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Cashless gaming in casinos may be inevitable but it should not be frictionless and might need to become mandatory for all play to maximize benefits and minimize risks from a responsible gaming perspective, according to experts speaking at last week’s International Conference on Gambling and Risk Taking in Las Vegas.
A trend toward cashless wagering in traditional gaming venues is gathering momentum across the global gambling industry, albeit with different policy drivers in different jurisdictions.
Regional governments in Australia and parts of Canada have recommended adoption of cashless gaming largely as a means of bolstering anti-money laundering in land-based casinos.
Cashless gaming is also being considered for the vast clubs and hotels sector in New South Wales, partly in response to a damning investigation of money laundering through gaming devices that was published last year by the NSW Crime Commission.
Regulators in various U.S. states have followed Nevada in approving cashless gaming in land-based casinos, generally in recognition of changing consumer attitudes to cash that have been accelerated by the coronavirus pandemic.
Last month, the UK government’s gambling reform white paper committed to a consultation removing a prohibition on cashless payments for gaming machines, although it cautioned that cashless gaming might first require new player protection requirements to be put in place.
Speaking during a panel discussion and separate presentation at the triennial International Conference on Gambling and Risk Taking organized by the University of Nevada Las Vegas (UNLV), Sydney University professor Sally Gainsbury said cashless gaming offers both significant benefits and legitimate concerns in terms of responsible gaming.
Academic research over the past 40 years has consistently shown that consumers spend more when they do not have to use cash and the “pain of payment” is not as high, said Gainsbury, who is currently leading an independent research project on a "regulatory sandbox" field trial of cashless gaming in New South Wales.
That means cashless gaming should be account-based rather than merely involve replacing cash payments with devices that accept debit or credit cards, which would be likely to increase risks of problem gambling.
“The way you set out to implement the system is really critical,” Gainsbury told fellow academics and gambling industry professionals.
Requiring an account that incorporates limit-setting and other responsible gaming tools means it is possible “to reintroduce, artificially, the friction we have with cash-based payments,” ensuring players can continue to make an informed choice around their gambling.
At the same time, “there’s lots more you can do when you have account-based gambling than when you have cash-based gambling,” Gainsbury said.
In the U.S., nascent research into the potential and risks of cashless gaming has included work by the Payments Research Collaborative established by UNLV’s International Gaming Institute, supported by Sightline Payments and Pavilion Payments.
An initial UNLV study based on data from more than 100m online and cashless wagering transactions provided by Sightline was released in February.
Speaking at last week’s conference, Sighlight founder and co-CEO Omer Sattar called on the gaming industry to provide improved “data visualization” for players to more clearly understand their gambling habits.
He noted how major U.S. banks enable their customers to access charts and graphs to show how much and where they are spending their money.
From Pavilion Payments’ perspective, CEO Chris Justice said the company believes that cashless technology “provides more benefits than harm” in terms of responsible gaming, whereas it is much harder to identify problem gambling in a strictly cash-based environment.
Still, Justice also said it was important to find the right balance between tools and other “speed bumps” within cashless gaming systems that can mitigate risks, and not creating too much friction in the experience that will lessen adoption by players in general.
In New South Wales, forthcoming academic research indicates that 50-60 percent of players, and potentially more, would continue to use cash if cashless gaming remains strictly voluntary in land-based venues, according to Gainsbury.
Among players’ concerns are data privacy and whether their wagering information might be shared with the government, financial institutions or used for gaming marketing purposes.
Players have also indicated that they would prefer cashless gaming to be app- rather than card-based and that they would like deposit limits to be mandatory, but set at self-determined levels rather than by regulators, Gainsbury said.
Charles Cohen, founder and CEO of UK-based financial due diligence service provider Department of Trust, said players should embrace tools that provide greater transparency on how they are betting and how much money they are spending.
It is also clear that cashless gaming in land-based venues is inevitable for one simple reason, Cohen said at the UNLV conference.
“At the end of the day, cash is on the way out,” he said. “At some point the casino industry is going to have to go cashless because there will be insufficient amounts of cash.”
