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Podcast: How COVID-19 Has Changed the Gambling Industry

Podcast with Dr. Gary L. Deel, Ph.D., J.D., Faculty Director, School of Business, American Public University and Dr. Bo Bernhard, Executive Director, International Gaming Institute, University of Nevada Las Vegas

Casinos, like all industries reliant on tourism and travel, have been hit hard by the COVID-19 pandemic. In this podcast, Dr. Gary Deel talks to Dr. Bo Bernhard, Executive Director at the International Gaming Institute for the University of Nevada Las Vegas, about the current state of the gambling industry.

Start a hospitality management degree at American Public University.

Learn about some of the changes happening in casinos, including a shift towards automation and other technological advancements. Also, hear about the rampant growth of online betting and other mobile gambling platforms.

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Read the Transcript

Dr. Gary Deel: Welcome to the podcast Intellectible. I’m your host, Dr. Gary Deel. Today, we’re talking about the gaming industry.

My guest today is Dr. Bo Bernhard. Bo began his research career at Harvard University where as an undergraduate, he completed a double major in sociology and psychology and published a thesis on the community impacts of the gaming industry in Nevada.

In 2011, he was named Executive Director at the International Gaming Institute for the University of Nevada Las Vegas, where he now oversees all research and academic functions. Representing the university in these roles, Bo has delivered over 200 keynote addresses in clinical, regulatory, government and policy settings.

He has published in the top journals in both the business sciences and social sciences, and currently serves as executive editor for a leading peer-reviewed academic journal, “Gaming Research and Review.” Bo, welcome to Intellectible, and thank you for being our guest today.

Dr. Bo Bernhard: Thanks for having me, Gary.

Dr. Gary Deel: Absolutely, I appreciate it. Full disclosure to our listening audience: we know each other from my doctoral work. You were one of my professors and my dissertation committee members at UNLV a few years back.

Dr. Bo Bernhard: We do indeed. Yeah, we go way back. But I have to say, I have to point out to the listeners, you were fully formed when you arrived. Sometimes that happens with doctoral students who are outstanding from the moment they arrive in your classroom, and so I can’t take any credit for the quality that’s happened ever since.

Dr. Gary Deel: Or the consequences otherwise.

Dr. Bo Bernhard: That’s right.

Dr. Gary Deel: Well, thank you. I’m very flattered by those remarks. I remember distinctly us bonding over Carl Sagan and his research texts in your class.

Dr. Bo Bernhard: Exactly, right.

Dr. Gary Deel: It was definitely a good time. So we’re here today to talk about gaming and what’s happening in that world. It has been a few years I’ve been removed from the gaming industry as I moved back to Orlando in 2015, but I’m curious to know, to sort of address the elephant in the room. What has happened from your perspective in light of the current apocalypse that we’re dealing with the pandemic that is COVID and what’s open, what’s closed, and how is gaming surviving this, if at all?

Dr. Bo Bernhard: Yeah, I think it’s important. You know me, Gary, I love the long historical perspective, right? The kinds of perspective that Carl Sagan brings over many, many, many, many years, and the gambling act has long, long been commercialized in a wide variety of ways. Dating back, cavemen used to gamble with bones, right?

And it’s been turned into a business in a variety of different ways all over the planet, and right now we certainly are facing one of the more significant challenges in the history of the gambling act and its commercialization.

We’re especially feeling that in a particularly acute way here in Las Vegas, where there was a period of time there and it was surreal. The Las Vegas strip, which is just down the road from your alma mater the University of Nevada Las Vegas, was dark and was empty and it really did look apocalyptic.

It looked like a sci-fi movie and not only for those who visit here, they think, “Well, the party was shut down and that’s too bad,” but from the perspective of the community who lives and works here, I mean, that’s a massive part of the employment base. And so it sort of symbolized the stark street in the center of our town, all of the scary stuff that was happening in the world beyond.

Las Vegas has since seen a reopening period. There have been some starts and stops, some ebbs and flows, but as it stands now, we’re at about 50% capacity. And you’re seeing that play out in a lot of different places around the world.

In general, local casinos — casinos that cater to a customer base that’s within, say, a two-hour drive — are doing better than places like Las Vegas where you have to often take a plane to get there, so that makes sense from the perspective of how difficult travel’s gotten for all of us. But right now is a challenge, it’s certainly unique in my career and I think in the career of many who’ve been in this industry much longer.

Dr. Gary Deel: Absolutely. So did cavemen really gamble with bones? Is that…

Dr. Bo Bernhard: They did really gamble. There’s a great book that a colleague of mine, David Schwartz, wrote called “Roll the Bones,” which is the history of the gambling act and starts with literally that scene.

Dr. Gary Deel: Wow. I did not know that went as far back, but I can certainly understand you had to do something to pass the time.

Dr. Bo Bernhard: That’s right.

Dr. Gary Deel: For sure.

Dr. Bo Bernhard: Seems to be wired into our DNA. There’s something about humans that makes us find interesting, having something at risk when the outcome is in doubt, right?

That’s kind of true when you watch a movie, right? You get invested in these characters and you’re really hoping that the good guy with whom you’ve identified wins in the end. But you’re not really sure in the end whether the bad guys, the good guys are going to win. We find that really, really fun.

And the same thing happens at a craps table, right? You’ve got something on the line, and you’re not really sure how things are going to turn out. There’s something in our wiring as humans that finds that fun.

Some find it more fun than others and some find it way too fun and develop addictions. However, it is something that seems to be wired in our DNA and certainly is present throughout human history.

