Frank Fahrenkopf is a pioneer in the American gambling industry. Throughout the course of his life he’s rubbed shoulders with the likes of Wayne Newton, Bill Clinton, Ronald Reagan, Barron Hilton, Bill Harrah, Bill Boyd, Sheldon Adelson, Gary Loveman and the list goes on. The organization he led helped change the public perception of gambling in the United States and over the past few years he’s served as an ambassador for the federal regulation of online poker in the US. After eighteen years of leading the American Gaming Association (AGA), Fahrenkopf has handed the reins to Geoff Freeman who was crowned President & CEO on July 1, 2013. Checkout the Part 2 of this interview here.
Fahrenkopf is one of the only people who I schedule an interview with any time we are in the same place at the same time. The recent iGaming SUPER Show was his last appearance in the online gambling world as the acting President and CEO of AGA and I had the opportunity to talk with him about his time at the AGA and the evolution of the gambling industry.
The early days at AGA were not smooth sailing for Fahrenkopf and he had to navigate through some unexpected challenges. “One month after I opened the office of the AGA the movie ‘Casino’ came out in the United States which took all the old stereotypes about the gaming industry and we had a difficult time from a public relations standpoint”, he said.
Despite the bumps along the road, Fahrenkopf is most proud of the AGA’s ultimate success in changing the public perception of the gambling industry as a whole and also changing the perception of elected officials. The AGA set out to educate the masses and show that gambling was a mainstream industry that generated jobs and revenue for the communities hosting land based casinos.
Reflecting back on his time growing up in Reno, Fahrenkopf shared that Wayne Newton (who Fahrenkopf later represented for many years as his personal attorney) used to play at the Riverside Hotel, illustrating that entertainment and gambling have always gone hand in hand to a certain degree. The real shift to entertainment and gambling as a combination happened a bit later down the line.
“The real dramatic change I think took place with Steve Wynn,” said Fahrenkopf. He pointed out that it all started with the Mirage- the way the hotel was designed, Siegfried and Roy, the golf course, the Michelan Star restaurants and clubs- there has been an evolution since then.
Since the building of the Mirage and the many other ‘resort’ casinos that followed, the results supported that visitors to Las Vegas want more than just gambling. “Clearly what we’ve learned is that people go to at least US Casinos not just to gamble, in fact 26-27% say they very rarely gamble, but they do go for the fine meals, the golf courses, retail shopping, etc”, said Fahrenkopf.
With so many magnificent hotels, restaurants, clubs, shows and more to choose from in Vegas there’s no problem attracting more and more visitors, however the numbers show that the revenues are not improving.
“Vegas is breaking all records with people coming- McCarran Airport has had more people coming last year than ever before, but they are all on tight budgets and not spending the way they used to spend. So until the economic situation get better and people get back to work, I think its going to be a very flat market”, Farhenkopf said.
On the brighter side, the development of new technology has been exciting for Fahrenkopf to watch over his eighteen years, particularly with slots manufacturers. In the United States, 60-65% of gambling revenues come from slots, so its essential to keep on top of the latest. “I think the slot machine industry has evolved and changed very, very successfully”, he said.
Over in Asia, it’s a different challenge however- only 5% of gambling revenues in Macau come from slots. “Asians don’t like solitary games. The slot machine fundamentally is a solitary game. You’re playing alone. They like group games. They like table games. So the challenge to the slot machine industry today is to come up with electronic games where more than one person can play at one time and they are making some great progress there”, Fahrenkopf explained.
We’re now living in a digital age so the gambling industry as a whole has had to evolve. The rise of online gambling in the United States and beyond over the past ten years has been in response to the consumer demand for more digital entertainment.
“I don’t know what its like here in Europe with the newspaper industry but its tough sledding here in the States”, said Fahrenkopf. “So that’s why iGaming has become some important and is now on the front burner in the United States”.