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Betting big on America's gaming industry growth
This week on What's at Stake, hosts Penta Partner Bryan DeAngelis and Managing Director Ylan Mui are joined by Senior Vice President of Strategic Communications for the American Gaming Association Joe Maloney for a special March Madness episode on the American gaming industry. They discuss the contributions of the industry including its impact on jobs, wages, and tax revenues, as well as how casinos are becoming institutions for economic revival in communities seeking economic growth.
Bryan, Ylan, and Joe also dive into gaming regulation. Beyond legalization, they look at policy advocacy and bipartisan legislation ensuring responsible growth that prioritizes consumer safety. They also address some big questions, including: How has the industry changed over the years? Who are the main stakeholders in the game now? And what does the future look like for this industry?
Welcome to this week's episode of what's at Stake. We're your host, Brian DeAndrois, head of the Washington office and partner here at Penta.
Speaker 2:And Ilan Mui, managing director at Penta.
Speaker 1:This week we're joined by my good friend, joe Maloney. Joe's now the Senior Vice President of Strategic Communications for the American Gaming Association. Joe and I have known each other for a while. Joe's a pretty experienced public affairs and comms professional. Prior to his current role, he served as VP of Public Affairs and Communications for the Washington Commanders. Now Joe's leading all the communications for AGA research, marketing, public affairs campaigns to advance the key priorities for the gaming industry, for its members, all the leading casino and sports betting operators throughout the US.
Speaker 1:So a timely conversation. With March Madness coming up and Joe and I have been talking. The gaming industry's been quite an economic force, contributing $329 billion in economic output to the US, including almost 2 million jobs, $100 billion plus in wages and salaries, $53 billion in tax revenue. So it's much more than just what a lot of us think about in terms of sports betting and March Madness and all of that. So I think it's a perfect time to have you on the show, joe. Thanks for joining us. Thank you, brian. Thank you, elon. Let's just get started. Tell us more about what the American Gaming Association is up to, what your role is.
Speaker 3:Sure, you nailed most of it at the top, but, in short, we are the legal and regulated casino gaming industry. That's who the AGA represents, and that's inclusive of casino, both what we call brick and mortar casinos, which there are over 1000 located throughout the US. There's some form of gambling now legal, regulated gambling in over 40 states in the country. So our membership are the casinos, the gaming suppliers, diversified gaming suppliers which is a fancy way of saying slot machine makers and manufacturers, as well as some of the tech stack builders and odds makers that supply the online sports books and even physical retail sports books with the technology to make odds, basically, and permit and allow bets within that current legal and regulated environment. We also obviously now represent the largest sports betting operators and some of the many brands that you're probably seeing on advertising, particularly in this market, which is, by and large, a legal and regulated market here in.
Speaker 3:DC, maryland and Virginia, and we can get more into the specifics of what that landscape looks like. My role, really exciting and I think in short, it's really to sustain this healthy, legal and regulated market and there's a number of challenges now that we are, for all intents and purposes, a mature industry in this country. It wasn't that way from the very beginning.
Speaker 3:We're actually approaching the almost the 100 year anniversary of legal, regulated gaming, the first legal casino opened in Las Vegas in the 1930s, so it's soon approaching and for so long, obviously, legal and regulated gaming was confined to one or two places throughout the country. And so the challenge right now in this role which is why I'm so excited to step into it and to represent such a proud industry that is again now across the country is what does sustainable growth, what does it look like now in this mature industry that went from starting in such a tightly geographic confined area or two around the country to now something that is now across the country, is permitted, is legal, that actually functions at the permission of state and local jurisdictions, and so what does that relationship look like now that we've seen such tremendous growth?
Speaker 2:Yeah, and that geographic growth has really been what has driven the economic growth and the impact of the industry. Can you give us a sense of the scope of the economic impact? I know that Brian ran through some numbers in terms of the jobs created, the taxes paid, but what does that look like? What does the impact of the gaming industry look like across America?
Speaker 3:It's a good question and I think there's different ways to look at it. So, of course, when regulators and when policy makers are considering allowing some form of legal and regulated gambling in their community, there's a couple of different factors that go into that consideration. One certainly is economic impact in the form of jobs, obviously, wages generated, salary, payroll, the multiplier effect across a casino property. So you're hiring a florist to come in and make beautiful displays for Chinese New Year, you are obviously working with all types of vendors from a maintenance standpoint, whether that's physical property or plumbing and everything else.
