Bowl and changed perceptions on Capitol Hill, Bill runs through the whole gamut of America’s booming gaming scene.
The AGA’s recent State of the Industry event cited four key areas of gaming expansion in 2022:
- Expansion of legal markets with mobile sports betting (New York, Louisiana, Maryland).
- Launch of new legal sports betting states (Ohio, Nebraska).
- Brick and mortar opening in new markets (Virginia, Nebraska).
- Potential legalisation in new states (sports betting pending in nine states, iGaming in four states).
Whilst the American Gaming Association will continue to focus on gaming’s recovery, Bill Miller says it will also pursue new and renewed efforts to champion responsibility in sports betting – especially as it relates to advertising and marketing – as well as showcase AGA member efforts on ESG issues and advance policy priorities in Washington.
POLICY PRIORITIES
“We want to ensure Washington and the state capitals in which we work recognise the value we bring to local economies. We are still a long way from full recovery. Full recovery for our industry, just as it is in much of the hospitality sector, comes from bringing international and business travel back to pre-pandemic levels.
“Conventions and conferences are really important to strengthening the gaming industry, and to the degree that there is congressional action to help spur and incentivise trade shows, we are supportive of that. It is an election year and typically this means it is quite difficult to move big pieces of legislation, but we’re working on ensuring we are treated the same as everyone else.
“There is a federal sports betting excise tax that has existed since the days of the mob running sportsbooks which is anachronistic and should be eliminated. We are also working with the Treasury and IRS to raise the slot tax threshold of $1,200 – a limit set back in the 1970s and not adjusted for inflation since. We are working hard on drawing attention to these issues in Congress.
“Generally, this industry is state regulated and that is an important differentiator from European countries. We have federalism and states decide what level of gaming they want, and we think that’s a good thing. We support the level of federal engagement being limited.
“By and large, Congress recognises the role that we play in our industry and has been supportive of the 4,000-plus regulators at the state level who understand gaming and the level of gaming each individual state wants in their jurisdiction. They don’t want to usurp that.”
TACKLING ILLEGAL MACHINES
Last year, the AGA released a white paper highlighting the dangers of unregulated, illegal gambling machines proliferating across the U.S. These illegal gambling machines are not subjected to meaningful testing, licensing or regulatory standards and are often tied to criminal activity, including money laundering, drug trafficking and violent crime.
The AGA’s white paper, Skilled at Deception: How Unregulated Gaming Machines Endanger Consumers and Dilute Investments in Local Economies, recommends that law enforcement and policymakers prioritise robust enforcement of laws to root out illegal and unregulated gaming machines.
Miller says that states and communities must not authorise these machines and businesses should actively remove illegal and unregulated games on their properties.
“It’s a really important issue. These ‘grey market machines’ look like a slot machine, play like one and take your money. Somewhere along the line counties and townships have allowed these to proliferate in taverns, gas stations and legion halls. These are not licensed and have no consumer protections nor investments in responsible gambling. Often, they are linked to organised crime.
“What we are trying to do is focus on educating policy makers about the loopholes that exist and, quite frankly, drive better coordination across law enforcement to root these machines out and ensure at local, state and federal level we are able to make a comprehensive effort to get rid of them.
“The operators that offer legal machines are licensed, background investigated and tested. None of these grey market machines undergo these procedures and they subsequently cannibalise the legal machine market and the major investments our members have made in ensuring fair play.
“Law enforcement have looked at one another and asked whose job it is to remove them. The sheriff looks at the county police, the county police look at the state police, and the state police look at the federal government, and no-one has taken the reins to address the issue.
“All the while, people are being victimised and the state is not gaining meaningful tax revenue. Companies like our members that operate with all the costs and regulated frameworks are being hurt financially as a result.”
ADVERTISING
The American Gaming Association is recommending a new approach to national advertising campaigns to allow the use of national gambling helplines. Currently, each state has its own specific requirements for including problem gambling disclaimers in published and broadcasted advertisements. This is an essential service for localised advertising but creates confusion and inconsistency in national advertising.
The AGA’s new policy statement encourages streamlined requirements for national advertising campaigns which would allow operators to improve disclaimer readability and better highlight problem gambling resources.
“There are currently a lot of different helplines and numbers,” explains Miller. “As the gaming industry grows, adverts are becoming national but states still require state-specific helplines in the advertising. What you end up with is an advert with 12 different helpline numbers.
“This is certainly not helpful to the consumer and creates confusion. We have released recommendations to streamline helpline requirements and hopefully we will get to a single national helpline. There are several different groups who have a vested interest in staying relevant and we respect that. However, we also think change would be greatly beneficial to the most important person in this dynamic – the consumer.”
106 million American adults (41 percent) recall advertising related to responsible gaming in the past year—an increase of 32 million people (12 percent) from 2020. Whilst this is a positive step from a responsible gambling perspective, there have been complaints about the sheer number of sports betting ads.
“In terms of responsible gaming, we want to make sure advertising is done in a way that moves the sports bettors away from the illegal market. I acknowledge the complaints but remember what we are trying to do which is move the market away from offshore, illegal websites. That takes awareness.
