Everi says it will roll out its mobile wallet in casinos by the end of 2020 Howard Stutz, CDC Gaming Reports · August 18, 2020 at 7:25 am Gaming equipment provider Everi Holdings said its mobile wallet – a cashless gaming product – will be available in casinos by the end of the year. The technology has been under development and the subject of casino industry interest long before COVID-19 brought the issue of cashless gaming to the forefront. The topic has been discussed by Everi executives on quarterly earnings conference calls going back to last year. The Las Vegas-based company said in a statement last week it would roll out the program – dubbed CashClub Wallet – sometime in the last three months of 2020. The company didn’t say which casino or casinos would offer the mobile wallet, nor did it suggest a region. That same day, Everi executives discussed the company’s cashless gaming efforts on a private investors conference call conducted by Truist Securities. “COVID-19 is currently serving as a catalyst to accelerate adoption of this likely transformative and potentially disruptive innovation,” said Truist gaming analyst Barry Jonas, who hosted the conference call and published a research note that same day. “We see Everi as well-positioned with a meaningful incumbency and first-mover advantage,” Jonas said. Everi CEO Mike Rumbolz said the company’s financial services technology division (FinTech) has given the business a leg up on the competition. Everi CEO Mike Rumbolz In an interview earlier this year, Rumbolz said mobile wallets require companies to have federally regulated money transmitter licenses overseen by the Federal Deposit Insurance Corporation (FDIC), which insures the funds on an account. Everi has obtained those approvals. “In 2019, we facilitated more than 115 million transactions that delivered $30 billion of cash to casino floors and generated $165 million in revenue for Everi,” Rumbolz said. “We have a large base of casinos and other facilities using our fully integrated FinTech network today, as well as our portfolio of compliance services and loyalty products.” Everi’s mobile wallet allows casino customers to load funds into the application directly from their bank accounts, debit cards, or credit cards. The players can then use the app to wager directly on a casino’s slot machines, electronic table, or live table games – all of which require an integration system. At the particular property, customers can also use the mobile wallet to place retail sports wagers and to spend in non-gaming areas, such as restaurants and retail. It can also be used for play in online casinos and for online sports wagering. Graphic showing how a mobile wallet is utilized/Courtesy Everi Holdings COVID-19 “Since the outbreak of COVID-19, the interest from our casino customers for cashless and contactless player funding technologies has greatly accelerated,” Everi Executive Vice President Darren Simmons said in a statement. The American Gaming Association publicly advocated that casinos utilize cashless gaming technology at last year’s Global Gaming Expo, long before the emergence of the coronavirus. In June, the Washington, D.C.-based trade organization announced a framework for allowing digital payments on casino floors, citing a study that found a majority of casino customers want the option to use cashless or digital technology for gaming. “I’m excited about Everi’s announcement,” AGA CEO Bill Miller said on a conference call last week discussing COVID-19’s impact on second-quarter casino revenues nationwide. “You look at the demographics of people on casino floors and it seems betting with cash and casino chips has become archaic,” Miller said. “The industry, as a whole, is moving forward and taking the additional and necessary steps.” Rumbolz said providing cashless gaming options creates new revenue opportunities for Everi. However, he cautioned that the move toward cashless gaming will be slow. “In the near-term, we expect players’ choice for funding on the casino floor will continue to favor existing cash access solutions, such as ATM withdrawals or cash advances,” Rumbolz said. “Going forward, over time, adoption of cashless and contactless funding solutions will grow.” New revenue source On the Truist conference call, Everi management noted that COVID-19 was materially accelerating discussions and potential adoption rates across the U.S. for cashless gaming products. Jonas said in his research note that consumer preference is shifting away from cash. “(Casino) operators see a more meaningful return on investment opportunity as they look to cut labor costs,” which Jonas said can be up to two-thirds of the total non-tax operating costs for the average casino. “Management noted most regulators, historically a barrier to product expansion, have ramped their efforts to understand and allow the technology, given (the) health concerns around cash usage,” Jonas said. He added that Everi’s existing partnership with operators and regulators on various compliance services, including federal anti-money laundering requirements, “know your customer” protocols and problem gambling initiatives “has helped ease friction in getting the product approved.” The only concern for investors, Jonas said, was the perceived risk that cashless wagering could “cannibalize” Everi’s existing cash access business, where the company is “currently the dominant market leader.” “Management emphasized that they expect cash to remain a meaningful component with a 35%-to-40% long-term adoption rate for cashless wagering an ‘aspirational’ threshold,” Jonas said, adding the company expects cashless wagering to drive higher transaction volumes for the casino. Shares of Everi closed Monday at $7.31 on the New York Stock Exchange, down 11 cents or 1.48%. Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at email@example.com. Follow @howardstutz on Twitter.