Changing times mean changing attitudes and actions. Going into 2015, the American gaming industry has faced closings and conflicts, challenges and achievements. Its leaders must confront and resolve social, technological and political issues as they strongly advocate for the industry’s future successes and prosperity.
As American gaming expanded nationwide since the early 1990s, the American Gaming Association (AGA) worked to maintain positive community and governmental relations. They continuously extolled gaming’s job creation benefits and how it facilitated community revival. AT the same time, the AGA membership too often spent time reacting to external forces.
The installation of new leadership in July 2013 has “upped the ante” regarding proactive planning. Over 18 months, President/CEO Geoff Freeman and his support team have set three main goals:
• To evolve as “a passionate champion” for the gaming industry.
• To increase the number of new players.
• To communicate more to improve transparency about association initiatives.
Freeman knows what to do. As the Chief Operating Officer (COO) of the U.S. Travel Association (USTA) from early 2006 to 2013, Freeman united diverse travel-related groups. This alliance maximized how travel positively impacted American culture.
He aims to duplicate that success in the gaming industry with vital governmental, civic and financial entities. The AGA has partnered with numerous groups that share the same ultimate economic and societal goals.
For example, the AGA and child safety advocates will cooperate to stop casino customers from gambling and leaving their children unattended in cars. The AGA has formed a security and surveillance working group to discuss this and other customer protection issues. It is also working with the American Bus Association to guarantee a safe experience to casino bus customers.
Freeman states, “The industry cannot tell our positive story alone, which is why we’ve spent 2014 forming key partnerships. Joining with ‘Kids and Cars‘ helps the industry tackle the problem head-on.”
He has already enhanced the prominence of the AGA. In April 2014, the Association of Accredited Public Policy Advocates to the European Union named Freeman and the AGA as #17 of the top 69 associations in Washington D.C.
WHAT HAPPENED IN 2014?
The untold story is that most Americans do not fully recognize how gaming benefits the bottom line of local and state economies. The “Get to Know Gaming,” campaign is designed to tear down stereotypes about gaming.
Freeman claims that casino critics have faced a tough year and lost credibility as the industry facts refute their “doom and gloom” predictions. For example, for the November 2014 election, critics successfully included a ballot proposal that repealed the 2011 Massachusetts law allowing three casino locations across the state. Voters resoundingly rejected it.
He affirms the AGA’s pledge to protect the integrity of the games and the group’s commitment to strengthening communities and economies wherever gaming does business.
Freeman says, “We think the gaming industry has an incredibly positive story to tell. We’re sharing that story in communities across the country and look forward to expanding upon that next year.“
The AGA wants the gaming industry to have the facts immediately. For the first time in September 2014, Oxford Economics released much more comprehensive research than had ever been done before to provide a full picture of gaming options.
Under the gaming umbrella, the analysis incorporated commercial and tribal casinos, plus gaming equipment manufacturers. The Oxford report also included legalized Internet gaming in Delaware, New Jersey and Nevada, card rooms in four states, pari-mutuel gaming, cruise ship casinos, slots and video terminals in bars and other non-casino locations and lotteries. The report tracked information for 2013, the last full year that statistics were available.
The data explains the gaming industry’s huge impact on the U.S. economy, depositing $240 trillion in economic activity. In 2013, its 1.7 million American jobs-734,000 direct gaming employees/383,000 indirect supplier employees-topped the airline industry labor force. Gaming totaled $74 billion in income and generated $17.3 billion in federal taxes, approximately $11 billion in state and local taxes and almost $10 billion in state and local gaming taxes.
INITIATIVES AND FUTURE PLANS
The first full year of Freeman‘s tenure saw many changes. Because he and his staff believe in aggressive, proactive promotion, the AGA plans to actively expand its reach and interests in 2015 with the following programs:
Using the “Get to Know Gaming” theme, the AGA recently launched a new National Education Awareness Campaign. Its first television advertisement explains the AGA‘s participation in public conferences to publicize gaming. One example is the co-sponsoring of the sold-out Bank Secrecy Act meeting with more than 400 compliance professionals in attendance.
Freeman understands the need to constantly advocate for gaming to avoid negative repercussions in Washington and will continue its organized member fly-in sessions with congressional members. Personal meetings give legislators a comprehensive look at the national economic and political benefits of gaming.
AGA executives are restructuring the membership criteria and guidelines, believing it long overdue to expand the AGA membership base. The association has reorganized its roster and invited tribal gaming organizations to join.
The Florida-based Seminole Hard Rock Gaming is the first tribal-owned casino company and one of six new members on the AGA’s board of directors that represent a more varied constituency. This new diversity will expand how the AGA can reach beyond traditional commercial operators and equipment manufacturers.
“I think what we have right now are the most consequential changes in AGA’s structure since the organization was created [in 1995]. AGA, going forward, will represent all licensed and legally operating casinos and manufacturers in the United States,“ Freeman told Gambling Compliance Ltd. market researchers of Washington.
As illegal gambling continues across the U.S., sports betting remains an important topic that the AGA will closely monitor. In advance of the 2015 NFL Super Bowl game between the New England Patriots and Seattle Seahawks on February 1, the AGA predicted that betters would illegally wager $3.8 billion on the game. That compares to approximately $100 million bet legally on the Super Bowl each year. Illegal sports betting is 38 times greater than legitimate wagering.