Dr. Gary Deel: I’m going to take a hard right here, but you just mentioned it. I mean, addictions and so I’m curious to know, I don’t know that we ever discussed this years ago when we worked together but, in terms of legalization and the ethics behind the industry, what is your position on that?

Because obviously there’s different jurisdictions and I think it’s mostly illegal at this point across the spread, but there are places obviously where you can gamble legally. So what are your thoughts on that in terms of the societal impact and where it’s going?

Dr. Bo Bernhard: One of the more remarkable things over this expansion period, and really you can look back to the period when Atlantic City, for example, came on board and Las Vegas effectively had a competitor to its monopoly status. And that was at a period of time where we saw the beginning of a massive period of gambling expansion.

Now gambling is legal in 48 of the 50 U.S. states and actually a fairly similar proportion of nations worldwide. That’s part of what we do with the International Gaming Institute — any given year we typically look at six continents and study this thing — but what’s remarkable is we actually measured gambling addiction rates in the late ‘70s, early ‘80s and they’ve stayed fairly stable, which might argue for a biological programming with addiction. There does seem to be, at least in my observations amongst problem gamblers, they go to a different place, right?

And that place is in part dictated by biology and this starts to make sense when you realize that there’s a proportion of the population that just can’t drink and that proportion of the population seems to be fairly stable.

Those folks seem to have a different biological programming. And one of the really fascinating things that’s happened in this field of studying gamblers who gambled too much in addiction is that the parts of the brain that are activated by gambling addiction appear to be the very same ones that are activated amongst those who develop alcoholism, which doesn’t make much sense intuitively.

Because you think, “Well, with alcohol, I ingest vodka. You can’t mainline video poker, right?” And yet we do a lot of things in life that affects our neurochemistry, right?

Watching a basketball game with your favorite team playing affects your neurochemistry, but we certainly have a situation where that biochemistry appears to be driving a fairly stable rate of addiction. So we haven’t seen what I think some might have expected with the expansion of gambling with a consequent uptick in gambling addiction.

Dr. Gary Deel: Absolutely, and I think I misstated earlier, I had to reverse. It’s legal in more places than it is illegal now, as you mentioned 48 states legal.

How does that compare? Because I know you do a lot of work internationally. So when we look at the — I think it’s 211 countries, maybe — what does the spread look like globally in terms of legalization for gambling?

Dr. Bo Bernhard: Yeah, it’s remarkable. I mean, if you had told me, and part of my biography is that I’m a native Las Vegan; I grew up here. If you had told me as a kid growing up in the shadows of these bright lights that squeaky-clean Singapore, a place where it is technically illegal to chew gum because gum is dirty and sticky and gets on the soles of your shoes, will be a place that will welcome the most spectacular Las Vegas-style casino resorts on the planet, I would have said that’s crazy, right? That’ll never happen.

Singapore looks like Orlando, it looks like Disney Land, Disney World I suppose, in that it’s just pristine. And so the notion of bringing something that has long been stigmatized like gambling into its backyard seemed kind of absurd, and yet that’s what we’ve seen in jurisdiction after jurisdiction.

Mainland China still lacks casinos. It’s not that they don’t have gambling; they have a lottery and it’s not like they’re not scratching the gambling edge. They’re going to a tiny little enclave called Macau, which generates vastly more gambling revenues than the Las Vegas strip.

But in every corner of the planet, whether it’s South Africa or all over Europe, or now throughout South America, they have what really could be characterized as Las Vegas style casino resorts, and in many ways in much the same way that Detroit sort of was responsible for the vast majority of the invention of the automobile, which they then exported out to a happy planet of consumers to consume.

Las Vegas, for better or worse, has invented this experience that is a hotel casino, restaurant, nightclub, day club, retail, you name it. It’s all under one big roof, including gambling, and they’ve sent that out to a whole planet’s worth of consumers.

And in the same way that GM and Ford were in Detroit, but driving a global economy of automobiles, so too are companies now like Wynn and Las Vegas Sands and MGM, global behemoths that have exported their product to the rest of the planet.

Dr. Gary Deel: Now, it’s interesting you mentioned some of the international destinations that have more recently adopted gambling because, of course, Vegas was arguably built on that culture to a certain extent. But I’m curious to know if you think, because you’ve certainly had more exposure to those destinations than I do.

Is it a product of an evolution of values or ethics where people are saying we’re looking at this in a new light, we no longer see anything wrong with this practice or this behavior or this habit? Or is it a product of frankly, we still look at this as wrong but it makes us so much damn money that we don’t care.

Dr. Bo Bernhard: I think the answer — that’s a really astute question, actually — and I think the answer is yes, I think it’s both. Well, we’ve tracked this in the United States; there definitely year over year is a dramatic rise in the sociological acceptance of gambling as something that’s okay for my neighbors to do. It might not be something that I choose to do, but it’s something that I think we should allow in society, much as we’ve seen similar acceptance of marijuana, for example.

But at the same time, when you look at the legalization processes and jurisdictions around the world, they tend to track economic downturns or the very least moments when government jurisdictions are in need of new pots of money. And in many ways, gambling is sort of like a voluntary tax.

It’s an act that governments often tax very, very highly, but it’s one that of course the consumer can opt into if he or she wants or opt out of, but it often is the case and I’ve testified in gosh, dozens, maybe hundreds of these jurisdictions that politicians of course seek new revenue streams, just like good business people, I suppose, and especially during times where they have to do some belt tightening.

