Sports kiosks pose no threat to casinos

For something that generated only $600,000 in gross revenue last year, sports betting kiosks in bars and taverns sure have gotten a lot of attention lately.

The Nevada Resort Association (NRA), which represents many big casinos, is trying to kill the kiosks in this legislative session, pushing bills in both the Senate and Assembly. The bars and taverns, along with William Hill, the sports betting company that operates the kiosks, are trying to keep the kiosks, but it is an uphill battle in Carson City.  The NRA has assembled an all-star lobbying team and they are leaving no stone unturned. 

Simply put, the NRA is trying to squash what they view as competition.  We don’t agree that the kiosks are competition for the big casino sports books, but they are entitled to their own opinion.  However, they are not entitled to their own facts. There have been a number of misleading “facts” put forth by the lobbyists for the NRA.

Fact No. 1 — There is no evidence at all that sports kiosks in your local bar take away any business at all from Big Casino. Last year, sports betting handle (the amount wagered) grew in Nevada by 20 percent, to $3.45 billion.  Sports betting win (the amount won by the casinos) also increased 20 percent, from $140 million to $170 million. The kiosks accounted for $600,000 of that win; the other $29 million increase in win went to casinos. Far from being hurt by the sports kiosks, casino sports books had a great year.

Fact No. 2 — There is no evidence at all that sports kiosks are likely to hurt Big Casino in the future. Last year, Delaware expanded its NFL parlay betting from the three casinos to 31 lottery retailers.  The result?  Statewide handle was up 40 percent, while the casinos themselves were up 7 percent.  Not one casino in Nevada has had to lay off one employee because of the perceived competition from the sports kiosks and no NRA member will testify under oath to the contrary.

Fact No. 3 — There is nothing at all to support the notion that sports kiosks will deter major investments in big casino resorts. Just last month, Genting announced they were going to build a multi-billion dollar resort on the old Stardust site. That is exciting news for Las Vegas. Genting did not condition that multi-billion dollar investment on eliminating sports kiosks at your local Wahoo’s Fish Taco or Bounty Hunter Tavern.

 Fact No. 4 — Sports kiosks are not a new phenomenon. They were introduced by NRA member Bally’s in 2004. Even before that, Station Casinos, another NRA member, introduced the ability to bet sports from your home computer in 2001. While you had to go into a casino to open your account, you could then bet without going near a casino. Somehow that was OK, while going to a bar to open and fund a sports betting account poses a grave threat to Big Casino.

Fact No. 5 — Gaming technology evolves over time and it is vitally important that Nevada continue to move forward with innovation to meet the expectations of our customers, rather than take a major step backwards.  Nevada has gone from requiring people to wager in person in a casino, to allowing sports bets on home computers, kiosks and mobile phones, to playing Internet poker in their bedroom. Sending in the trucks to take out the sports kiosks at local bars and taverns will be going back in time when technology is moving forward. 

Fact No. 6 — Sports kiosks are not “gaming devices” as that term is defined by Nevada law. They have long been considered “associated equipment” by the Gaming Control Board, which has approved their use in bars and has approved all equipment and procedures for sports betting in those bars. A gaming device is something that determines win or loss, like a slot machine. The kiosks don’t determine win or loss; they provide a way for a customer to transmit his or her wager to the bookmaker’s central office, the same function performed by your iPhone, iPad or home computer. If a kiosk in a bar is a gaming device, so is every smartphone in the place.   

Fact No. 7 — There is nothing in the public policy of Nevada that is inconsistent with sports kiosks. It is now OK as a matter of public policy in Nevada to play Internet poker in your bedroom, but it is somehow against public policy to bet on a basketball game at your local tavern?  If anything, the protections against underage gaming and other ills are far stronger in a bar than the anonymity of someone’s bedroom. Because a person transmitting a wager from a kiosk must have an account, we know our customers. There is no anonymous cash wagering at the bars as in casino sports books.

Fact No. 8 — Killing the kiosks will kill jobs.  William Hill employs people to work on the kiosks. We won’t need Mark Keller to go around and empty the money from the kiosks if the kiosks go away. Kiosks are important to bar owners and their employees since they keep people in bars longer, spending more money eating and drinking, which translates into more jobs for bar staff. On the other side, there is no evidence at all that sports kiosks have taken away one job at any Big Casino.

If the kiosks are removed from local bars, you can bet that two things will happen: Some people just won’t bet at all, and the resulting tax revenue for the state of Nevada will be lost. Other people will turn to illegal bookmakers, who by all accounts continue to thrive in Nevada and make it as convenient as possible for their customers to bet. We don’t see how either of those scenarios helps the NRA or the state.

Far from being anti-NRA, we want their members to do well. Big casinos are vitally important to Nevada’s economy and to William Hill’s business.  We do business with a lot of big casinos and, indeed, have invested millions of dollars in upgrading their sports books. It is awkward to be on the other side of friends who are trying to kill the kiosks. No one will be happier when this issue is put to rest than me. 

But, before legislators decide whether to kill or keep the kiosks, we hope that they look at the real facts and make a decision based on policy and not politics. We have no doubt that the facts are on our side; we’ll see how the politics play out.

Joe Asher is the CEO of William Hill US, which operates kiosks in numerous bars and taverns.

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