Speaker 3:There's obviously a very important tax revenue opportunity that comes with the gaming industry. Last year's tax benefit nationally was almost $15 billion, and that's important. Slots are taxed, table game revenue is taxed, and then state and local jurisdictions have the opportunity to determine what to do with that tax revenue, and so you're seeing that that's a massive, obviously, indicator of economic impact, simply because it enables these jurisdictions to do more in terms of services to their residents. And then, finally, what I would say, what's really interesting, particularly seeing this in a state such as Virginia, which is not a mature gaming state but recently designed a framework for casino properties, and again in a conversation that happened in the General Assembly. They determined five casinos was the right number, and then they predestined those casino properties to be in areas that needed that economic impact. And so they are now permitting the opportunity for private entities, operators and other sort of real estate investors to come together, submit bids to those local communities that are predestined for these licenses and say, okay, you have the opportunity now to invest in this local economy.
Speaker 3:There's still ballot referenda in each of those local jurisdictions to permit entry and then the impact will be going to those areas that need them most. So Danville and Bristol and Virginia Beach slash Norfolk. So you're seeing now some great companies step forward and propose amazing multi-use, mixed use destinations, elon right Destinations that are inclusive of hospitality, live entertainment and, yes, slots, table games and maybe a sports board. So it becomes an anchor for that community in the form of a destination that again provides also that multiplier effect and it is a really strong economic development driver for states.
Speaker 1:I remember Massachusetts, I believe, did a very similar model when they allowed it. I'm sure many other states have followed that kind of targeted approach of where we're going to do this and how we're going to help build up part of the state.
Speaker 3:Yeah, and even locally here we've got a really terrific example in Maryland which similarly provided for opportunities for casinos, and you're seeing it's pretty crazy. We just released our commercial gaming revenue tracker for the previous year and it showed growth across the industry and we can talk about those numbers a little bit. But I didn't know this when I took this job. The Baltimore Washington footprint is a top five gaming market here in the US.
Speaker 3:Really yeah, and you have a really great property that the Quartish Company is. The live property up in Anne Arundel County and National Harbor is a top 10 gaming property globally Now. Globally, right, that's amazing, it's pretty remarkable.
Speaker 1:I mean they've done great stuff there, but I would have never thought they've quickly gotten in the top 10.
Speaker 3:Absolutely so. And again, that revenue, the tax revenue, impact of that, again, and it's those revenues are tied to things like education, public education in the state of Maryland. So it's exciting and the nice and the important thing about it is, you know, what I'm excited to sort of be a part of. This storytelling process is like this is a conversation that happens with communities and with statewide policymakers. This idea of like, are we permitting entry, what is it going to look like and how is it going to benefit our residents? And that's something that the community works with, with their statewide policymakers and in some instances, yes, like casino properties interested in developing right, they're going to make an investment, they want to communicate hey, this is how this investment can work and have a return on equity, of course. And we have publicly held properties that are coming, publicly held companies that are putting up these properties, and so it's just this like sort of like fantastic, sort of collaborative approach, particularly on the brick and mortar side, that you're seeing.
Speaker 1:Can you you hinted at this a little bit 100 years, you said, since the first casino, but tell us a little bit more about the evolution that's taking place. So you are seeing more states, as you mentioned, do the brick and mortar, but you're also seeing online take off what probably more to come, I imagine, in the future. How does the industry look?
Speaker 3:Sure, I think the best way to describe it, and I recently learned this from our new, our new AGH a chairman who's recently appointed to service two year term.
Speaker 3:We had a discussion in front of a huddle of executives just a week ago and it became clear that there's basically three periods of expansion in the gaming industry here in the US.
Speaker 3:And so, if we assume the beginning was Las Vegas and Nevada specifically, right, the other, the first moment of expansion, was tribal properties Right, was tribal communities in sovereign lands and in sovereign territory working through a compact with the federal government and the Bureau of Indian Affairs to say like, yes, we have this autonomy to do this and yes, we're going to build this expertise to provide tribal gaming opportunities. There were some counter narratives that had to be confronted with media, specifically at a time where there was still this legacy sort of narrative and myth about Vegas casinos being a result of organized crime. Yeah, and so you know. It was important then for the tribal communities, in this first moment of expansion, for the industry to say, actually, you know, like we're doing this, we're going to have these state compacts, we're going to provide revenue and we're going to provide taxes and, more importantly, we're going to be able to provide services to our people.