“The market will rationalise itself in time and has already shown signs of doing so. The beginning of the NFL season saw a mass advertising spend and since the fourth week there has been a marked decline.
“There will be spikes from time to time such as the beginning of March Madness, but I’m convinced the market is and will continue to rationalise itself.”
A RECORD-BREAKING 2021
2021 was the highest-grossing year ever for the US commercial casino industry, reaching $53bn in revenue according to the AGA’s Commercial Gaming Revenue Tracker. The total breaks 2019’s previous record of $43.65bn by more than 21 percent.
Traditional brick-and-mortar gaming led the industry’s recovery, with 2021 combined slot and table gaming revenue totalling $44.94bn, a 6.6 percent increase over 2019’s previous record.
“The gaming industry is bigger than the American airline industry. We have close to 1,000 casinos across the country, and in all of the communities in which we operate, we are oen of the top taxpayers,” explains Miller.
“We are a job creator and a good community partner. Sports betting is now an additional element to the American gaming industry and as it continues to roll out, we don’t face the same opposition we might have faced 20 years ago.”
As an ‘additional element’, sports betting didn’t perform too shabbily last year either. The vertical’s growth accelerated, generating $57.22bn in handle and $4.29bn in revenue – jumps of 165 percent and 177 percent over 2020, respectively.
This was powered by strong demand in established markets such as Nevada, New Jersey, and Pennsylvania, and further boosted by the launch of seven new commercial sports betting markets in Arizona, Connecticut, Louisiana, Maryland, South Dakota, Virginia and Wyoming.
Two new iGaming markets, Connecticut and Michigan, also opened, leading to a record $3.71bn in revenue. Combined sports betting and iGaming revenue for the year totalled $8bn, up 158 percent from 2020, accounting for 15.1 percent of annual industry gaming revenue.
“More Americans than ever now have the ability to legally bet on sports,” comments Miller. “Prior to May 2018, the only place you could legally bet on sports in America was Nevada and what we’ve seen since is incredibly robust growth in the states.
“A legal, safe, and regulated market protects consumers and is recognition of a truism: sports fans like to bet on sports. Why shouldn’t we give them legal options that create consumer protections, tax revenue and jobs?”
Last month’s Super Bowl matchup between the Los Angeles Rams and Cincinnati Bengals saw a record 31.4m Americans bet an estimated $7.61bn on the championship game, according to the American Gaming Association’s estimates.
18.2m American adults were expected to place traditional sports wagers online, at a retail sportsbook or with a bookie, up 78 per ent from 2021. Since last year’s Super Bowl, an additional ten states have gone live, taking the total to 33 states (plus the District of Columbia), 30 of which are operational.
“In the last year, 45 million more Americans have been able legally bet so it is not too surprising about the number of people who have bet on the Super Bowl this year,” remarks Miller.
However, it’s not just new states bolstering the figures. Take Pennsylvania for example. 2022 is the fourth year in which legal sports wagering are available in the Keystone State for the Super Bowl and the third for online wagering options. Preliminary figures released by the Pennsylvania Gaming Control Board show that $68m was wagered in the Commonwealth on the event through retail and online sportsbooks – a 27 percent increase over wagers placed on the game last year.
CHANGED PERCEPTIONS
In 2021, the American Gaming Association’s singular focus was to accelerate gaming’s recovery, primarily through engaging with Capitol Hill and within the Biden Administration to block recovery-slowing policies such as new taxes, support initiatives including the reopening of international travel, and advance industry leadership on BSA-AML compliance.
“There have been a number of big economic and financial packages that have gone through Congress in the last 20 years – from post 9/11 to Hurricane Katrina and the recession of 08/09. On each occasion, the gaming industry was carved out specifically and intentionally to not receive aid because of negative stereotypes.
“Now look at how we were treated by the federal government, both by the previous and current administration, in the CARES Act. It included us in federal relief – from access to loans from the federal reserve and employer retention tax credits to small businesses being able to get loans from the small business administration.
“That was a watershed moment. The gaming industry was being treated the same as everyone else.”
Miller believes the change in perception of the industry on Capitol Hill and the Biden administration stems from how gaming operates its business. “When state legislators consider allowing casinos, what we have shown over decades is that many of the stereotypes that have long been trotted out – property values going down, crime spiralling, low tax revenues, little job creation – are false.
“In every dynamic, the opposite is true. Property values go up, crime doesn’t, tax receipts far exceed expectations set out when legislation was drawn up, and economic opportunities are very strong.
“People see what we look like in the communities in which we operate, and they see a positive economic and community force. Oftentimes we are seeing casino developments in towns that have not seen economic opportunity for many years, such as in areas of Ohio and Pennsylvania.
“These were robust economies 80 years ago that have fallen on tough times. When a casino comes in, they bring in construction jobs first, followed by restaurants, retail, and hotels. This has a very positive spill-over economic effect on the community.
“I’ve been in government most of my life and when I lobby on behalf of this industry and talk about what it is we do, legislators now recognise the benefits.”
