No multi-day gaming conference in the U.S. in the last several years has been complete without a panel on the future of gambling on eSports — and how industry pioneers can strike it rich. Yet in spite of literally billions of people on Earth having played video games at least occasionally, often with a competitive element that seems to lend itself to legal wagering, the gold rush has yet to come.
The panel at the East Coast Gaming Congress at Harrah’s Casino in Atlantic City on Monday didn’t have the magic answers, but at least it offered some tips for casino operators on how to address the concept effectively. Ari Fox, the co-founder of the Gameacon video gaming and eSports conference that is a parallel for the better-known Comicon events, has been analyzing the potential convergence of casinos and eSports for the past decade.
“There is such an amount of effort that goes into research, with all the numbers being tracked, to trying to understand millennials and Gen-Z,” Fox said. “From what I can see, the casino industry knows them well.”
But not well enough, Fox suggested.
“The key to earning them as customers is to gain their trust, to be able to show them, ‘This space is for you, not for your parents or your grandparents,'” he said. “We started Gameacon in 2015 as a grassroots event. That’s where you earn that trust. This [potential] customer likes philanthropic industries, to feel that you are part of their world. If you can, connect with them in a way that they are happy about.”
If you build it, build it right
Major video game events can sell out arenas of 15,000 to 20,000 fans, a phenomenon that is unfathomable to many over age 50.
But Grant Johnson, CEO of ESports Entertainment Group, said, “Don’t just build arenas; build something that is interactive. Right now, 60% to 70% of a casino floor is dedicated to slot machines. You have to give [younger consumers] a product they want to play on.”
Johnson said that while the reluctance of eSports game developers to enter the world of stringent gaming regulation complicates matters, there could be another path forward.
“The gambling industry itself could create its own ecosystem” of eSports contests, Johnson said. “That’s a possibility.”
Longtime investment banker Robert Heller, now CEO of Spectrum Gaming Capital, said that he has found the casino industry to be “supportive of eSports” even though “they find it very confusing.”
“The casino industry has been slow to take up eSports,” Heller said. “They don’t understand it, so they say, ‘Let’s wait.’ Some gambling companies have looked at eSports like it’s just another fad, and ‘the consumers don’t have any money.’ I haven’t seen any of them talking publicly about it yet. You can’t gamble on it, so it’s not that important.”
None of the panelists was able to offer a prediction on which major casino operator would become the key “first mover” in launching an eSports wagering boom. Johnson said professional teams, which have hurtled headlong into sports betting almost immediately after losing a six-year court battle to New Jersey to try to prevent its expansion, are “further along than the casino operators” on eSports gambling.
The reason? “Their players are all gamers,” Johnson pointed out.
All eyes on New Jersey … again?
Lou Rogacki, the deputy director and assistant attorney general for the New Jersey Division of Gaming Enforcement, explained how the state may soon offer yet another trail for other states to blaze regarding eSports wagering.
While eSports events have been held in Atlantic City on occasion for almost five years, there was no legal wagering on the competitions. That changed to a limited extent in 2018, after the U.S. Supreme Court opened the door for Las Vegas-style sports betting in any state, not just Nevada. The DGE began permitting wagers on a few eSports events per year, but there were complications.
For instance: no betting if any of the participants were under 18 years old, as some of the top gamers in the world are at any given time.
Rogacki recalled one League of Legends event from two years ago that would only be a potential legal bet in New Jersey if a top team, which featured a 17-year-old, was eliminated. Rogacki said his teenage son teased him for watching an event semifinal to confirm that the team did not reach the finals, thereby allowing for last-minute wagering.
Drone racing events in the past two years have met a similar fate, with would-be bettors sidelined until a top underage player no longer was competing. A bill sponsored by Assemblyman Ralph Caputo easily passed in both the Assembly and State Senate in late June. But while a New Jersey governor has 45 days to decide on a typical bill’s fate, that clock only ticks while the legislature is in session.
So after a summer recess that lasted more than two months, the deadline for Gov. Phil Murphy doesn’t come until next month — after a Nov. 2 reelection bid that a number of polls have shown is tightening significantly. A “cleanup” bill regarding a gambling sector still in its infancy hardly figures to be top of mind.