Speaker 1:Yes, right.
Speaker 3:And, again being from New England, that was my first exposure to gaming was Foxwood's, a tribal casino, maheagansang. Maheagansang and Foxwood's, which you know to this day is one of the top performing tribal properties throughout the country. So that was the first period of expansion. The next opportunity and sort of moment of expansion was actually Riverboat gambling like up and down the Mississippi River.
Speaker 2:Oh yeah, I'm from New Orleans. That's right. Exactly, this is your area of extra deal, yeah.
Speaker 3:Exactly, and my first exposure to this was as a young political operative working Iowa caucus campaigns, because there was like Riverboat gambling sort of on the eastern border over there in Iowa, and it is, it's really important and that was a big moment of expansion.
Speaker 3:And so once those two sort of moments took place, I think at that point you began to see a conversation with policymakers throughout the country which is just, it was the haves and have nots, right, it was something exciting, something diversifying for a local economy to say there's a hunger for this, this is people enjoy doing this. Why should Las Vegas in Atlantic City, and suddenly, like you're in Massachusetts and there's no gaming, you're like, ok, well, why are all our residents getting on a bus to go to either Atlantic City or to Fox Woods? Why aren't we capturing some of that economic activity? And that's where you then saw that moment of expansion, where suddenly now land based casinos, which I said in some form of gambling over 1,000 across the country, in over 40 states. So that was the big evolution. And then we can and not to interrupt, but in large part because they did it well.
Speaker 1:Like you know, you did mention that kind of you know, whatever you want to call it, but the preconceptions about Vegas and the organized crime. But when you think about Connecticut did it so well, a lot of these other? It kind of erased a lot of that. That this isn't that kind of industry.
Speaker 3:You know it's interesting because, sure, were there buses leaving Springfield, massachusetts with, you know, elderly individuals leaving at like 6am, going to Fox Woods spending the day there and then leaving at 5pm and they're getting a box lunch. Sure, and because they loved playing those slots. Yes, right, they loved the slots.
Speaker 1:My grandmother was probably on one of those buses Right.
Speaker 3:But then, soon enough, they began to be more about hospitality, and I think that was the moment where it's like OK, suddenly now we're losing Massachusetts families or New Hampshire families for three and four days, and they're taking their hard earned wages and they're spending a weekend at this property.
Speaker 1:Yes.
Speaker 3:And that's where I think the competitive aspects came in, across states and borders.
Speaker 2:Well, joe, that brings up a good question, which is, as you've seen, the evolution of the industry. Have you seen an evolution in the customer Right? Who do we have any sense of? Who is visiting the properties now, and how has that changed over time?
Speaker 3:It truly depends on the property and the geographic location. Las Vegas is going to attract a more international looking individual and again, it's also a result of infrastructure and what you've been able to build around it from a capacity standpoint. So let's set aside Las Vegas. I think that the casino customer, again depending upon the geography, looks different at different periods of the day. I have been as a consultant to this industry prior to my time with the commanders and as an employee of the AGA for about eight to nine weeks now. What the crowd looks like on a Tuesday lunch hour at National Harbor is dramatically different than the crowd on a Friday night, and National Harbor is a perfect example. So, mgm National Harbor, they're going to have live entertainment. They're going to have a comedian at their theater.
Speaker 3:They're going to pull in a younger looking demographic, and then that demographic is like let's go to the JG Steakhouse and then let's go hit the tables, and I think that's the secret sauce.
Speaker 2:A casual consumer can now participate.
Speaker 3:That's right.
Speaker 3:That's right.
Speaker 3:And so because there are different profiles of LV8 better, there are different profiles of a gambler, there are different profiles of any sports better, and I think what these destinations do, and I think Atlantic City and Las Vegas have done it historically, but I think what you're beginning to see, particularly with properties like Hardrock and MGM, national Harbor and some of these other regional gaming operators which are like Boyd Gaming and Rush Street and Penn, they're just creating these experiences and again, with the idea that this is a form of entertainment for Americans right now.