Currently, only four states-Delaware, Montana, Nevada and Oregon-allow sports betting, in part because of the push back from the major sports associations. In the early 1990s, New Jersey had one year to enact sports betting legislation and failed. Under current Governor Chris Christie, New Jersey has unsuccessfully made multiple attempts to pass sports betting, even going to court. New Jersey legislators promise to fight on.
Freeman envisions years of future advancements and upgrades. One major focus is the “Next Generation Gaming Policy,“ a plan to promote innovation and reinvestment in gaming by creating partnerships with regulators and policymakers. Keeping the money available for research and development is crucial.
“The regulations and policies that brought the casino industry to where it is today are not the policies necessary to promote reinvestment and innovation in the future. Reinvestment can be new entertainment offerings, new retail, new restaurants, etc. Innovation can also be varied.
Our partners. IGT, GTECH, Scientific Games, Aristocrat and others seek opportunities in product reinvestment to be more compelling to today‘s and tomorrow’s customers. It is difficult to do that with extraordinarily inefficient, costly shipping rules nationwide,” states Freeman.
The AGA will not only lobby for its public acceptance and expansion, but will consolidate public information via updated, modern technologies. For years, the gaming industry has wanted to streamline regulatory compliance by standardizing all applications and forms.
In late 2014, the AGA introduced its “By the Book,” online database. The resource expedites the ability of stakeholders, policymakers, regulators, journalists and other interested parties to compare each applicable state’s commercial gaming regulations.
The database compiles and describes five key areas of gaming regulations and statutory requirements: regulatory oversight, licensing, taxation, responsible gaming and integrity.
The AGA released its unprecedented set of Best Practices for Anti-Money Laundering Compliance in December 2014. This followed a successful year-long effort to create a strong relationship with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
The AGA’s goal is to better understand their needs while providing better information about how gaming approaches business. The two-way communication and feedback proved positive on several occasions. Freeman hopes to enhance the relationship in 2015.
Doing business is not only about how an industry functions. It also relies on the economic and political climate surrounding its operation. Internet gaming and sports betting continue to be complex, controversial issues. Delaware, New Jersey and Nevada all operate online gaming programs with differing requirements and legalities, but none have reached expectations.
As directed by AGA Board Chairman and MGM Resorts International Chairman/CEO James Murren, the AGA will avoid the online gaming issue. Instead, the AGA will strive to increase its focus on issues that unite the industry. Leadership believes it vital to do no harm to brick-and-mortar operations.
Freeman says, “AGA continues to play a very prominent role behind the scenes in making sure that brick-and-mortar casinos and the operations within them are protected. That’s an area where we’ll continue to play a role for many years to come.”
Protecting the casino properties also includes mitigating any financial risk following a possible terrorist attack. Gaming is Nevada’s number one industry, and the Las Vegas Strip enjoys worldwide recognition and exposure. Across the U.S., casino properties are often such visible venues within a jurisdiction that any threat must be addressed.
The AGA pushed for reauthorization of the Terrorism Risk Insurance Authorization (TRIA) program, which offers terrorism risk insurance to gaming companies. Congress passed the measure, effective through 2020, on January 6. If damaged or destroyed due to terrorism, the federal government will shoulder some of the costs with the insurance companies.
Not only does the TRIA protect existing gaming properties, it is necessary for capital investments. AGA Senior Vice President of Public Affairs Sara Rayme says, “The banks require this in place in order to get financing and a loan.“
Politically, voters and the new Republican-controlled Congress are preparing for the 2016 presidential election. The Republican National Committee (RNC) released its nine confirmed 2015/2016 presidential debate dates. Republican governors lead six of these states; Democratic governors lead the other three. Three more are pending.
The Republican National Convention is scheduled for mid-July 2016 in the casino city Cleveland, Ohio. The Democrats‘ convention will be a week later. The city has not been finalized as of press time.
Freeman will emphasize to all potential candidates that gaming in these states supports 473,500 jobs and generates $10 billion in taxes. He want them to inform these employees/voters which candidates support their industry.
What can the industry anticipate this year? Tax reform? New business regulations? New labor laws?
Do not expect much, advises University of Virginia Director, Center for Politics, Dr. Larry J. Sabato. He states, “We live in a highly partisan era, reflected by Congressional votes. On key issues, a large majority of Democrats vote against a large majority of Republicans in both houses of Congress.
For years, President Obama had a Democratic Senate majority (led by Nevada Senator Harry Reid) that could stop most Republican House bills before they reached the President’s desk. Obama will now veto legislation more often. He will work to deny Republican Senate Majority Leader Mitch McConnell of Kentucky the six Democrats needed-for a total 60 votes under Senate rules-to move forward the most significant votes. McConnell only controls 54 Republicans who do not all vote in unison.
I predict far more gridlock than compromise on the high-visibility issues, but I don’t rule out the occasional compromise. Both sides want to show progress on a few items like trade, although these examples will be rare.“
Whatever happens this year, the AGA, Geoff Freeman and his staff will be front and center as an advocate for gaming. For new generations raised with gaming in their communities, its acceptance and favorability will continue to rise.Closings and conflicts, challenges and achievements. What does 2015 hold for the US gaming market and the American Gaming Association? Sharon Harris asks and answers