Citizens: Suppliers Exploring iGaming Innovation, ‘Workarounds’

In the gaming industry, there’s momentum to leverage iGaming-inspired products to drive increased innovation, potentially even in those jurisdictions where internet casinos aren’t yet permitted.

Citizens Equity Research analyst Jordan Bender notes that one of the more interesting conversations at the Global Gaming Expo (G2E) in Las Vegas last week was how suppliers can potentially leverage new frontiers to replicate the iGaming experience as “a potential workaround.”

While perpetual futures, or “perps,” are viewed as an important source of long-term, non-sports volume growth for the prediction market industry, traveling down the road of iGaming-inspired devices or wagering concepts may not be top of mind for prediction operators at this point, according to Bender.

Historical Racing Machines Serve as Inspiration

Historical racing machines (HRMs), the earliest iterations of which were rooted in horse racing, have been boons for some racetrack and regional casino operators, and that concept has been capitalized on in other forms.

For example, as Bender points out, Hard Rock International recently generated an estimated $1 billion in gross gaming revenue (GGR) on NASCAR-themed slot machines. Rather than spitting out numbers, those devices generate historical NASCAR results as the predetermined outcomes.

“While these products may technically fall under sports betting, we believe they highlight a potentially significant opportunity if executed correctly,” adds Bender.

The analyst says operators from the daily fantasy sports (DFS), sports wagering and sweepstakes casinos industries could soon test similar concepts on the basis that HRMs are more akin to sports wagering than they are new forms of chance gaming.

iGaming Model Is Enticing

For operators and suppliers alike, the interest in iGaming-inspired innovation at the sports wagering level is practical for multiple reasons. First, internet casinos generate higher margins than traditional sports wagering.

Second, iGaming bettors have a well-documented proclivity for embracing slot machines they’ve played at land-based casinos as well as trying new games. Those are among the reasons operators invest heavily in their content libraries.

Innovation may also be born out of necessity. While there’s optimism that Maryland, Virginia or Washington, D.C. could approve internet casinos next year, the road to legalization is tough, as highlighted by the fact that just eight states currently allow iGaming. That underscores the allure of possibly offering a part of the iGaming experience by way of sports betting.