And when that’s the case, gambling often presents a compelling sort of opportunity to generate new revenue. I would point out that not all gambling revenues have the same kinds of impacts.

If you’re creating a tourism destination-oriented, integrated resort casino with all the bells and whistles that I referenced earlier, where they’re almost by definition generating new money into the economy because folks are flying from, for example, Malaysia into Singapore and leaving their money there, that tends to be associated with higher quality economic and community impacts than sort of more local, a slot machine in a convenience store that really only draws customers from the neighboring two blocks.

So yeah, as you can understand, I’m sure the economic impacts of that are far less substantial and the community impacts are sometimes far less positive.

Dr. Gary Deel: Absolutely. I’m curious; we talked about a few examples in Asia, but another major population center in Europe, what is the status quo there because I don’t unfortunately travel nearly as much as you do internationally as much as I would like to.

So I know that you’re an international man of mystery. So what’s the rest of the landscape look like among modernized countries with perspectives on gambling?

Dr. Bo Bernhard: Yeah. Europe is a really interesting place to study for someone like me as it pertains to gambling because of course what happened in Europe and now of course, years later, we’re seeing the Brexit phenomenon.

But Europe, of course, agreed in general to a European Union, whereby state monopolies were no longer allowed. That was kind of the whole point was that we’re going to kind of destroy borders and let businesses and even governments spill over the borders and become more integrated, kind of like a United States of America, right? That’s a lecture for a political scientist to give but that’s a simplistic version.

Well, the state lotteries, right? In many cases, the national lotteries of each of these countries were like “Whoa, whoa, whoa, all of a sudden we can’t do this if this is the new normal?” And so they received exemptions from EU law and in many cases had to agree to all sorts of really interesting stipulations whereby for example they would have to support noble causes.

So for example Norsk Tipping, the Norwegian national lottery, has for years given money to youth sports and there are positive outcomes. And we’ve seen that with, for example, state lotteries in the United States where the Georgia lottery is famous for sort of dedicating its resources and funds to higher education in that state.

But this was really sort of a supercharged version of that and that tracked the EU phenomenon very directly. So as politics goes, gambling goes, in a lot of different places around the world.

Dr. Gary Deel: For sure. My intuition tells me when I spent years out in Vegas studying and working on the Strip that there are certain cultures that are perhaps more predisposed to like to gamble than others. And I know that, for example in Vegas, the Asian demographic of visitors of travelers and tourists is huge.

People are willing to get on a flight 18 hours over the Pacific just to get to Vegas and then do some gambling. And there are various superstitions and beliefs in those cultures, not to say to put any one culture or group of cultures in any one box, it’s not a monolith.

But that was certainly a significant trend out there as compared to, say, Americans, or as you mentioned Norwegians or anybody else. So is there sort of a trend line there where we can point to certain cultures that are more predisposed than others?

Dr. Bo Bernhard: Yeah. I think one of the more interesting sort of anthropological phenomena I would point to on the Las Vegas strip is the rise of baccarat. Baccarat is a game that is almost exclusively played by Chinese gamblers.

Those revenues are not coming from Des Moines, Iowa, right? They’re coming from, as you put it, over the Pacific.

Now baccarat is a French game, or I should say it’s a game invented in France. It’s very quickly resolved; it’s sort of very straightforward. It’s a luck game, although there are certainly, as you noted, are superstitions that play into the actual play of the game.

If you look at the baccarat numbers over the years, they’ve skyrocketed in a way that tracks of course international inbound travel to Las Vegas. Las Vegas now is a direct flight from Beijing; again all of this was pre COVID. But this is something that we’ve seen over the past few years and the high rollers from that particular part of the world are very, very attractive of course to companies like Wynn, where you worked.

Dr. Gary Deel: Sure. Now, you mentioned COVID again, and I know we opened with a question about that. So I’m curious to know sort of big picture and obviously we’re recording this in September 2020, we’re still sort of amidst the pandemic and there has not been a confirmed vaccine distributed yet. There’s no proverbial end in sight, although we’re all hopeful for a brighter better 2021, I guess.

So what does the gaming industry look like post-COVID? Have these companies already begun to think about will there be a permanent change to the look and feel of a casino floor in the wake of the fact that this is the first time in arguably 100 years that we’re seeing a pandemic with this kind of magnitude and impact?

So I’m just wondering if we’re anticipating, by analogy I often think about the fact that everybody in society at least here in America today are wearing masks with few exceptions but we all do that and I often wonder to myself if that will stick beyond COVID itself as people start to realize maybe this is just a good social practice to avoid catching the flu or the common cold and that just becomes as common as carrying your keys and wallet around when you go outside of your house.

Dr. Bo Bernhard: Yeah. We’re actually recording this on September 11th, 2020.

Dr. Gary Deel: We are.

Dr. Bo Bernhard: And that brings to mind a really interesting analogy as you bring this important point up, because you think about the kinds of things that we sort of after 9/11 adopted as normal. Certainly going through security at an airport changed dramatically and now it’s something we have come to accept, right?

And one wonders to what degree there will be stories of that nature. Maybe it will be wearing masks, which certainly is prolific throughout Asia. You see that quite a bit, even in pre-COVID periods in large part because they went through the SARS period and in a very, very painful way.

So yeah, it’s a really fascinating, again, sort of sociological question. We at the UNLV International Gaming Institute actually have done some finger on the pulse research or tried to at this particular historical juncture by relying on our alumni network.

