“There is a middle ground that casinos and the esports industry have to move to, and that regulators have to keep up with”

“There is a middle ground that casinos and the esports industry have to move to, and that regulators have to keep up with”

The Casino Esport Conference (CEC) and the newly founded Esports Innovation Center (EIC) of New Jersey’s Stockton University have found common ground in their approach and work to bridge the worlds of traditional casinos and esports. They have recently joined efforts to launch the inaugural CEC/EIC Northeast Summit, to be held in Atlantic City on October 18-19, 2022.

The New Jersey State-funded EIC is led by Executive Director Andrew Weilgus —also President and Founder of Atlantic City Football Club. The center is a 501(c)(3) nonprofit that was created in 2021 by the state of New Jersey in partnership with Stockton University, and its focus is three-fold, Weilgus tells Yogonet in a video interview. First, it is focused on workforce development within the higher education system in New Jersey, to create an ecosystem and environment where its students, esports fans, get matched with the proper skill set eventually leading to high-paying tech jobs. With that aim, it builds programs that are esports-specific and harness computer science, hospitality and tourism, and school of business.

A second focus approach is to leverage the differential features of Atlantic City and its nine operating casinos, and help forge a strategy for these casinos to take advantage of the esports industry. “So from an event and tourism standpoint, we want to make Atlantic City a stop on the esports map. And to do that, we need to build the infrastructure out properly on all fronts,” he explains to Yogonet.That is working in partnership with the casinos, with the university, with the Casino Reinvestment Development Authority (CRDA), with Continent 8, who has high speed servers that are positioned in Atlantic City that could help with this infrastructure build.”

And as a third priority, Weilgus notes the EIC intends to be a community resource not only for the higher education institutions, but also for K-12 levels and up, and groups that are looking to build an esports program and need knowledge and resources as to how to do that.

And we also want to be a business-to-business hub for the esports industry to engage with the state of New Jersey and these various stakeholders. And that’s what really leads us to the CEC event. So the Casino Esport Conference is something that really does bring in business-to-business focus on how the casino industry can better take advantage of this new growing and immersive experience, which appeals to younger gamers. And younger gamers are a huge demographic shift from who is currently in the casino,” he says. “I believe the statistics are 80% of casino revenue on site is generated through slot machines, and 80% of slot players are over 65 years old. So what we’re looking to do is to be a bridge to explain different technologies that are monetizing esports in a casino environment.”

But the EIC leader says this new project is not the typical attempt of bringing younger people into the casino so that they don’t gamble there and leave: “We’re trying to create technologies and work with the regulators that are involved in that, to put esports in a casino environment and give users a chance to compete in a way that would never be accessible to them in their home environment, at their house, even online, even competing against somebody. And that means much larger, more sophisticated setups, bigger tournaments, structured prizes.”

And Weilgus provides a specific example of how this could work for both parties through a tested monetization approach, leveraging the poker model, where the casino wins no matter what because it is facilitating the contest: “So I may play you Mario Kart, and whoever finishes higher wins $9. I bet $5 and you bet $5. And if I win, I get $9, the casino gets $1. That’s a time tested model. So being able to regulate and introduce those types of technologies into a casino environment is something we’re hoping to facilitate.”

The EIC even seeks to take this approach beyond technological innovations in this sense, and train young computer science students to learn how to develop coding and development skills by giving them access to the required technology and coursework for that. So where a game studio spends millions of dollars on a slot title, a student could join a program at a state university and gain the skills necessary to contribute to that team behind that development. “So we want to stress that we’re not interested in training the next generation of esports players to be great players at their particular esport. But we’re interested in training the next generation of coders, modders, marketing executives, all the different people that are associated with those esports, because that is a very, very large market and ecosystem compared to the very slim market of professional gaming,” Weilgus explains. “If there are synergies where that’s your target market and you’re developing product directly for them, we’re going to help make that happen. And we’re going to be a testing ground and a place for those companies to come in, introduce that technology in a safe space, and then get it regulated and get it advanced into the casino market.”

Ultimately, the EIC seeks to be a featured space for technology, and Weilgus cites the “good example” of the Blackfire Innovation Center at UNLV in Nevada, as a separate entity creating innovation technologies and iGaming, putting technologies on display and giving a venue for those companies to come together and discuss and to promote new technology. “So we very much will have that type of thing on display in EIC, but we also plan on building some hands-on setups that will allow students from around the state to come in and get real hands-on experience. We plan on having a full broadcast studio in 4K, so for example, if a company came in and was running a tournament in Atlantic City and wanted to bring announcers and do pregame, post-game, interviews, etc., we’ll have the capabilities to host that type of thing.” 

