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Although vintage slot machines that accept coins can still be found on a few casino floors in the U.S., the move to cashless gaming is set to continue in 2023 driven by the effects of the coronavirus pandemic and changes in consumer preferences.
Cashless gaming at the end of 2020 was only in Connecticut and can now be found in at least a dozen states, with Colorado regulators expected to take up regulations early this year to enable cashless wagering at the state's 30-plus casino facilities.
The Colorado Limited Gaming Control Commission last month decided to postpone consideration of draft cashless regulations, instead allowing them to go through another round of stakeholder meetings.
As of Monday (January 9), it is unclear if six pages of proposed regulations will be included on the commission’s agenda for its January 19 meeting.
“In terms of the number of casinos, it is probably a couple of dozen,” said Jonathan Michaels, senior vice president of strategic development and government affairs at Sightline Payments, of the number of U.S. casino properties currently offering cashless gaming.
“It is not a huge number right now and what you see [is] everyone is waiting for that one customer experience that is going to blow people away and they are going to want to use it.”
Michaels told VIXIO GamblingCompliance that payments in gaming remains a complicated issue, but in terms of educating state gaming regulators, officials have now “passed Payments 101.”
“We are on to Payments 201 or Payments 301,” he said. “Right now, you are dealing with fraud issues across the industry, account takeover. Know-your-customer is a big deal. They want to know what is going on with cryptocurrencies … and real-time payments.”
Michaels admitted that there is no shortage of information that regulators want to know about, but the challenge is when regulators do talk about cashless regulations, they need to make sure they are flexible enough to allow for new payment methods.
“Don’t put yourself in a box because there are going to be new solutions you want to implement on the payments side and the security side,” Michaels advised state gaming regulators.
Michaels spoke with VIXIO last month in Las Vegas before Sightline displayed its next generation of cashless gaming technology before casino executives, state legislators and regulators at Resorts World Las Vegas.
The $4.3bn property that opened in June 2021 was the first resort in Las Vegas to offer consumers a completely cashless gaming and non-gaming experience. The technology includes remote identity verification and enrollment for loyalty programs, payments biometric authentication, and a single digital wallet.
Cashless gaming is also expected to be rolled out this year at Resorts World’s casino in New York.
Sightline partners with GBank, Konami Gaming and two other companies in operating Resorts World’s digital wallet. In addition to Resorts World, Sightline provides cashless wagering to Boyd Gaming properties in several states, including Nevada.
Looking ahead, Michaels foresees cashless gaming in about 20 states by the end of the year.
“Certainly, one of the really exciting things is the opportunity for omni-channel payments, where you could use your account, say in Maryland, to make a mobile wager using BetMGM and use those same funds at MGM National Harbor should they roll out cashless.”
That would offer the ability for money and loyalty to follow the customer wherever they go, Michaels said, adding that cashless wagering does appear to be an increasing strategic priority for major operators.
“I think you see it in earnings reports,” he said. “MGM is talking about it, Caesars and Penn also. Everyone is trying to figure out how do we get this holistic view of the customer to meet them where they are, and payments is at the center of that.”
The introduction of cashless payment systems has begun to transform the gaming industry by making casinos and online gaming companies increasingly reliant on cybersecurity measures to protect consumer data.
It also boils down to customers trusting their payment provider in the event of a breach.
BetMGM was the latest sportsbook operator to suffer a cybersecurity attack, notifying its customers last month that certain BetMGM patron records were obtained in an unauthorized manner. The company said it became aware of the issue in November 2022 but believes the data breach occurred in May 2022.
BetMGM said social security numbers, dates of birth, account IDs or other details about customers’ transactions may have been compromised.
The FBI also has been investigating data breaches at DraftKings and FanDuel, following a recent credential stuffing attack leading to losses of up to $300,000 from customer accounts.
Cyberattacks are not new to the gaming industry, as DraftKings disclosed in a U.S. Securities and Exchange Commission filing in June 2020 that, in March 2020, SBTech detected a ransomware attack on its network.
That was followed in October 2020 by sports data provider Stats Perform being hit by a cyberattack.
“When you have a cybersecurity incident or fraud incident … you need to make sure you’re communicating to your customers,” Michaels said. “We sent a customer bulletin to all our PlayPlus customers highlighting the safety and security measures that are in place. That’s table stakes for us.”
Michaels said the industry expects to see increased efforts by fraudsters trying to access their systems, but operators and suppliers are working with state gaming regulators on where they should enhance their security measures.
“With payments, there is always this battle between speed and security,” he added.