So people like you, Gary, but also folks who have graduated from our executive development program, we’ve pulled. Now, these are individuals who lead casino companies and gambling companies all over the planet. And it’s interesting because, to your point about what will stick or what endures, a lot of the best practices that are emerging when we interview people who are trying to figure out how best to run a very high-touch business, right?

This is very much a hospitality business, very much a business that relies on at least some proximity, relies on large crowds, and as we’ve asked them, “What do you think will change?” One of the themes that’s interesting is that the more things change, the more they stay the same.

By that I mean a lot of the interviews that we’ve done, that’s pretty in-depth interviews with a lot of different executives who have said, “You know, it just kind of reminds you of what’s important.”

Communication, if the three rules of real estate are location, location, location, the three rules of leadership and maybe customer relations are communication, communication, communication. And we all know that, right? We’ve all said that probably a million times.

But really thinking about the amount of information that you need to give and effectively and how you communicate with, for example, employees who are afraid that the person across the table from them at a blackjack table might be carrying COVID, might be contagious.

How do you communicate? How do you create best practices? That communication, communication, communication rule has really been one that has emerged from our research at least.

Another thing is connectivity and again, this probably follows that used to be that the casino industry, because I think of its highly competitive nature really didn’t lend itself to cross-border collaboration.

By that I mean, we would have people come to our executive development program from, say, Company A, that’s a mega-company sitting next to somebody from Company B, that’s another mega-company and competitor.

And the fear amongst both attendees would be, “I’m afraid I might spill more than I absorb.” In other words, I might give away the secret sauce more than I will gain from talking to these people openly and with vulnerability.

And we’ve tried to get away with that as educators, as a teacher I’m sure you can appreciate that, and found that being a little vulnerable and open and sharing even across competitive borders is one of those best practices that, again, I think it was probably always true, never more true than now when we need to find the best way to keep a customer safe in a casino environment. So again, the more things change, the more they stay the same.

Dr. Gary Deel: Absolutely. Well, you mentioned masks. I have been to China once and I remember — this was way back in 2011 I want to say — and I remember being surprised by all the masks. I was in Shanghai and saw a lot of people walking around with masks and at that time, pre-COVID, it was just so foreign to me, but it does make sense in light of the context.

It has taught me to pause and think about just a moment ago because you mentioned 9/11, which I think is a really good point in terms of the permanent changes that lasted beyond the moment. Reflecting today, it’s been 19 years and it’s crazy.

But it caused me to think about the World Series of Poker. I’m not a big gambler, but I enjoy watching the Hold ‘Em series and I thought to myself, “Those guys probably wouldn’t mind wearing the mask, because it’s one less way of giving away a potential tell, I guess.”

Dr. Bo Bernhard: That’s right. That’s right. You pair masks with sunglasses as many of us have learned.

Dr. Gary Deel: Sunglasses and caps.

Dr. Bo Bernhard: You steam up your sunglasses, but you’re not going to give away too many tells at a poker table.

Dr. Gary Deel: That’s right. You might as well just put a big bag over your head.

Dr. Bo Bernhard: That’s right.

Dr. Gary Deel: At that point. So actually, this is as good a time as any to cut to a break and then we’ll return. I want to talk a little bit more about the future in terms of technology and automation and what that might mean for the industry.

When we left off, we were talking about some of the cultural ramifications and what might last in terms of the wearing of masks and sanitation and concern about exposure to other people.

The digitization and the technology-oriented gambling has been around obviously pre-COVID for some time, but I’m wondering if this might accelerate that transition to online gaming or even gaming in a digital sense, in the same way that people can go into a casino and not interact with any human employees, just sit down at a slot machine and gamble by themselves.

Do we see that might proliferate at a rate that it hasn’t previously? Because I think about the fact that for example, retail establishments like Walmarts and Targets and Home Depots et cetera. They had their stint with self-service technology before COVID, and they were slowly making that transition for obvious reasons of cost savings and efficiency and reducing the labor overhead.

But now I feel like there’s a new motivation and that is that, you know, in addition to all of these other factors, to push people into that self-service world, we’re also looking out for your health and safety and that of our employees.

So if we can eliminate that person, you might have to come into contact with and potentially be exposed to something in the process, we’re doing you a favor as our customer. So I’m just wondering if that might see reverberations in the gaming industry.

Dr. Bo Bernhard: Absolutely. You’ve hit on a really interesting point because while Las Vegas was shut down and certainly there were big stories on the demise of casinos, gaming did not stop. In fact, playing games on your phone, whether they’re gambling games or other sort of competitive games, and of course the distinction there is just gambling games mean you have a wager on the outcome, right?

Those were all way up during that, especially the intense quarantine COVID period, right? And basically from two-year-olds is we often lament who get very easily onto a computer screen and can play with an iPad very skillfully at an early, early age, all the way up to our great, great grandparents who are similarly adept at playing games on screens. We are all gamers now, right?

Gosh, I remember when I was growing up people were worried about Atari thumb, which was a thumb injury that you got from the home Atari video gaming system because you would use the joystick and you would move it with your thumb. And there were horrible, horrible stories about how kids had to have slings on their arms because their thumb was all out of whack, right?

Well, at no time in human history have we had more access more quickly to more games than we have right now. And from a pure business perspective, that’s on the casino industry to try to figure out where that convergence is. We’re definitely seeing a convergence of the video game world, the world to which I just referred to which ties its DNA back to PAC-MAN and the like, and gambling games.

And certainly there are companies— GameCo is one of these that is seeking to create a video game-like experience in a slot machine. But in direct and indirect ways, the whole industry needs to figure that out because once more, people are engaging their product, they’re just not doing so under their roof so to speak.

