No Digital Disruption? How Vegas Learned to Live with iGaming
Back in the 2000s, the term “digital disruption” was very much in vogue. The concept is quite simple: the rise of the internet and accompanying technologies, such as smartphones, has disrupted a series of industries with digital alternatives. The most commonly cited example is Netflix and the movie-rental industry, but there are many others, ranging from Uber disrupting the taxi sector to email challenging traditional mail services.
The idea of digital disruption hasn’t gone away, but the term itself has become less fashionable to use, perhaps because the novelty of the internet era has worn off. That said, we may get a similar era of disruption with generative AI. Nonetheless, there are some industries that felt somewhat immune to digital disruption, or at least adapted well enough to thrive, and we can’t think of a better example than the casino sector, especially in Las Vegas.
2018 Supreme Court Decision Changed the Landscape
For context, online casinos first arrived in the 1990s, with companies like Microgaming testing the first casino software. By the 2000s, there was a global network of brands developing games and architecture. The United States was more of a special case until 2018, but it changed after the Supreme Court’s historic decision in 2018, which more or less let individual states decide on sports betting and casino gaming.
Nevertheless, we arrived in a situation where players could access casino games wherever they were in the world. By the late 2000s, they could play how they wanted, such as on mobile, tablet, or desktop, and they could pay how they wanted, such as using a Skrill casino. By the 2010s, the advent of live dealer games online meant that you could even play with real croupiers without leaving your home. So why go to Vegas or elsewhere?
Well, arguably, where Vegas got it right was through demonstrating that “casino” could mean two things. Online, it is a casual experience, similar to booting up a video game, whereas offline, the term casino became more synonymous with an experience. Yes, Vegas has always been known for its experience, but there has been a refocus to make gambling only one leg of the package. You can see that now, too, in the more varied attractions, from EDM festivals to the NFL. Not everything is designed to get you into the casino.
A second thing Vegas did well was through partnering with iGaming platforms, either through their own brands or licensing deals. There was definitely a sense of “if you can’t beat ‘em, join ‘em,” but we’d argue that there was at least some prescience in partnering with some of the expert European-based iGaming brands that had decades of knowledge in digital casinos.
There is, of course, some good fortune for Vegas. If you look at somewhere like Atlantic City, where numerous casinos have closed over the last couple of decades, it had the misfortune of losing its moat earlier, as nearby states, such as Pennsylvania and New York, relaxed gambling laws online and offline.
But overall, you might argue that AC felt more in competition with online than Las Vegas has ever been. Vegas does a better job of selling the package, giving non-gambling reasons for booking your flights, whereas the AC trip felt more like something you might do on a whim for the evening. In short, Vegas competes as a destination, whereas AC competes as an alternative casino.
The Long-Term Picture May Be Different
In saying all this, we will have to scrutinize this over the course of years, decades, even. Many states’ digital gambling laws are still in the process of being formalized, and there could be an impact if, for example, the state of California were to formally legalize online casino gaming.
Still, you have to hand it to Vegas, because it has basically weathered the double whammy of online gambling and the legalization of in-person gambling across numerous states. Casino revenues have gone up and down over the years, as they do all over the world, but it is more to do with the ebb and flow of tourist visits rather than any threat from the digital gambling sector.
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