Accel Entertainment, one of the most important gaming terminal businesses in the country, has set its sights beyond the borders of Illinois. Accel is looking to explore new opportunities in the huge landscape of the United States’ gambling markets.
This strategic move highlights the gambling company’s ambition to broaden its horizons and capitalize on emerging trends in the gaming industry. Over the span of a decade, Accel Entertainment, founded and led in Illinois, has transformed from a humble startup into the foremost video gambling operator nationwide.
Notably, in 2020, it achieved the distinction of being the country’s first publicly traded video gambling operator. Strengthened by investor support, Accel is now poised to extend its reach beyond Illinois, targeting other financially challenged states seeking fresh revenue streams through video gambling.
Back in 2009, when Illinois approved video gambling outside of casinos, Andrew Rubenstein’s startup seemed like an underdog. With no prior experience in the gambling sector and no evident connections to the pre-legalization providers of “gray” machines – the simulated video slots and poker devices prevalent in bars and restaurants – Accent’s rise was unforeseen by many.
Andrew Rubenstein launched Accel in July 2009, just shy of two weeks before then-Governor Pat Quinn signed the Video Gaming Act into law. To kickstart the venture, his mother, Susan Rubenstein, an entrepreneur and philanthropist, invested roughly $1.2 million, as per Accel’s licensing application. Andrew contributed $255,000, his younger brother Gordon pitched in $205,000, and his younger sister Emily added $25,000.
With an additional $7 million raised, mainly from friends and business contacts, Accel positioned itself as a compliant, regulation-friendly option compared to the previously gray market operators. By emphasizing integrity and strong ethics, as well as a capable management team, Accel easily distinguished itself in the market.
Once funding was secured, Accel swiftly acquired over a dozen amusement companies statewide. By 2010, just over a year after its inception, and still two years before the state’s first video gambling machine went live, Andrew exuded confidence in Accel’s trajectory.
But why would a company thriving in one state seek expansion elsewhere?
What we cover
Diversification amid regulatory changes
One of the main motivations behind Accel Entertainment’s expansion is to diversify its revenue streams amidst regulatory changes. While Illinois has been a lucrative market for the company, with its network of gaming terminals dotting establishments across the state, the regulatory landscape is subject to shifts that could impact the business.
By venturing into other states, Accel can lessen the risk associated with overreliance on a single market and ensure sustainable growth even in the face of regulatory uncertainties.
Tapping into growing markets
The expansion into other states presents Accel with the opportunity to tap into new and growing markets where the demand for gaming entertainment is on the rise. The country boasts a wide array of gaming landscapes, from established casino hubs like New Jersey to emerging markets hungry for gaming experiences such as New York and Pennsylvania.
By strategically targeting regions with favorable demographics and regulatory frameworks, Accel can establish a strong foothold and capture market share in these burgeoning markets.
Building brand recognition nationwide
Expanding beyond Illinois allows Accel Entertainment to enhance its brand recognition on a national scale. While the company has established a strong presence in its home state, expanding into new territories presents an opportunity to introduce the Accel brand to a broader audience.
Through targeted marketing initiatives and strategic partnerships, Accel can position itself as a trusted provider of gaming solutions, thereby strengthening its brand equity and paving the way for future growth opportunities.
Unlocking Value for Stakeholders
Ultimately, Accel Entertainment’s expansion beyond Illinois is expected to unlock a lot of value for its stakeholders, including shareholders, employees, and customers alike. By leveraging its expertise, resources, and industry insights, the company can embark on a journey of growth and expansion that promises to deliver long-term value and sustainable returns.
Which states is Accel considering?
Accel Entertainment has several strategic options for expansion into new states across the United States. Here are some potential targets and the reasons why Accel might consider moving into these markets:
New Jersey
New Jersey boasts one of the most profitable and diverse gambling markets in the United States, with a strong presence of casinos, racetracks, sports betting, and online gambling platforms. The state’s established gambling infrastructure and regulatory framework create opportunities for Accel to introduce its gaming solutions and establish partnerships with local businesses.
Pennsylvania
Pennsylvania is one of the largest gambling markets in the United States, with a diverse range of gaming options including casinos, racetracks, and now, online gambling. The state’s recent legalization of video gaming terminals (VGTs) in truck stops presents a significant opportunity for Accel to expand its footprint. With its experience in operating gaming terminals and strong partnerships with local businesses, Accel could quickly establish itself as a leading VGT operator in Pennsylvania.
Ohio
Ohio is another promising market for Accel due to its growing gaming industry and favorable regulatory environment. The state has legalized video lottery terminals (VLTs) at racetracks and casinos, and there is potential for expansion into other venues such as bars and restaurants. By leveraging its expertise in providing turnkey gaming solutions, Accel could capitalize on the demand for VLTs in Ohio and establish a strong presence in the state.
Michigan
Michigan offers another attractive opportunity for Accel, especially following the legalization of online gambling and sports betting. With its established network of venue partners and comprehensive gaming solutions, Accel could enter the Michigan market by offering VGTs and other gaming devices to bars, restaurants, and other non-casino establishments. Additionally, Accel could explore partnerships with online gambling operators to expand its reach in the digital gaming space.
Final Thoughts
Over the span of a decade, Accel Entertainment, founded and led in Illinois, has transformed from a humble startup into the foremost video gambling operator nationwide. Notably, it achieved the distinction of being the country’s first publicly traded video gambling operator.
Accel Entertainment’s decision to expand beyond Illinois reflects its ambition to seize new opportunities, mitigate risks, and unlock value for its stakeholders. By diversifying its revenue streams, tapping into growing markets, building brand recognition, diversifying product offerings, and unlocking value for stakeholders, Accel is poised to thrive in the dynamic landscape of the U.S. gambling industry.