So if you own a mega-casino resort with all the glitz and glamor and you’ve paid for exploding volcanoes and gorgeous fountains out front and yet folks can scratch the gambling itch on their iPhone, you maybe have invested in something that at the very least faces a bit of a threat. The metaphor, the analogy that I bring up in class, maybe I did when you were in class years ago Gary, is that of movie theaters, right?

For years and years and years, certainly in the early 1900s or mid-1900s, you went to massive cathedrals of movie consumption and you got all dressed up in a suit and you would go there with thousands of people and sit in the balcony and sit in a place that looked like it was fit to host a Broadway play, just a gorgeous, expensive mega building in, for example, Southern California.

And then what came along was the capacity to consume that product in your home, right? In your home theaters or on your phones now, and many of those old cathedrals of movie consumption really struggled with their business model, right? And many in fact are shuttered or have been repurposed into other kinds of buildings.

My mentor, Dr. Bill Eadington, the founding father of gambling studies often wondered whether there was a moment in the future where casino hotels faced a similar fate. Maybe they won’t be boarded up per se so much as, you know, if they don’t recognize the trend lines like any business, they could become Blockbuster’d.

Dr. Gary Deel: Absolutely. You mentioned Atari thumb, and it reminded me of an article I read recently where doctors are concerned about an unusual and unhealthy growth of the back of the skull now that is associated with people looking down at their phones.

Dr. Bo Bernhard: Oh, my gosh.

Dr. Gary Deel: Among adolescents, particularly, that spend hours on end. And apparently I mean, it’s legitimate, it’s not just a myth, that it really can happen if you spend most of your waking hours with your head pointed downward, you can have this sort of abnormality that causes spinal issues and stature, stance and whatnot.

But it’s amazing to me how adorably simple most casino games are and yet they continue to attract attention. I mean, card games, 52 cards in a deck, four suits, and they’re just quaintly basic and yet people will play them for hours and hours on end whereas as you mentioned earlier in terms of multimedia and the gaming that we have today.

I think of the video games that are available on the most modern platforms that these immersive world experiences and virtual reality, et cetera, and yet people will still flock to these games that were invented hundreds of years ago that you could play with sticks and rocks.

Dr. Bo Bernhard: Yeah, no, that’s funny. I think about that a lot because so once more I have this weird family history, my great-great-grandfather, who went by the name of Kid Jordan. He was a cowboy from Texas in Oklahoma.

Wherever the games were hot, he would go and he was a casino dealer and of course kept getting shut down by the sheriff because that was illegal and finally discovered, “Oh, there’s this place out West called Las Vegas that they let you do all that stuff; they’ll let you do all sorts of stuff that would be banned pretty much everywhere else.”

But that was stable for him, and we’ve been out here more or less ever since. But you could dig up Kid Jordan from the grave and he’s been dead longer than I’ve been alive.

And I’m an old guy at 47 years old, and he would walk into a casino and he would recognize today every single game in there.

I mean the slot machines look spectacularly different, but he’d say “Yeah, that’s kind of a cartoony version of those slot machines that we have.” And he would be able to deal craps, he would be able to deal blackjack and poker, and I think that’s not great from an innovation perspective, right?

I mean, what if you said that about Apple computer’s products, really you could dig up my great-great-grandfather who died 50 years ago and he’d be able to recognize all the Apple computing products as the same ones that he played on, that would not be good.

Dr. Gary Deel: Yeah.

Dr. Bo Bernhard: So I think this is a real innovation challenge. Once more, it’s not been one that’s always been eagerly embraced by the industry. I think the industry though has been blinded somewhat by its near monopolistic status for so long.

Once more in most places you’ll have a fairly limited supply, limited by government and say I’ll just have one casino in this area and as a result you do pretty well. You’re successful when you have a monopoly, right?

I always say you could sell spoiled milk at the local convenience store if you’re there only convenience store in the area, people are still going to buy spoiled milk. But the innovation challenge is very, very real and yes, as you point out, there are adverse consequences to excessive behavior and that’s fascinating, that point you bring up about the part of the back of the skull.

I find myself subconsciously feeling the back of my skull and wondering whether I’ve got this horrible affliction, but here’s what I would point out about the folks who are lamenting this, the grownups who lamented the Atari thumb in my generation, the folks who were worried about this now.

The downfall is never as linear as the alarmists predict, is it? It’s never quite as total or as linear or headed for our demise. There’s a great phrase in literature called declensionist narratives and what this refers to are narratives of decline.

And they’ve been around since the dawn of the human era, right? Every generation has said, “Oh my gosh, look what the younger generation is up to. We are doomed and we are headed in a linear fashion towards our demise.” And you look at the way in which what we now call the Greatest Generation, the World War II generation.

When you look at the headlines in the Life magazines when they were teenagers, it was, “Oh dear, head for the hills; they are sheep-like in their apathy, in their just mindlessly following others.” They’re never going to amount to anything and they became the Greatest Generation, right?

So I think there’s a tendency sometimes to neglect the fact that these things aren’t linear. What happens is kids start staring at their phones or start staring at their gambling screens, but there’s always a counter, right? Folks start yoga or meditation, sort of break up the phenomena’s more adverse consequences and that kind of ebb and flow is something I’m fascinated by it. My doctoral dissertation was actually on the peaks and valleys of gambling’s popularity over the years.

It’s not linear. There are periods of popularity and then backlash and prohibition and then periods of popularity and then backlash and prohibition, which happens with a lot of things in life, that kind of up and down ride rather than the sort of linear demise or declensionist narrative.

