Wynn Resorts CEO condemns igaming cannibalization debate as “reductive”
Craig Billings said he remains “neutral” on the subject but believes that the debate has had a “pretty narrow focus” up to this point
Wynn Resorts CEO Craig Billings has labelled the ongoing debate on online casinos’ potential cannibalization of land-based gaming “reductive.”
Taking to LinkedIn, Billings said the debate was centred around a “pretty narrow focus” on total addressable market and the tax base, failing to take in the multi-faceted conversation needed to approach the topic.
Billings pointed to the fact there are almost 1,000 commercial and tribal casinos across the US, with concerns over TAM impact for land-based operations narrowed among the leading brands.
He said: “With the introduction of online casino, you are allowing the entry of many new and capable competitors, often times into states that have had a very stable competitive dynamic for many years.
“No matter which side of the cannibalization versus no cannibalization debate you are on, assuming that the (positive or negative) impact will be uniformly shared by all regional casinos is pretty naive.”
Billings noted that only 10% to 15% of land-based casinos can offer an omnichannel experience to players, and casinos owned by big national companies will benefit most from online casino legalization.
He added: “The properties that might actually be able to compete with the digital native online gaming providers are those that are owned by the large national gaming operators.
“What about everyone else? Market share will shift. In land-based gaming, there will be market share winners and losers. No doubt in my mind. As an operator, the TAM doesn’t pay my bills, my share of it does.” Billings also spoke about the concerns raised by brick-and-mortar operators that the legalization of igaming would cause job losses, a concern also shared by trade unions in recent weeks.
Billings said: “Don’t expect the unions, particularly in blue states, to just sit back and let online casino happen. They will take a position because that’s their job.
“They’re not going to pore over analyst reports on cannibalization to form an opinion on the topic. They’re going to act preemptively. And, like it or not, in many states, legislators listen to unions. After all, their membership votes early and often.”
Looking ahead, the Wynn CEO concluded by citing the potential social pushback from the public and government, pointing towards the tandem growth of online sports betting in Australia and subsequent regulatory changes.
Billings commented: “Putting a casino in everyone’s pocket is great for the TAM, no doubt. And all CEOs love TAM expansion. But there comes a point when TAM expansion pushes up against societal acceptance.
“Whether right or wrong, perception or reality, when casino gaming starts reaching every corner of society (including in peoples’ pockets), there is a reaction.
“If we’re going to debate the impact of online casino, let’s look at all the implications and not just the headlines of TAM and taxes. For me, it is absolutely affecting my thought process with respect to where and how we at Wynn will deploy capital in the US.”