Speaker 3:And so it's just like what are you choosing to do with your leisure money? And so it might be a group of women celebrating a birthday for a friend and they want to go to a great restaurant, because the best restaurants in the Lehigh Valley right now are at the Casino in Bethlehem. Sure, right, if they're not in downtown Bethlehem, they're sick and tired of getting on a train or taking a long drive into New York City, but they can get a four or five star restaurant at the Casino in Bethlehem. And then suddenly that group of women wants to go play blackjack.
Speaker 1:Right, yeah, yeah, it's perfect. Let's talk more about the online sports betting, and I guess that's the latest evolution, if I got that right. And so what's the current state of play there? That obviously seems to be taking off, if you just think about the marketing and advertising, but where are you guys on the state level with that and the growth behind that?
Speaker 3:Sure, so it's been a pretty brisk five, almost six years now since the Supreme Court overturned the effective federal ban on sports betting, and the pace of sports betting legalization is, I would dare to say, actually unprecedented. And it's unprecedented for a couple of different reasons, but there's one probably very, very important reason, which is an acknowledgement that for as long as there have been sports, people have been betting on sports.
Speaker 1:That's correct. It's called the illegal market. It's been there.
Speaker 3:And so policymakers throughout the country were not only anticipating it, and, in fact, the Supreme Court case that began this started out in New Jersey, because then Governor Chris Christie was literally sick and tired that Las Vegas had this monopoly on sports betting.
Speaker 3:Basically. So the court overturns PASPA in May of 2018. And now we are sitting here today in 38 states in the District of Columbia now permit legal and regulated sports betting, whether that is at physical retail, brick and mortar casinos and or sports books, or online. That's majority of it is taking place online. So now half of all American adults in this country live in a legal, regulated state for sports betting. So the growth and we have all been a part of multiple policy campaigns, particularly those that happen at the state legislative level and that's where I sort of dare to say this is probably unprecedented that there are very few things that have actually scaled so so quickly and, I think, importantly, what you found, where there were actually not exactly what I would describe as mature gaming states getting into sports betting first, tennessee no casinos in Tennessee. They went up pretty early with online sports betting.
Speaker 1:Why do you think?
Speaker 3:that is, virginia. No casinos did sports betting. First, it's because it was an exact opportunity we discussed. The illegal market was thriving, they knew there were constituents betting and they were betting in the illegal market, which does not capture any tax revenue, does not provide any wraparound services for problem gambling or any messages around responsible play, and so you had a scenario where we were just watching tax dollars, potential tax dollars, just kind of go out the window. So it was definitely an opportunity to migrate those illegal betters into the legal market and then capture that tax revenue.
Speaker 1:I had a question on this and maybe just answered in a way. But you're revolved on these policy advocacy campaigns and sometimes going too fast can be bad, right, when you think about stakeholders, it's like sometimes this stuff can take off on you and it gets bumpy because the business is taking off but the policymakers or the employees, or even when it comes to something like gaming, that kind of safety and responsibility stuff you talked about around it. It did that all work so well because, in a way, the illegal market was there and policymakers were already primed about it to fix it.
Speaker 3:There was enough expertise from gaming regulators in some of these mature states that I think was able to sort of create collaborative efforts throughout the country, and you all certainly had the gaming industry with a perspective on what types of tax rates were more appropriate for the things that they wanted to do, given the actual margin in that business is actually pretty small.
Speaker 3:So what I think you've found with the gaming industry and there are over 5,000 state gaming regulators and tribal regulators that are working with industry each and every day and ensuring that the duties and obligations again of this permission to operate, the license is granted by the state, right, it's not any of these properties that are going in sports book properties saying, okay, hey, we're here, we're live in Virginia. There's a significant vetting and background process right, everything from financial health to sort of criminal background checks, to technology, to testing of all of their sports book operations, to ensuring funds are provided to customers and then again duties and obligations that are also added with respect to a responsible place. So we have not encountered an instance, nor do we believe there to be an instance out there, where there some state is some outlier on some particular policy definition and or policy aspects such as a tax rate.