Dr. Gary Deel: It reminds me, the declensionist narrative, of the millennial rhetoric and I say that as a millennial kind of tongue in cheek and how that sense of hopelessness, but I think you’re right. I think there’s always a longing or nostalgia for what was once comfortable and as the new generation changes the music and the fashion, you become foreign to that or it becomes alien to you and there’s this sense of distrust and hostility.

But that I think also could be translated into the gaming world, and I wonder if that’s what is attributable to the lasting interest and support for the games, blackjack and poker and so on. It’s the “don’t change what I like.”

I think about Star Wars, the franchise, and how everybody loves the original trilogy to different degrees and then George Lucas went and did the prequels. And if you were 10 years old like me when they came out, you had no problem with them.

But if you remembered the original movies, the way that people who got to see them live in the theaters did, it was a miserable excuse for a Star Wars trilogy.

And then the new ones Disney did their best to try to retcon and to fix the mistakes, but I feel like in some ways they almost made it worse. And so everything that follows that is slightly different has been a perpetual disappointment, and now I wonder if that’s why the gaming industry has been so reluctant to make any major leaps. It’s just for fear of alienating the people who love card games.

Dr. Bo Bernhard: Yeah. I feel like Gary, you and I could probably do the whole rest of this podcast and another podcast on top of it with Star Wars’s life metaphors, but you’re absolutely right.

I’m a little, half-generation older than you and so I grew up with the original and you look back and there’s such nostalgia forum and the scripts are so poorly written, right? It’s like they get away with lines that in a million years you’d never get away with today when we really value the potency of the word. The eloquence of the spoken word has gotten so much better on screens in general, with the advent of a far more competitive screen-based entertainment landscape than it ever, ever was.

Once more, though, we’re not quite seeing the same thing in the gambling world and you’re right, maybe that is sort of a nostalgic place. One little stat or sort of set of data that supports that notion of yours, which is really a smart thing to say, is that the casino customer tends to be an older patron in general.

And I was interviewing a CEO of a major gaming company a few years back and he had been prior to his life as a gambling executive, an alcohol executive. And he said in many ways gambling is kind of like wine sales in that you just kind of have to wait for people to age into your product. And once they do, there’ll be a very strong customer, but you got to kind of wait for them.

And you know, gambling is an act that is largely stationary when you’re no longer as, you know, I’m no longer able to do when you got a bum knee like I do and you can’t go out there and rock climb as much as you might like.

Gambling becomes more attractive because it is again, a very enjoyable sedentary activity for older people who can no longer do other things. So your sense that again, a longing for a simpler past that you remember, sort of links in well with the demographics of the gambling act in America.

Dr. Gary Deel: It’s a familiarity that I think we can all relate to. I mean, at 34 myself, I already see the top 20 music changing from what I remembered it to be from.

Dr. Bo Bernhard: Pretty soon, you’re going to be screaming at kids to get off your lawn, Gary.

Dr. Gary Deel: That’s not music; that’s right. I wonder if there’s a hybrid though coming our way in terms of the technological automation because again, the overhead of employees in any respect is burdensome, and naturally corporations are yearning to shed that in any way that they can. At the same time, they don’t want to alienate that demographic, the older demographic, the people who are comfortable with what they know.

So I don’t think you’ll get all of those folks on board with a video digital smartphone or even home computer version of gaming, but I’m wondering if, you know…I’m imagining a blackjack table with a dealer that is essentially a robot of some kind. And I’m wondering if that’s the sort of hybrid future that we envision to eliminate that overhead and so many other challenges that I’ve talked about in articles and other podcasts.

I mean, dealers unions and the struggles that come with having to negotiate with employees in that respect. All of that kind of goes out the window if you can get to a technological situation where a dealer, a physical human being is no longer required to sit at the table with you, but you’ve got to get your customers to buy-in on that.

Dr. Bo Bernhard: Yeah. Again, this is yet another thing that I’m sure you and I Gary could talk for hours. It’s about gambling, but it links to a much broader societal trend and that is automation and robotics and the rise of the robots and the ways in which that threatens the human-based labor force and you’re seeing this in Las Vegas.

There are robot bartenders now and that was a huge, huge controversy when we first saw that a few years back, but it’s not like the casino industry can be immune to these broader societal trends. My understanding is that the single most popular, most common, that is, job amongst American males is truck driver.

Well, Mercedes-Benz has tested and tested the world’s first fully autonomous 18-wheeler. So that job, which is the most frequent job amongst American males could be gone and when you think about the hotel casino, I think what a lot of people don’t realize is that when they opened, for example, the Bellagio, they have to hire 10,000 people. 10,000, it’s a small city, right?

It used to be that the factory played that role in American towns whereby that was the one place you could hire a whole bunch of people and basically employ the whole town. Well, factories and manufacturing more generally have moved in large part to China in the global economy today and so you have to kind of look to post-industrial labor forces, not labor forces in the conventional sense, I mean like forces of providing labor, and on that list there are a few things that are as powerful or at least that hire as many people as a hotel casino these days.

But even that once more is threatened by automation and as you put it the robots that are dealing the blackjack table, or even eliminating the robot and having a situation where you’re just staring at a screen albeit in a casino with what is in essence electronic blackjack or poker game.

So you’re starting to see those kinds of things all over the place and the way that it links to COVID that’s interesting is it’s actually cleaner. Gosh, the second dirtiest thing on a casino floor are chips, right?