Weilgus also anticipates the EIC will have a mini arena, which will allow for a 6v6 setup and intimate high-definition cameras everywhere. “So you’ll be able to see some of the latest and greatest on display, whether it’s AR technology, VR technology, what’s coming next. And then it very much will be a functional event center. We plan on having a lot of educational events, business-to-business events, just ways to bring people from the esports community into the space, show stuff off and then bring our members into the space, to show stuff off as well. And once you have that active base of casino executives who are in the area, steps away from the center, who can come down for a conference, take a look at what you have, if you’re a company that wants that attention, this is where you want to be.”

Over the past few months, Esports Entertainment Group (EEG) held the first skill-based wagering event in the U.S. in partnership with Hard Rock Atlantic City, and the same company also became the first licensed esports gambling operator in the U.S., through a New Jersey license. When asked about what’s still missing in the equation to finally bridge both business worlds and make it work for both ends, Weilgus doesn’t hesitate: “There is no infrastructure in place in the casino market right now to facilitate what we are discussing. There is not a setup where I can go and choose any game from a screen and play you head to head for 10 bucks and feed money in. And I play you and you play me and the casino wins no matter what.”

And the EIC Executive Director brings up a crucial issue behind the current distance between casinos and esports: “People in the esports industry have to understand the casino industry, and people in the casino industry have to understand who the esports target market is. And right now they don’t. People in the esports industry say to the casino executives, ‘Just give us space and we’ll move your old stuff out and we’ll put my stuff in.’ And then they look at what that does to the revenue of that casino. Every one of those slot machines is making them X number of dollars an hour, and you’ve just proposed to them that they take that out so that they could put in something that might make 1/40 of that money. They will not do that. They will lose their job if they do that. And esports people are like, ‘Oh well you’re not advancing in the future.’ No, that’s not the right attitude. What you have to do is say, okay, how can we take non-premium casino space, space that’s spread out on the floor that’s not directly in the path or that competes with these slot machines or poker tables, how can we establish non-premium esports space that will monetize and will show them the way forward? As I mentioned, this poker model is one way that I think is very positive, where people can get an incredible experience not available to them at home, competition that’s only available to them at the casino itself. So you’re playing in closed network land, there’s no latency issues, you’re not dealing with crappy Internet, all of those different functions, and make that worthwhile. And I think there is a middle ground that the casinos have to move to, and that the esports industry has to move to, and that regulators have to keep up with.”

“It’s great for a technology to come to market, but if it spends a year and it costs $1,000,000 to get regulated, that’s a major barrier. So Esports Entertainment Group has been the guinea pig and spent a lot of money to try to become the first to do something in a state where there’s really no market for it yet. So they will hopefully be rewarded by being first to market. But I think it’s up to all parties involved to recognize that this is not about ‘Oh, we can just say we’re going to be a great esports environment,’ and be that. There’s a lot of infrastructure build and a lot of thoughtful planning that needs to happen in terms of how casinos will interact with esports, and how esports groups can interact with casinos. And I think, on the casino side, they need to understand their market. They need to understand the fierce loyalty of the esports player, the fact that that person does not care about your traditional gambling channels, and if you want to win them over into sports betting or other verticals, you have to know who that audience is, and you have to know how to speak to that audience and give them what they’re looking for.”

And one path in that sense proposed by Weilgus is experience-based gaming. As people go to casinos knowing there’s a good chance they’re not going to win, they would want to be entertained. And that could take the form of FIFA, Madden, League of Legends, or any other esports vertical. “So when you give that person an experience at the casino, even if they lose, that they can’t get anywhere else, you’ve got something. They will come back and they will want that again. So that combined with esports events, and those things all fall into place together, you want to attract nice tournaments and events that come into the space. But a permanent infrastructure in place is really the way that I think they will come together.”

Regarding the October summit, Weilgus anticipates the CEC/EIC plans on having a lot of people from the casino and state that are focused on building this esports ecosystem: “So we expect to have speakers from the New Jersey Economic Development Authority, who have really championed the center and what we’re building here. We expect to have folks from Stockton University, and the Atlantic City casino hierarchy. Tropicana, Caesars and Harrah’s are all owned by Caesars Entertainment, so that’s three of the nine casinos. Bally’s is getting very interested. And then you also have hotels that are not casinos that are really making inroads, like Showboat, which has opened up the Lucky Snake Arcade, the largest arcade on the East Coast.”

Watch the full video interview with Andrew Weilgus on our YouTube channel.