Speaker 3:New York is taxing at nearly 50% or above 50%, and some states are at 15%. Right, so different states are taking a different approach, but that's actually just like what's really, really important, because what the Supreme Court overturned was that pass but wasn't violation of the 10th Amendment right, all states not reserved by the federal government or delegated to the states. And so this is a robust set of state level regulations and, I think, importantly, states are determining the timing of when it is appropriate to do this, because there are some competing interests. So we're at 38 states in the District of Columbia. The pace is gonna slow down. North Carolina just went live on Monday. That might be the only new state that goes live this year. There's two very, very large states that are still out there yet to go legal Texas and California, and again, they're just taking their time. The conversation is still happening, right, right.
Speaker 2:Do you find that the expansion of sports betting in particular is something that appeals across party lines, and do you find that the debate is about whether legal sports betting should exist or more about what type of entity should have the license to operate? Who should be able to hold that type of gaming license?
Speaker 3:All of the above. I think those conversations happened particularly at the onset of developing these frameworks. Thankfully, it was largely a very bipartisan effort. This the idea of losing tax dollars and recapturing that is a very bipartisan.
Speaker 2:Nobody wants to lose money. No one wants to lose.
Speaker 3:No, and I think the benefit of sports betting is that it was sports. Democrats and Republicans love sports and fully understood that. Yeah, I'm fully aware of that. Aside from the larger instances like the Chicago Black Sox scandal, they were aware of other scandals in the past. Like everyone is aware of this idea that for as long as there have been sports, people have been betting on it and so thankfully, like I said, there were never any sort of these partisan shutdowns or showdowns on this topic.
Speaker 3:I think your question about licenses and who gets licenses and which ones are permitted entry is a really, really important one, because that has taken bespoke approaches in certain states. I would just give you one quick example. When I was head of public affairs for the Washington commanders, a big part of my job was being in at the ground level in Virginia and Maryland as those policy makers were designing their regulated and legal framework for their sports betting marketplace. And, importantly, in each of those states our concern was ensuring that the sports franchises that operated in those states had an opportunity to be a licensee, and what that looks like when it's a sports franchise. It's called a market access license. So the idea around a market access license is. It provides the sports franchise some standing in the conversation and then allows a sportsbook operator to work with us to operate the book. And the lift for the sportsbook operator particularly this was probably 2021, 2022, it allowed them some brand affiliation with the NFL franchise, so that was an important marketing opportunity for them?
Speaker 1:And is this a physical relationship Like this?
Speaker 3:is opening a sportsbook in the stadium, because that's how, in some instances, it is in Virginia, where we are a market access licensee, where the commanders excuse me we're a market access licensee and the operator is fan dual, that exists without a physical retail sportsbook. It's simply just an online sports betting license. In Maryland where, again, this just shows you the state by state jurisdictional regulatory authority that's put in place, we actually were not able to partner with FanDuel, so the commander's market access partner sportsbook operating partner in Maryland is Fanatics, and so Fanatics just newly got into the betting and gaming space. We were their first marketing partner and we were their first retail sportsbook, which is located inside of FedEx Field. And that was really important in the overall discussion with sports franchises in Maryland, because Maryland, the Maryland General Assembly, was really interested in creating sports entertainment districts in Baltimore for their franchise. There's a casino up there, so they wanted to respect the casino downtown. But hey, how could the Ravens and Orioles get into this space and help create more foot traffic downtown?
Speaker 3:The commanders in Prince George's county at their stadium, how could they create more of an entertainment district around game day, permitting them to have a sportsbook? The district has done the same thing with their sports professional franchises DC United, caps and the Wizards, and then obviously the nationals have a betting GM sportsbook, so that was the idea around doing that. And North Carolina, which again went live on Monday, they've deployed the same model, sort of predestining these licenses to these sports franchises. And then what happens is is the sports franchises are, in some instances, the properties then partner up with a sportsbook operator. So, but it's different in every other, in every other, in a lot of jurisdictions. Sometimes Some are just like we want them all to come in, we'll do the background checks. No residency requirements, no operating requirements other than you know you got to be in good financial health and you have to have the reputable, tested technology that will function for the consumer. Because ultimately, if it's a not great experience for the betting consumer, they're just going to go back to the illegal market.
Speaker 1:Right.
Speaker 3:So it's just really, really important that you have a legal and healthy, regulated marketplace that allows some of these great sports betting operators to come in and be successful.
Speaker 1:More of my own curiosity, going off script a little bit. So there is not a residency requirement. If you're doing it through the commanders or that, like because I mean I've got the MDM app on my phone, I went up skiing in New Hampshire, can't place bets, right. This is, it's not there in New Hampshire yet I'm registered in Virginia, so got to come back. But in these kind of situations, I'm a Virginia resident, go to the commander's game. I do have that opportunity.