Poker rooms for years, hardcore poker players joke that they all have flus at the exact same time because they’re all passing chips back and forth. But the dirtiest thing on the casino floor is probably the dollar bill that you exchanged for that chip.

But both of these are very, very, I guess in the post-COVID world, potentially destructive forces of contamination and against that backdrop, suddenly, automation, computer screens look a little less threatening because they feel a little bit less contaminated. So that becomes, I think a very interesting dynamic as we think about automation of labor.

Dr. Gary Deel: It’s funny you brought up trucking. Two weeks ago, I recorded an episode with my colleague Dr. Larry Parker, who is the program director for Transportation, Logistics Management here at APU and we were talking directly about that point. In addition to Mercedes, Tesla, of course, has their semi, that is in progress.

And from a car perspective, I have a Model 3 as my daily commuter and I can attest to the fact that their autopilot software is pretty damn good. It’s not perfect; there’s still bugs in the system, but they’re close.

They’re as close as anything I’ve ever seen, so as you mentioned, transportation work is the most abundant career for anybody these days. I think it’s one in 10 people worldwide is employed either as trucking or commuter transportation or trains or ships or planes, and so there’s a lot of work there.

But to your point in gambling as well, I think it’s just a matter of time until that product is feasible technologically. And I think that I would wager a guess that they’re probably close if not there because I’ve seen what the card counting and card-sorting machines can do.

And it occurs to me having spent a lot of time on casino floors in Vegas as a security manager, just kind of watching, that dealers do very little more than just take the cards out of the machine and hand them out to the people at the table.

There’s not a lot of interaction as it is, and so at most I think your other obstacle is the challenge of consumer readiness for that change and I would say that you’re maybe a generation away. Because at this point folks like you and I, even in our age group, are very familiar, custom you know, completely comfortable with our iPhones and our tablets and our technology. So to integrate that into something like a gambling table doesn’t seem at all, it doesn’t seem intimidating in any way, shape or form.

And as I said earlier, if you don’t believe that you run the risk of being Blockbuster’d. So that’s super interesting that one in 10 jobs, a 10th of the economy is moving stuff, because again, to bring this to the Las Vegas based gambling world, one in $10, Yen, Pesos spent around the world pre-COVID, spent on tourism.

So it’s not moving stuff, it’s moving your own butt from one plot of earth on the earth to another plot of earth on the earth, typically for pleasure but also for business, the business and convention world as you know from working in a Las Vegas hotel casino is a big, big part of this. And one wonders where that’s headed post-COVID, right?

Are we going to be as rabid about hopping on planes and at the drop of a hat and having the great apps that let us know there’s this kind of a deal on the low-cost airline that can get you to Denver by 6 p.m. tonight?

I wonder where all of this is headed. I wonder what you think, Gary, just because again, the act of traveling is 10% of the global economy, again pre-COVID, where are we headed after this? Are we going to be as enthusiastic about up and moving our bodies to other parts of the planet as we were prior to that becoming a potentially deadly thing?

Dr. Gary Deel: Yeah, I think that’s an excellent question. And I think we’re seeing now what is possible in the absence of that physical relocation because we’re forced to engage with it in a digital way.

I have friends here in Orlando that are not in any way employed in tourism but are finding themselves working from home just for convenience or for social exposure sake. Software engineers and people who work in marketing firms and office jobs and now that it’s been six, eight months absent from the office, they’re seeing that they can be productive at home and perhaps their bosses and their organizations were not in favor or in support of that kind of a work environment previously. But now that they see that it works, I think that’s going to stick in a lot of ways.

Dr. Bo Bernhard: We’re in a fascinating moment, right? Where it’s a perfect experimental design, right? Because that’s what you do with experiments. You drop a stimulus into a group and you see what happens before and after and this is the ultimate stimulus, right?

I mean, we think of stimulus in the economic sense but stimulus in the experimental design sense means you inject something odd or different into the environment and see what was happening before and what happens after and as it pertains to our two towns, right? Orlando and Las Vegas, no two towns in America are more reliant on tourism.

You can see it going both ways, right? You can see it going in a direction where people have stopped traveling and maybe continue to at least slow down for a while. You can see a world where people have learned to enjoy other things and because of fear and because of learning to do those other things, they travel less.

You also can see a pent-up demand, meaning that the moment the vaccine hits for example, everybody goes to Disneyland. It’s like everybody just won the Super Bowl, right?

What are you doing? I’m going to Disneyland or I’m going to Vegas, and the infrastructure that of course both of these cities have is unparalleled and so they are very much ready to receive the inbound customer.

In the end, I know I sound like a wishy-washy academic when I say this, the answer to the question, “Will you see a decrease or an increase?” is probably both, right? There’s some of the population that is so eager that they’ll travel at the drop of a hat once they’re able to and just spend like crazy people, right?

And there are others for whom the fear will linger and the memories will linger, and they’ll be a little bit slower to respond. Both of those phenomenon[s] will happen and as a result, hopefully there’ll be some equilibrium or stasis whereby again, things return to some semblance of normal with both of those phenomenon pulling and pushing.

Dr. Gary Deel: Absolutely and I wonder what that future vision will look like and how far removed from our current reality it will be. and I often think about sports betting by analogy and I don’t know what the trend line is, you might have some data on the usage of sports betting rooms and casinos in Vegas over time.

But recently John Oliver on HBO had an episode, I don’t know if you saw it, it was on fantasy football and fantasy sports and the legal battles that have ensued over whether or not fantasy football is betting, sports betting. And of course there’s a big argument about no, it’s not, yes it is and so you have these FanDuel and the other one, I forget what the —

Dr. Bo Bernhard: DraftKings.

