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Casino Industry Trends For 2014

Independent research and professional services company Spectrum Gaming Group has released its tenth annual list tracking 21 leading trends for the forthcoming year in the gambling industry...and the potential of the Asian markets and expansion into the U.S. feature prominently in many of its predictions.
1.  As legislation to authorize integrated resorts in Japan moves forward, major global operators will arm themselves for this major opportunity. This will also prompt possible countermeasures elsewhere in Asia, with the potential for a further domino effect.
2.  Macau is expected to surpass US$40 billion in gross gaming revenue in 2014. There has been no sign of slowdown in revenue growth despite the slowdown in the Chinese economy. VIP play continues to be strong while the premium mass market is expanding quickly. Several operators have proceeded with new developments in Cotai that should open between 2016 and 2018.
3.  Several jurisdictions are exploring liberalizing or expanding their gaming industries. Among them are the Philippines, Sri Lanka, Vietnam and Cambodia.
4.   The potential of the Primorye Gaming Zone in Russia, near the eastern port of Vladivostok, comes into focus as development is well underway in its goal of becoming a prominent Asian gaming center.
5.   European online gaming operators and suppliers will seek mergers or acquisitions with US-based suppliers or properties to gain a foothold in the United States and increase the likelihood of licensure in the United States.
6. Small gaming companies, especially those restructured in the recent financial collapse, will pursue mergers with other small gaming companies to achieve greater geographic diversification, better capital access, and liquidity for its shareholders.
7. More efforts will be underway to authorize integrated destination resorts in Europe. Even though the proposed EuroVegas project has been canceled, other efforts will move forward, with Cyprus being a likely opportunity.
8. Florida will become an epicenter of the gambling-expansion debate, as racetrack operators, international destination resort operators, and Native American tribes make their arguments to a legislature that is unsure if the family-friendly tourist state needs more casinos.
9. Legalization efforts will continue in longtime casino-reluctant states such as Kentucky, New Hampshire and Texas, as those states seek additional revenue streams while trying to stem the flight of  gambling dollars across state lines.
10. States that have achieved peak casino revenues will look to other forms of gaming in addition to i-gaming, such as retail slots, electronic lottery games, airport slots, and small games of chance.
11. The tremendous expansion of gaming over the past decade has resulted in market saturation in many regions of the US. Casino operators will need to focus on organic growth instead of stealing share from neighboring states. As revenues in established jurisdictions stagnate, expect stronger advocacy for Internet gambling.
12. Following in the lead of Penn National, more companies will seek to split themselves into REITs and C-Corps as a way to enhance shareholder value.
13. Fear of saturation in the US will force tougher underwriting standards on loans for higher levered companies.
14. States will continue to adopt i-gaming, with more types of games to assure higher level of play and tax revenues. Small states will seek interstate compacts to provide liquidity for poker. States at the forefront of i-gaming may seek to become i-gaming hubs for national expansion. Expect interstate compacting to roll out much more quickly than it did in the lottery industry.
15. The veracity of geolocation software and the acceptance of i-gaming transactions by credit-card issuers will take center stage as gaming jurisdictions consider adding i-gaming to their gambling portfolios.
16. Social networking and electronic gaming will make further, behind-the-scenes steps toward a convergence that could, at some point, be the "next big thing" in gaming.
17. With i-gaming legalized in Nevada, Delaware and New Jersey, increasing attempts will be made for federal approval of Internet poker, while more states will examine the potential for new revenues from in-state i-gaming.
18. States will continue to seek to eliminate, or perhaps regulate, Internet/sweepstakes cafes, recognizing them either as financially harmful or a revenue source.
19. As more US lotteries consider entering the online market, they will be adjusting their core business model from one that is primarily marketing-based to one that also issues licenses to suppliers.
20. More state lotteries will authorize online ticket sales, and those already selling tickets online will experiment with additional Internet products, perhaps even offering instant games online. In those states without land-based casinos, state lotteries can be expected to take the lead in efforts to legalize Internet gambling.
21. As tribal and commercial operators further consider a move toward online, pressure will increase to reopen compacts to address online and other issues that were not contemplated when compacts were originally negotiated.

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