Speaker 3:So, or it's tricky, it's tricky, it's tricky, it's tricky, and so what I meant by residency requirement was was the sportsbook operator being like corporately domiciled in?
Speaker 1:that case.
Speaker 3:Sorry, I see, okay, got you, but you bring up a good, you bring up a really good point, which is sort of the geo fencing technology that these online companies have to deploy.
Speaker 3:It's another add on right and, of course, some of those a mature market to many of those geo fencing technology partners are actually members of the AGA, because the responsibility is on the state and on the operator to ensure that if I am standing let's say I'm standing in friendship heights in Northwest Washington DC, I that technology will not allow me to use a Maryland account for, let's say, fanduels over on the DC side, because Fanduels is about to be permitted in DC, but not yet. But not yet.
Speaker 1:Yeah.
Speaker 3:So, unfortunately, you bring up New Hampshire is a really good example. New Hampshire actually has DraftKings as its sole provider for online sports betting. That's right. So if you had a DraftKings account in Virginia, where you live, and you go on vacation in New Hampshire, you pull the DraftKings app. It'll be fine, but your MGM app in Virginia that you use will not work in New Hampshire Got it? So sometimes it ports and sometimes it doesn't, yeah, and it's in that moment where I think the better is probably the average better is probably very confused. The sophisticated better is probably looking at this and was like okay, so I'm traveling this weekend. It looks like.
Speaker 2:I gotta download this app Right.
Speaker 3:But the average batter, that's just like man I got a good feeling about, like this guy pitching tonight for the socks you know, but you're going to have to pay closer attention to, sometimes, the regs, which is which is, I think, something that is typically encountered.
Speaker 2:Yeah, Well, the technology has to keep up with the evolution of the industry and I think this kind of segues nicely into this idea of responsible gaming right. And how has the industry encouraged that and made sure that you comply with all of those regulations as the industry continues to grow and become more complex?
Speaker 3:Yeah, this is a really big issue, elon, and I'm glad you brought it up because this is truly going to be a big factor in the sustainable growth of this market. So, just just a little quickly, just some some, some opinion data. So it's interesting because you've got nearly half of all American adults participated in some form of gambling last year, okay, and then you had a quarter of adults actually placed a bet, placed a physical bet at a physical casino and so, and as I said to you guys earlier, half of all American adults live in illegal and regulated sports betting environment. Nine and 10 of Americans now believe that. You know, the American gambling industry has like a net positive impact. And then again, and what we can talk about advertising in a little bit, but I think what's important is that now 53% of bettors know of at least one responsible gaming resource and 70% of bettors in the last year have seen an optic and responsible gaming messaging. So it's on the responsibility of the operators and the operator community and the industry to begin to ensure that more of those messages are pushed forward. Okay, now there are plenty of important resources that exist at the state level. You typically see at the bottom of every advertisement. You know, call 1-800-GAMBLER.
Speaker 3:But I think, ultimately, technology is sort of the next frontier and how we promote responsibility. What are the ways in which we can do a better job? We can build on the efforts that we're doing that meet consumers where they are right, which is on their phones, which is typically where a vast majority are actually betting, and begin to sort of deploy technology in a way that continues to lift up responsibility messages. So, as a couple of different examples, you know one there are self exclusion bands now readily available, where you can actually say you know what I need to tap out, so I am going to ban myself from this app, and you can communicate with the operating sportsbooks and say identify myself as a problem gambler and or I need to tap out and so they can exclude you. You can go to your state jurisdiction and request bands across all platforms, and that can include physical casinos or, let's say, physical sportsbooks. But what can AI do? Now? Right, with all of this opportunity, right?
Speaker 3:Even think about AI in this context, honestly because I think one of the biggest signs of someone that maybe might need a time out or is experiencing a moment is just when they are chasing losses. Right, and that is an identifiable betting pattern. When someone is sort of like chasing losses and the idea of chasing losses, so I lost.
Speaker 3:I rather double down and I am going to try to win back.
Speaker 3:And so you know what are the ways in which AI can be deployed, and again, in a way that protects privacy, in a way that ensures that this is all anonymized but can also sort of prompt people to say, hey, is it time to take a time out?