Dr. Gary Deel: DraftKings. Thank you, yes. And this is a very funny exposé on this topic. But it seems that more and more people are just becoming more and more comfortable with the idea of it. I don’t bet on sports. I hardly have time to watch sports myself, so it’s hard for me to relate to that topic.

But if I were, I could imagine myself saying, “Why in the world would I ever get up, get dressed, get in my car, drive to a casino and go sit in a room to place bets when I could just do this from my smartphone on my couch?”

Right. Sports betting is an interesting phenomenon because we’ve seen, thanks to some Supreme Court decisions, a liberalization of sports-betting legalization. So more and more places are allowing sports betting than ever before, but it’s an activity that was always happening.

I went to college in Boston at a time where there was a Boston College football betting scandal and they were laying bets at a bar that I frequented a fair amount. Everybody knew that was where the action was and in the ultimate statement of laziness, one of my best, best buddies in Las Vegas that I grew up with, where sports books are ubiquitous, right?

Every place on the Strip and beyond, and all the locals casinos has one. But he had a bookie, an illegal bookie because he could call from his La-Z-Boy and place the bets over the phone, right?

Even in a place where sports betting was ubiquitous, he preferred that kind of convenience and capacity to bet over your phone. Now of course, the legal sports books typically have a mobile option whereby you can do things on your phone.

In Europe, it’s really, really intense whereby at a football match, a soccer match you’ll have in-game betting whereby you’re constantly betting on who will have the next throw and who will have the next corner kick, who will have the most touches in the next 20 minutes.

I mean, you name it and it’s an ongoing in-game phenomenon. The days of it just being all right, I get this many points on, I bet on the Broncos are gone, or at least the world’s gotten a lot more complicated.

Dr. Gary Deel: I will have to send you the link to the John Oliver episode because it was funny, it was touching upon how most people naturally lose money hence this would not be a great business model in the first place —

Dr. Bo Bernhard: That’s right.

Dr. Gary Deel: On their betting, but there was one individual in particular that they made a joke out of it, he made like $700,000 on sports betting and through I think DraftKings and everybody’s saying, “Well, this shows you how it’s possible.”

I should keep doing this because I can win it too and then they cut to him and he says, “I have a master’s degree in statistics and I’ve created an algorithm that calculates that’s based on weather patterns and geographical elevations and calculates hit percentages in baseball to the 19th decimal point or something.”

Dr. Bo Bernhard: Yeah. That’s a little less sexy than your grandpa having a feel that the seventh horse in the fourth race would come through for them.

Dr. Gary Deel: Right. There’s a lot more to it than that. Well, wonderful. We’re running down to the end of our time here, but is there anything else happening in the world of gaming that our audience should be aware of? Any trends that we should keep our eye on?

Dr. Bo Bernhard: As gaming goes, so does society, right? Really in many ways is no better or no worse than just about any other activity. You’d mentioned retail and the way in which that’s moved online, gambling is moving online.

We talked about tourism and the way in which human beings increasingly have wanted to up and move to other parts of the planet and see those parts. And gambling has found a way to access that, obviously, on the Las Vegas strip.

And so, yeah, when I teach courses on the sociology of gambling, I think you can use gambling as a lens for society and vice versa and it just becomes a really interesting episode. It’s an activity that’s been around since the dawn of time, and yet it’s something that changes fairly dramatically, depending on as you pointed out earlier the culture or the society in which it takes place.

Dr. Gary Deel: Absolutely. Well, hopefully for the sake of the economic benefit that comes from gambling and from the activity that so many people enjoy to the extent that it’s healthy and can be enjoyed that way, we certainly hope that it survives the pandemic and continues to thrive in the years ahead.

Well Bo, I want to thank you for sharing your expertise and your perspectives on these topics and thank you for joining me today for this episode of Intellectible.

Dr. Bo Bernhard: Thanks so much. Appreciate it. It was fun reconnecting, Gary.

Dr. Gary Deel: Absolutely. And thank you to our listeners for joining us. You can learn more about these topics and more by visiting the various APUS-sponsored blogs. Be well and stay safe everyone.

About the Speakers

Gary Deel

Dr. Gary Deel is a Faculty Director with the School of Business at American Public University. He holds a J.D. in Law and a Ph.D. in Hospitality/Business Management. Gary teaches human resources and employment law classes for American Public University, the University of Central Florida, Colorado State University and others.

Bo Bernhard

A 5th generation Nevadan, Dr. Bo Bernhard calls Las Vegas home, but he works frequently in jurisdictions all around the world as well as dozens of states across the country.  Dr. Bernhard began his academic career at Harvard University, where he wrote a magna cum laude thesis on the socio-economic impacts of the global gaming industry. By the age of 30, had presented this research on six continents.

After earning his Ph.D. in 2002, Dr. Bernhard was named the inaugural Research Director at the UNLV International Gaming Institute. In 2013, he was named Executive Director at the IGI, where he now oversees a team of 38 thought leaders who tackle the global gaming industry’s most vexing problems.

Representing the university and the IGI, Dr. Bernhard has delivered over 250 keynote addresses in clinical, regulatory, government, and policy settings.

In 2016, he was given the Harry Reid Silver State Research Award, making him the only individual in the history of UNLV to win its top research and teaching awards. Since 2016, he has held the Philip G. Satre Chair, the most prestigious chair in the academic field of gambling studies, at both UNLV and UNR.

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