Dispersion is the action or process of distributing things or people over a wide area. The digital transformation of all things has made dispersion an inevitable fact of life. Prior to the pandemic, we had dispersed socializing with friends onto platforms like Instagram, Snapchat and TikTok. Why get together at a bar when we can get together on our phones? We had dispersed entertainment to platforms like Netflix and Hulu. Why get together at the movie theater when we can get together on our couches in the comfort of our own homes? We had dispersed shopping to platforms like Amazon and eBay. Why get together in stores and at the mall when we can shop anywhere?
What was coming in the next five years was suddenly accelerated by the pandemic.
The necessity to disperse much more important things would arrive nearly overnight. Instead of simply sharing funny filters and fad dance moves, we suddenly needed platforms to have team meetings. Instead of accumulating dozens of smiling boxes filled with products to aid our hobbies, we needed those boxes to be filled with groceries and other essential items. Our FaceTime apps weren’t just to keep in touch with our loved ones, but would serve as an important medical connection, allowing us to access healthcare in a new way through telemedicine. Education was dispersed across the board to distance learning formats – not just for kids, but for professionals as well. Grade school math problems became some of the most heavily Googled searches while parents struggled to play the role of teachers. Even executive education and conferences are now held online.
Think about the industries that have been disrupted because of this dispersion.
Office real estate will never fully recover. Spending precious capital on posh office space seems like it surely should be a thing of the past, and investments should be made to help team members build home offices or receive allowances for co-working space. Industrial real estate should see a rise as online grocery and other shopping rises, and the need for warehousing and last-mile delivery becomes more important to consumers. Healthcare will change with the adoption of telemedicine. The eight minutes that we spend with the doctor can be done over technology. Not having to endure an hour of wasted time spent in waiting rooms, filling out paperwork and traveling to an office seems like a trade-up.
Education is one of the most expensive and risky investments that we make in our lifetime. The same education is being taught today that was taught 20 years ago, yet it’s harder to get into the best schools, more expensive, and less likely to result in increased compensation. I can’t see how this is sustainable, but what I can see is that same education (or better) delivered online, allowing the best schools in the country to break outside of their walls, accept many more people into their programs, and have a greater impact on our country and economy. The pandemic has provided the perfect platform to test this, and we’ll see more high-quality education happen in an online format.
Hospitality will change.
If the value of Airbnb post-IPO says anything about where the hospitality industry is going, it is obvious that the traditional places we stay and how we procure them will change. Meetings that would require travel and meeting rooms cannot possibly rebound back to pre-pandemic levels when we know how effective we can be in Zoom rooms.
So, with all this disruption triggered by digital transformation, caused by dispersion – and accelerated by the pandemic – what makes Indian Gaming so different? Why will we be untouched by this phenomenon? If you’re thinking, “there’s no possible way that we can go untouched” – trust your gut. We already know how powerful the digital transformation can be.
In my market, something as mundane as electronic pull-tabs serves as a prime example. While the market for the St. Paul region for Indian Gaming, as reported by the NIGC regional gaming reports published in December 2020, grew at just 2.6 percent, electronic pull-tabs over the same period measured growth at 17 percent. The legalization of sports betting is another example of how dispersed platforms can change how gaming can grow in markets throughout the country. Mobile formats have been successful and are seeing great growth. Commercial gaming has responded by aiming billions of dollars in capital at acquiring sports betting platforms or parts of the ecosystem. It may seem desperate, given the low margin business of sports betting, or it can be looked at as skating to where the puck will be. I subscribe to the latter. These bets are being made to accumulate any available digital and dispersed vehicle they can, a chance to get early money in on digital and dispersed forms of gaming. We saw an onslaught of this in the fantasy sports wave a few years ago. Today we see it in sports betting. Tomorrow we’ll see it in all other gaming.
Much can be learned from other brick-and-mortar entertainment businesses that have been disrupted by dispersion.
The best I can do for this article is think about one of my favorite brick-and-mortar experiences, going to the movies. I love the movies, and I see a hundred a year in the movie theater if I can. Think about what they’ve done in the last decade as they’ve faced an onslaught of disrupters. They acted in dramatic ways to increase the perceived value of the brick-and-mortar experience. Tight, cramped seating became lavish, leather recliners. Sodas and juices boxes changed to cocktails and beer. Popcorn and candy changed to gourmet food and full-on dinner. The screens got bigger and better. Film changed to digital format for better sound and picture. All these moves increased perceived value, which then allowed for increased pricing.
Our industry must do the same. Investment in our slot floor must increase. Obsolete hardware and boring software on our floors must be replaced with new machines and proven game themes. Our bars, eateries, and hotel product must reflect an increased value proposition. Pushing down cost and operating efficiently is simply table stakes. Raising the bar on perceived value will help protect profitability in the near-term. In the long-term, we must collectively shape our thinking on how we enter and compete in the inevitably dispersed version of our wonderful industry.