Speaker 3:Or a host you know whether that is an AI bot or a live person can come into the app experience and say, hey, you know, do you need help with something?
Speaker 3:You know what is it that you know you are trying to do right now. So there are opportunities here and again, like so many industries that, of course, you all are working with here at Penta, the industry is sort of building the plane while flying it, but it does represent, I think, a really important frontier, and actually that is something I am really excited about with this job is actually telling more of the innovation story behind legal gaming and behind sports betting as well, which is, I mean, there are technologists doing this work. There are, you know, so many smaller companies that are coming up with great ideas and great efforts to make this industry more nimble, to better train employees on how to identify problem behavior in a physical casino. That I think will also extend to the online experience and how companies that are sort of primarily, let's say, operating online whether it be an iCasino or it's in sports betting to sort of help betters in this space. So it truly is the next frontier.
Speaker 1:Yeah, and it's not a big leap in your mind right to easily see how AI or tech if I'm on a string of losses in my app starts ramping up the messaging about responsible gambling or the AI bot or whatever comes in. And, yeah, and I think that one-on-one communication I imagine you've got data that shows that that's where people are more responsive to it.
Speaker 3:And certainly in a physical context too, right, so and then what I would also add, and perhaps I'm jumping ahead, but it truly is an important commitment for the ecosystem of stakeholders now in sports betting.
Speaker 3:So leagues, teams, other organizations as part of this, and so the AGA. We have a public service campaign that has more than 40 professional teams and organizations that are a part of it. It's called have a Game Plan and it is basically an end-to-end public service marketing toolkit for these leagues and for these teams to deploy with, and there's four pillars. Right, it is keep it social, have a game plan, keep it social. Stick to a budget. Know the odds, like actually know what you're betting on. Right, like be a better.
Speaker 1:Sounds obvious but be a smart, yeah, a smart investor.
Speaker 3:be a smart investor, and then finally, like bet in the legal, regulated marketplace where there are these consumer protections. And so, to give you one example of what this looks like, when I was with the commanders, we were the first team to have a market access partnership and that was with Fandall and it was in Virginia, and we announced it and immediately some inbound came in media and otherwise hey, what are you going to do to support your fans that might be predisposed to problematic behavior with these apps? Right, the commanders are now, and we were very early, like I said, we were the first. So, with that responsibility, our team president at the time said to me it's like hey, joe, like what is our consumer awareness campaign? And thankfully at the time, aga had this. Basically, like I said, end to end toolkit.
Speaker 3:So, basically, what we did as the first NFL team to join have a game plan. We had 30 second radio television advertisements each quarter During our radio broadcast. We had have a game plan ads running in our club level sort of videos. We had have a game plan messaging on our LED ribbon, like right below the club level, and then we had have a game plan ad insert into our game day magazine, right. And so it was this idea that, like, let's begin communicating responsibility, because if you go into an NFL stadium, by and large significant portion of the alcohol advertising is about responsibility right, and I don't love drawing that comparison, but from an advertising standpoint I actually think it's relevant, particularly with sports teams and organizations. And so now what you're seeing is you are seeing more and more of leagues and teams beginning to participate.
Speaker 3:The NFL launched a very big partnership with the National Council on Problem Gambling, with a multimillion dollar research and grant support, and those research grants are being dispersed down into states for some relevant research and support services around problem gambling and that's different from responsible gambling, but for problem gambling. And then also, you know, the NBA and the NHL have partnered on a marketing partnership where there's ads across, like television ads on responsibility as well. So I think we're going to begin to see more of this and I think that's just super important. Because, as we've, as you've seen, a number of stakeholders again within the gaming ecosystem fully embrace sports betting. Then there's these duties and obligations that might not be written in statute, but there's this feeling that, okay, like we have these designated partners, when you pull up the ESPN app, there are preferred odds for a preferred sports book. So then you're gonna begin to see okay, well, we have to layer this in with responsible message.
Speaker 1:Yeah, and maybe we can wrap up on this. I was curious, as the industry continues to take off and some of the stuff you just talked about, I imagine beyond. Sports is next. You know you'll get to a point of online casino gaming and I don't know. You tell us maybe it's someday who's gonna win the presidential election, or what is Kate Middleton gonna wear at Easter, or whatever.
