Global Gaming Expo shows growth as industry deals with many issues

Although most might think the gaming business is confined to the borders of Nevada and New Jersey, the commercial casino industry consists of 513 casinos in 23 states, with 34 percent of the total U.S. population visiting a casino last year.

Over four days, thousands of industry executives and employees gathered for this year’s Global Gaming Expo.

Held Sept. 23 to 26 at the Sands Expo and Convention Center, the trade show and conference attracted more than 27,000 attendees and 460 exhibitors covering more than 286,000 square feet of exhibit space.

The show included international exhibitors from 32 countries, according to the American Gaming Association. G2E made its debut in fall 2001 as the first and only gaming trade show designed “by the industry, for the industry.”

This year’s show also marked the first time G2E was held without the American Gaming Association’s longtime leader, Frank Fahrenkopf. Fahrenkopf retired in June after 17 years as the association’s president.

Geoff Freeman was at his first G2E as American Gaming Association CEO. He said his Washington-based trade organization will step up its effort for federal passage of online gaming legislation, although he held little hope of the issue gaining traction in Congress.

Freeman said Americans are spending $2.6 billion on illegal offshore wagering despite the April 15, 2011, crackdown on Internet poker by the Justice Department.

Freeman said the association wants a federal solution to online gaming because it will set minimum standards for consumer protection, create a regulatory framework and provide a method to prosecute illegal operators.

“It is past time for policymakers to put necessary safeguards in place,” Freeman said during a media briefing before the trade show began.

Freeman wasn’t the only lobbyist to express displeasure with Congress.

“They’ve been very busy in Washington this year,” said John Gusik, founding partner of the Franklin Partnership, a Washington, D.C., law and government relations services firm. Gusik moderated a panel discussion on tribal gaming on the expo’s final day.

“There have been 4,500 bills in Congress this year; only 31 have been enacted,” Gusik said. “It’s a do-nothing Congress. Seventy-two bills dealing with tribal issues and none have been enacted. Internet gaming continues to languish in Congress.”

Pete Kirkham, president of Red Maple Consulting, a Springfield, Va., government affairs and political strategy firm, said that as of Sept. 30, Congress hasn’t passed any of the 13 appropriation bills needed to fund the government.

“If you represent tribes, they think you must work on Indian gaming all the time,” Kirkham said. “Gaming takes up some time but it’s also about health care, education and housing.”

Kirkham acknowledged that the vast majority of a tribe’s revenue is earned through gaming, but said those dollars go to providing services to the community.

The National Indian Gaming Commission reported $27.9 billion in gaming revenue in 2012, up 2.6 percent from $27.2 billion in 2011.

“Everything is now seen through the prism of gaming,” said Jana McKeag, president of Lowry Strategies, an Alexandria, Va., government and public affairs consulting firm. “Congress believes that tribes have all this gaming money … why do they need (federal dollars)?”

McKeag noted that gaming revenue was a replacement for “a tax base.”

Although tribes and commercial casino operators face challenges from a gridlocked Congress, several of the industry’s top executives mostly agreed on topics ranging from recent gaming industry consolidation, market growth and online gaming.

“The challenge for us right now is the consumer,” Isle of Capri Casinos CEO Virginia McDowell said. “The consumer is still skittish and trying to protect their pocketbook. We have to figure out how to be profitable when people aren’t spending as much.”

Penn National Gaming President Tim Wilmott, Pinnacle Entertainment CEO Anthony Sanfilippo and Holly Gagnon, president of the Pearl River Resort for the Mississippi Choctaw tribe, agreed that consumer spending remains a hurdle for casino operators.

“Our customers are not just gamers,” Sanfilippo said. “Customers want a quality experience in the food and beverage, hotel and entertainment offerings.”

Much of the discussion, moderated by political commentator Jon Ralston, focused on expansion into new markets, but also focused on the potential of Internet gaming legalization leading the charge.

Wilmott said most of the U.S. market has plenty of casino development. But there is still room for expansion into a few underserved states, such as Texas and Florida.

“It’s getting harder and harder to find places to invest that make sense because markets are getting saturated,” McDowell said.

Ultimate Gaming CEO Tobin Prior, whose Station Casinos-owned company launched Ultimate Poker in Nevada on April 30, said without a Congress agreeing on a federal solution to legalizing and regulating the activity, regulation in different markets will be a significant hurdle to overcome.

“We are prepared to operate state-by-state, and we’re moving forward state-by-state,” said Prior, whose company has a deal with the Trump Taj Mahal in Atlantic City to participate in New Jersey’s planned online gaming market.

Panel sessions during the conference focused on the possibility of sports betting in New Jersey, fantasy sports, women in the gaming industry, tribal gaming, nongaming amenities, and security and surveillance.

Gambling isn’t the only reason thousands of industry executives spent the week in Las Vegas. Nongaming amenities continue to be an important and growing part of the consumer experience.

The trade show let casino executives experience the latest trends in food, beverage and hospitality to enhance the experience and build customer loyalty. From dedicated hospitality panel discussions to a pavilion featuring dozens of exhibitors, G2E also featured a cocktail lounge and a uniform fashion show.

“We have a 5,000-square-foot exhibit space with some 60 suppliers here,” said Tracy Walters, manager, corporate events with Sysco Corp. “It’s a chance for the industry to see and taste the latest in food service trends.”

The latest trends in casino food include unique items like duck salami, ramen imported from Japan, and stingray patties. Yes, that was a stingray patty being hawked at the food show.

“They are delicious and only 80 calories,” Ryan Smith, a sales account executive with Marlees said. “They are in production and we are testing them here because the gaming business likes unique items.”

Meanwhile, a majority of casino executives are optimistic about the industry’s future, especially when it comes to improved regulations, according to the 11th annual G2E Future Watch survey.

Although 47 percent say regulation is faring “somewhat,” or 35 percent say “very” poorly, keeping pace with change and advancements in technology, 69 percent anticipate regulators and the industry will find more common ground for improving in the future.

Also, an overwhelming majority (88 percent) of survey respondents think the regulatory community has become less rigid and more amenable to updating and modernizing regulations than they were a short time ago.

“Much of our industry’s success is due to our history of a strong regulatory system, but outdated approaches are hampering both the industry and regulatory system,” said Judy Paterson, senior vice president and executive director of the American Gaming Association.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893. Follow @sierotyfeatures on Twitter. Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.