G2E 2023: Outlook and Trends

By: Steven Eichorn

This year’s G2E (the premier gaming conference in North America), held annually in Las Vegas, Nevada (October 9-11, 2023 this year) is shaping up to once again be the premier conference for the gaming industry. The expected number of worldwide attendees from the global gaming industry is over 25,000 and it promises to once again bring together the entire gaming industry under one roof. It is exciting to again have mask-free conference (we don’t take those for granted anymore!) and G2E is always a great opportunity to connect with gaming professionals from around the globe, following the prior years of pandemic-related travel restrictions.

While there are certain topics and features that are staples of the lineup at G2E (e.g., payments, regulatory environment), several new ideas and trends will be explored at the conference. These trends highlight the upcoming offerings and challenges for the industry. The G2E conference is also the key meeting place for business representatives to meet and discuss strategic alliances.

New Faces at G2E Include Large Investment Banks

It is noteworthy that representatives from investment banking houses like Blackstone and Jefferies will both be in attendance and presenting at G2E. Blackstone has become a significant player in the online gaming investment community and, over the past few years, it has made a number of investments and transactions in the online gaming industry. For instance, (i) in February 2022 it bought Australia-based casino operator Crown Resorts in a $6.3bn takeover, (ii) in May 2019, it invested $196M to become a minority investor in Superbet (the largest omni-channel sports betting and gaming operator in Romania), and (iii) in July 2017, it acquired Clarion Events (the parent company of iGaming Business). More recently, in May 2023, the Blackstone Group was reportedly considering an initial public offering (IPO) for Cirsa (a renowned Spanish casino operator).

Sportsbook Consolidation Trend

Prior conferences showcased the expansion of legalized sports betting and the associated growth opportunities; however, this year’s conference (with sessions like “Navigating Regulatory Impacts: Mergers, Acquisitions, and Market Entry” and “Capital Financing and Consolidation in a High Interest Rate World”) will likely focus more on the consolidation efforts of the existing operators trying to solidify their market share and strengthening their branding efforts.

For example, we have recently seen a number of major consolidation transactions, such as PlayUp’s complete exiting of the U.S. market (although it had only operated in Colorado and New Jersey). In addition, PointsBet was sold to Fanatics (which still intends to operate a sportsbook, so there wasn’t a loss of an actual sportsbook option). Finally, this past week saw the announcement that ESPN and PENN Entertainment were combining to launch a new branded sportsbook, ESPN BET, which is a rebranding of PENN Entertainment’s current sportsbook (and also the formal end of PENN Entertainment’s partnership with Barstool). Additionally, WynnBET also announced that it was going to close its online sports betting and iGaming platform (mostly in those states in which it does not also have a land-based presence).

WynnBET specifically highlighted the “outsized marketing spend through user acquisition and promotions in online sports betting” required to competitively operate in the online gaming market and instead intended to focus on “the presence of numerous other investment opportunities available to us around the globe.”

In light of these consolidation efforts, it will be interesting to see whether any of the smaller sports betting operators will be able to gain traction in the U.S. Moreover, although there has been significant consolidation within the industry, there remain opportunities for the existing operators and some operators have even shown increased optimism about expanding their market share. For instance, Jason Robins (CEO of DraftKings) has stated that “I think the best days of growth still lie ahead of us.”

Fantasy Sports Challengers

One potentially interesting recent development is the rise of fantasy sports challengers that offer single-game prop styled betting, which seems to have taken market share from the larger sports betting operators.

Nonetheless, these new DFS challengers have recently found themselves under a fair amount of regulatory scrutiny and we expect that trend to continue. For example, Alabama, Maine, and Wyoming have all recently sent out letters to various DFS operators expressing concern about the prop-styled fantasy sports offerings. Further, the Michigan Gaming Control Board has a pending proposed rule set that would prohibit fantasy sports operators from offering “Proposition selection or fantasy contests that have the effect of mimicking proposition selection” or “Any fantasy contests that involve, result in, or have the effect of mimicking betting on sports.”

In an ironic twist, it was merely a few years back that many of the (then startup) DFS companies were challenging the established sports betting industry and arguing that their DFS products were skill-gaming (and not sports betting). Now, the next generation of DFS companies are challenging the existing online sports books (who, a few years ago, were themselves the startup DFS companies arguing DFS was skill gaming and not sports betting) and attempting to argue their products are skill-gaming (and not sports betting).

The rest of 2023 promises to be an exciting time for both the sports betting industry and the fantasy sports industry and, in particular, it is fascinating to watch the battle between the next generation DFS companies and the more established operators- the stakes are high and it’s literally “bet the company” actions at play.

Related: Online Gambling Lawyer