Speaker 2:What is she gonna show back up, Right yeah?
Speaker 1:How do you kind of I don't know put a governor on that in the extent of like we've gotta keep doing this the right way and responsibly.
Speaker 3:That's exactly the question that I think industry and policymakers are I think it's fair to say wrestling with. Yeah, there are examples in other foreign jurisdictions of the cart getting a little bit too ahead of the horse. Yeah, and what happened in those jurisdictions was actually the public had a snapback against the industry.
Speaker 1:Interesting.
Speaker 3:And that's where you began to see things like advertising restrictions. That's when you see the EPL banning front of kids. Jersey sponsorships for gaming companies.
Speaker 3:That's where, in certain jurisdiction like Ireland, I believe, there's no advertising for sports spending companies between 5 pm and 9 pm, and it is because the legal and regulated framework just began to sort of perhaps get too expansive and maybe, to your question earlier, too quickly. Yeah, I think the benefit of the American model and this is something that we talk about, the American model actually being exportable for some new foreign jurisdictions that are considering this is that, yes, it is regulated at the state level. Again 5,000 state and tribal regulators. They're determining what is an appropriate bet. Perfect example you couldn't get a legal, regulated bet on Taylor Swift at the Super Bowl in any American jurisdiction none whatsoever. And what was frustrating was that media was, of course, writing about.
Speaker 1:Because it was easy money.
Speaker 3:No kidding. I'm kidding. Major media outlets were writing about betting odds for Taylor Swift activity at the. Super Bowl and citing illegal offshore books, right. And so we're trying to be the top cop on the job, and so we call these reporters and we say, hey, can you do this correction? And we can all talk about how hard it is to get a correction and why some papers of record don't do that. So the further you get away from the field of play in this country, you're probably in an illegal book placing a bet.
Speaker 3:Some states do allow Oscar betting For integrity purposes. There's more confidence in permitting a bet on that than, say, whether Travis Kelsey is gonna propose to Taylor Swift. Where does it go from here, brian? Again, that's really the biggest question. Seven states have permitted eye gaming, eye casino, online blackjack, online table games. It's a big conversation. Certain jurisdictions are working through it right now. Maryland is one example. The AGA is not taking a side on this. There's a diversity of opinion between physical brick and mortar casinos that are members and others. There's a cannibalization argument about online and physical.
Speaker 3:That being said, what the American model, I think, has to continue to stay disciplined on, is ensuring that it's the community and the state policymakers that are determining the right pace and really not forcing that pace. And so I think, when you have the benefit of being collaborative with policymakers at each and every step of the way, you're able to sort of continue to keep the public informed about these opportunities as they become online, so that it isn't just this national sweeping expansion taking place and then suddenly the American consumer and the American public is like whoa Jamming the brakes. But I will say this and, brian, you and I talk about our kids a lot and coaching and stuff. But look, I think, more importantly, it's going to be something that we're gonna begin to have a conversation about with our families the expansion of gaming. It will become more normalized.
Speaker 3:What does that mean? What does that mean? Stuff like talking to your kids about hey, I noticed you saw that advertisement or you asked me what the line was the other night Like, is this something you're talking about with your friends and be just beginning to have a discussion with them as you would about any other sort of challenge they're beginning to see as they age. But what I'll also say is just the normalization of gaming in this country is providing such a tremendous amount of fun and entertainment, as well as this economic growth and impact. And so, as it becomes more normalized, suddenly now your uncle is a dealer at a table at a casino, your father or your mother runs a small business that provides an important service to the local casino.
Speaker 1:You're graduating with a computer science degree and going to work for one of these companies, Right?
Speaker 3:exactly. So that's where it's a really exciting moment. This is truly a dream job, and I'm sort of humbled to be able to take it on, particularly at this next opportunity for what we're describing this like. What is sustainable and healthy growth look like in a legal and regulated market in the country.
Speaker 1:Yeah, you got a big job ahead of you, but it's a great opportunity, so thank you for coming on.
Speaker 2:Thank you so much for taking the time to talk with us today. Good luck on your March Madness bracket. And, to our listeners, remember to like and subscribe wherever you listen to your podcasts and follow us on Twitter at PentaGRP, and LinkedIn at PentaGroup. I'm your host, elon, here with co-host Brian and, as always, thanks for listening to what's At Stake.