A panelist at last week’s ICE North America digital conference said the cancellation of the Global Gaming Expo was bad for Las Vegas.
However, Konami Gaming Chief Operating Officer Thomas Jingoli said the tradeshow’s producers made the correct decision, given the continuing spread of the coronavirus pandemic and financial issues currently hampering the gaming manufacturing sector, including layoffs and reduced revenues.
“When we look at budgets moving forward, trade shows are very expensive for us, and sometimes that gets lost in the industry of how much collectively we spend on a trade show,” Jingoli said during a panel discussion with other gaming equipment executives.
Jingoli said G2E is more than “what you see on the convention floor,” citing costs for bringing in employees, hotel room nights, and entertainment. He said the cost could be “millions of dollars when considering “everything that goes into that.”
Konami made the decision early, Jingoli said, “that the optics weren’t right” to attend the trade show and absorb the associated costs.
“Instead, (we) invest in our team members and people and keep them employed and develop products and move on,” Jingoli said. “There’s a place in time for trade shows moving forward. I just don’t think it’s the right time to have those right now.”
Everi Holdings CEO Michael Rumbolz, who facilitated the panel discussion, stressed innovation and regulatory relief, including cashless gaming and expansion of online gaming.
Gaming industry veteran Gavin Isaacs, the former CEO of SHFL entertainment and Scientific Games, agreed. He said the casino industry has to extend more online to create further opportunities that were seen when land-based casinos were shuttered.
Isaacs called it an opportunity to work with regulators and allow companies to new games and innovate.
The panel spent much of its time touting the early return of play with the reopening of casinos across the U.S., that were closed up to three months to slow the COVID-19 spread. However, it’s now survival mode and any recovery will take at least 18 months.
Jingoli said the initial numbers as casinos slowly reopened “were staggering” in some locations. He said patrons went out to gamble “because they were tired of being cooped up in their homes.”
He questioned, however, if the figures were sustainable.
“Once that becomes more sustainable, then I think on the manufacturing side our business will start to recover,” Jingoli said. “But it will take a while. People aren’t out buying a bunch of products right now and until we have some sustainable recovery, the business is going to struggle for the next several months.”
Scientific Games Chief Revenue Officer Bob Parente agreed.
The strength of the industry in the U.S. has been with play from “core-value players” and their pent-up demand.
“On the slot slide, it’s survival of the fittest and with limited games on the floor you want to have the best producers,” Parente said. “A lot of that has been players going back to the games they are familiar with. As we look at the customers and operators around the world, most of their optimistic perspectives right now is a long recovery period. If you look at 18 months down the road, we expect things to turn back to normal.”
Jingoli said the Las Vegas locals’ market and slot machine play in bars and taverns have come around much quicker than the Strip. However, gaming at taverns and bars closed last week in Nevada over COVID-19 concerns.
Until tourism returns in greater numbers and conventions return on the weekdays, the Strip will be slow to recover.
Jingoli said the manufacturing business is more competitive than ever and COVID-19 “exploited that a little bit.” Casino budgets have been cut and operators aren’t buying new products. It puts more strain on products to perform.
“Certain casinos have turned every other machine off, and others have repositioned their floor with games that have performed better in the past and turned off the low performing games,” Jingoli said. “That puts (research and development) at the forefront because of the COVID virus.”
That point was echoed by Parente, who said companies are looking to create games with fewer touchpoints, cashless gaming, and notices of when games need to be sanitized.
He said there’s been an increased demand for table games to help create social distancing. The infusion of cashless systems and digital wallets – regulations covering the products were approved by the Nevada Gaming Commission in June – will be quickly adopted by the industry and “be a positive outcome for the future.”
Jingoli said it’s important that the industry’s trade associations work with operators and customers to deal with regulators for innovation whether it’s cashless gaming and mobile wallets, so it doesn’t come across as a money grab by manufacturers. Those conversations weren’t happening with regulators seven to 10 years ago as the industry recovered from the Great Recession, he said.
