Adam H. Smith’s “Digital Wallets and Casino Risk” — Featured by Indian Gaming Magazine
REDW LLC | July 22, 2021
In a recent feature with Indian Gaming, REDW Principal Adam H. Smith discusses innovation in the tribal gaming industry with the introduction of digital wallets, and the accompanying risks that arise in the process of adapting to cashless gaming:
Adapting and responding to market innovation and changes in desired user experiences is one of the most difficult things a company must face, and this is especially true in the gaming industry today. There are multiple converging innovations and changes taking place in gaming including retail and mobile sports betting, cashless gaming floors, and the expansion of digital currencies. Throughout tribal gaming’s history, one of the most notable and significant technological developments came with the advent of ticket-in/ticket-out (TITO). This common practice today did not start with sweeping enthusiasm, as the fear of losing loyal patrons who preferred the sound and experience of physical coins was at the top of everyone’s mind. During this market change, many felt the switch to TITO was more impactful for the traveling tourist in Las Vegas, but not particularly needed for local tribal gaming facilities. Of course, time has provided the perspective of knowing that TITO was a major success, not only operationally from an efficiency and cost standpoint, but also because patrons have come to prefer the ease of a ticket versus carrying heavy coins.
Today, the industry faces another adaption, but in this case, the change has multiple angles of innovation happening at the same time. As it relates to these varying changes, whether it be mobile sports waging, cashless gaming devices, or mobile gaming in general, for simplicity it is referred to as cashless gaming. As gaming facilities have rolled out different forms of cashless gaming, a need has surfaced – the ability to conveniently use these new gaming experiences through a digital wallet, or mobile financial application. This gaming innovation is rather simple and has been around in commercial jurisdictions for years. For large gaming facilities that have the resources and capital to roll-out a proprietary digital wallet, the transition to cashless gaming is and will be rather simple. But what about the other 95% of tribal gaming facilities nationwide that will use some other kind of third-party digital wallet? There are several questions that must be answered prior to rolling out a mobile currency exchange infrastructure that can be used with gaming devices, connected to a sports wagering application, and used as payment for various accommodations. For example, what information is being provided to third-party providers? Are there privacy concerns? Is the provider of the digital wallet either directly or indirectly a competitor? What due diligence is needed by tribal gaming regulatory commissions and management? Ultimately, how will this affect traditional casino risks?…
Access the full article, here.
This article was originally published on July 8, 2021 by Indian Gaming. Shared with permission.
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