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If it were up to the CEOs of Pavilion Payments or Sightline Payments, adoption of cashless wagering apps by casino patrons would be much further advanced than where it is in the early days of 2024.
“While its adoption has been slow to start, we are seeing that gaming institutions are seeking tools that deliver convenient payments, not unlike what a patron would expect from payments experiences in any other industry,” Pavilion Payments CEO Christopher Justice told Vixio GamblingCompliance.
As the gaming industry evolves, Justice said Pavilion Payments believes there will be an increase in users taking advantage of cashless solutions.
Currently, only around 60 properties out of the 1,100 to 1,200 commercial and tribal casinos in the U.S. offer cashless wagering.
And so far, 12 states have adopted cashless gaming and digital payments solutions for commercial and tribal casinos: Nevada; California; Louisiana; New Mexico; Missouri; Mississippi; Oklahoma; Pennsylvania; Indiana; Iowa; Ohio; and Florida.
“The people who have been exposed so far to this product is relatively small,” said Omer Sattar, CEO of Sightline Payments, whose cashless product is available in 22 casinos as things stand.
“I’ll be the first to raise my hand,” Sattar said. “The first four or five other companies in the marketplace that are getting deeply involved in cashless, none of the products are very good, including our own.”
Sattar admitted that as consumers increasingly adopted mobile payments in other parts of their daily lives, payments companies have been unable to crack the code of wide-ranging take-up in the gambling industry.
“It’s true for us and everyone else. If you take a mediocre product, whether you deploy it at one casino or 200 casinos, it is still going to be a mediocre product,” Sattar said.
“I think until us as the providers and the industry … have a better and more comprehensive user experience both for enrollment and for play, we just don’t think there is going to be wide-scale adoption.”
However, Sattar told Vixio that Sightline has been telling large commercial casino operators that 2024 will be a year of experimentation, with broader deployment and adoption in 2025 and 2026.
“It is eventually going to happen,” he added.
Sattar and Justice said there are good reasons why the gambling industry has lagged other consumer segments in the shift to cashless payments.
“Regulatory concerns are a major component in developing and integrating payment processes for gaming,” Justice said.
As the gambling industry is highly regulated, Justice said it is not uncommon for modern technology to roll out slowly compared with other industries.
“Regulators are interested in all parts of the gaming industry that directly affect patrons and their gaming funds, especially if the solution makes payments convenient for patrons to fund their play,” he said.
Sattar agreed, adding that Sightline waited for two years for Nevada regulators to approve regulations in 2022 that allow for remote account registration and ID verification for a cashless wagering account.
“We believe that should be the norm in every jurisdiction, but that requires regulatory work, jurisdiction by jurisdiction,” Sattar said. “We should not blame the regulators. The regulators are very open to solutions and the work is ongoing.”
Sattar confirmed that Sightline and other companies are working on the issue in multiple states.
“Another consideration for in-person gaming especially is that most casino patrons tend to be older, usually 50 years old or older,” Justice told Vixio.
Justice admitted that these patrons are more familiar with mobile technology than many people recognize, but they are still relatively slow to adopt these kinds of tools.
“With that said, we have observed that these older patrons are increasingly adopting cashless technology, both on the casino floor and otherwise.
“We also have noticed that once users adopt cashless technology, there is a high retention rate that follows.”
Cashless solutions have also been introduced into various regulated state gaming markets by Everi Holdings, which has a partnership with the Seminole Tribe of Florida and the Wilton Rancheria Tribe in northern California.
Acres Manufacturing has also deployed cashless technology at tribal casinos in California and in Penn Entertainment casinos.
Last January, Acres cashless technology was approved by regulators in Louisiana, Mississippi and Missouri.
The last game-changing introduction of new payments technology on the casino floor was in 2000 with the Nevada rollout of IGT’s TITO, or ticket-in-ticket-out, which eliminated coins and tokens, reduced patron and employee theft, and improved accountability.
Advocates for a cashless casino environment believe it will have similar impacts by reducing the use and accounting of paper currency.
Currently, Sattar said, the amount of cash dispensed in the U.S. casino business is around $90bn a year.
“[That’s] a very large number,” Sattar said.
“We still believe that 50 percent of that is going to be electronically done within five years. So you are looking at $45bn to $50bn of cash dispensing that is going to take place in the U.S. casino industry electronically.
“Regulators have been working on getting consistent regulations,” he added.
Sattar told Vixio he has met with several large commercial gaming companies that want to deploy cashless on their properties, but are not willing to do it until it meets the needs of the consumers and the product is right.
“The reality is, you are only going to get one shot,” Sattar said.
“If I’m MGM or Caesars and I deploy a cashless product and no consumer is going to try it if it’s slow and doesn’t work, the next time the incentive needed to get the consumer to try it is astronomical.
“You’ve got to get it right the first time.”
