As U.S. Casinos Embrace Cashless Gaming, Regulators More Cautious

October 6, 2021
As the U.S. gaming industry continues to bring mobile wallets and other cashless products to market, there are hurdles from a regulatory standpoint as state regulators try to understand the importance of this technology, according to lobbyists and gaming executives.


As the U.S. gaming industry continues to bring mobile wallets and other cashless products to market, there are hurdles from a regulatory standpoint as state regulators try to understand the importance of this technology, according to lobbyists and gaming executives.

Cashless gaming is still a small portion of the overall transaction volume of the U.S. casino industry, but gaming operators, technology suppliers and payments providers are increasingly rolling out mobile wallets, which allow customers to fund their play at slot machines and table games throughout the casino.

Jessica Feil, vice president of government relations and gaming policy counsel with the American Gaming Association (AGA), said Tuesday that a lot of hurdles are born from the industry’s regulatory system.

“Every state has a slightly or dramatically [different] system and won’t allow the same thing,” Feil told attendees of a panel discussion on modernizing payments at the Global Gaming Expo (G2E) in Las Vegas.

Feil said the AGA has been focused on bringing the entire gaming industry together to support changes to expand cashless or digital payments on the casino floor.

“From our perspective, the regulatory environment is fairly mixed,” said Jacob Lanning, senior director of business development for payments at IGT.

“Obviously with sports betting coming up in a lot of markets, there have been a lot of regulators focusing on that,” Lanning told attendees Monday during a panel on digital payments at G2E.

“Cashless and these technologies take a lot of time, energy and effort between AML, know your customer rules and how you run these operations.”

Lanning said IGT’s approach to regulators is really one of education and helping them understand the technology.

But he noted that every regulator is on a “different path in this journey.”

So far nine states have adopted cashless gaming and digital payment solutions for commercial and tribal casinos: Nevada; California; New Mexico; Oklahoma; Pennsylvania; Indiana; Iowa; Ohio; and Florida.

“A lot of them see the benefits specifically related to the need for additional social distancing, the need for contactless solutions,” Lanning said.

Lanning warned that the rest of the world is moving in this direction and that the gaming industry has lagged in innovating around cashless for so long.

“For a lot of [regulators] the financial side of the industry is relatively new,” he added. “They haven’t had to deal with it as directly as they are now as we are introducing these new technologies. It really is about education.”

Jonathan Michaels, senior vice president of strategic development and government affairs at Sightline Payments, said for his company it is about treating regulators as partners because there is no sports betting without digital payments.

He credited Nevada regulators with being out front in working with the industry on revising regulations last year to allow for cashless wagering at casinos.

The Nevada Gaming Commission in June 2020 approved several amendments to existing regulations that enabled more cashless gaming options to be offered in casinos, although use of credit cards at slot machines remains prohibited.

The changes to Nevada Regulations 1 and 14 concerned the electronic transfer of money to games or gaming devices. The new rules removed the requirement that funds be transferred digitally to a device in a casino that would print out a dollar amount to be used at a slot machine.

That change allowed customers to move funds from a digital wallet, which could be accessed by a smartphone or tablet, directly to gaming machines or table games. Customers can also move winnings from a machine or table to the digital wallet for transfer to a bank account.

Michaels said Monday that Sightline has applied for a further change to Regulation 5 in Nevada to allow for digital identity verification for on-premises casino wagering accounts, which “we believe will take out some of the friction in how you create, educate and engage the customer.”

According to Sightline’s proposal, the change would allow an operator to register an individual as an authorized player and verify the information remotely, just as online poker accounts currently are.

“I certainly believe that … regulators are much more willing to work with you as a partner as long as you bring them along and help them understand what you are trying to do,” Michaels said.

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