If there is one thing we know, it’s that Millennials love skill based gaming and they love going to casinos to get their fix. It’s why poker has never been more popular. After all, there have only been 13 poker room closures in Las Vegas over the past 4 years. The same can be said about sports betting, another popular form of skill based wagering and behemoth profit drivers for casinos nationwide, accounting for, on average, about 1.5% of individual casino revenue. I can’t think of any other game day betting alternative with no season long commitments in which you can turn a game you love into a lifetime of cash by using promo code “Millennials Rock” for a 100% first deposit bonus up to $600. The proof is clearly in the numbers.
Surely though, poker and sportsbetting aren’t the only skill based games. Some of us feel video poker and even craps fall under the “skill based” category, as players have more control over the outcome. Well, with the passage of Senate Bill 9, future slot machines may soon feature a skill based component. According to the Association of Gaming Equipment Manufacturers, or AGEM, the passage of SB9 “allows for variable-payback percentages in slot machines to enhance the player experience by bringing true skill-based gaming, arcade-game elements, hybrid games and other unique features and technologies to the casino floor for the first time.” This sounds exciting. Rumor has it the bonus round in the Buffalo Slot machine will allow players to control a stampede running through striking Fremont Street buskers. Bonus 10x points for every diaper wearing adult you mow down.
AGEM goes on to explain how the payback would work:
Variable-payback percentages would, for example, give all players a base game with an 88 percent payback, but if you’re particularly skilled at shooting down enemy planes in the bonus round or outracing your friends in a road rally, you could boost your payback to 98 percent, with the blended overall payback selected by operators falling somewhere in the middle. For the first time, players will know they can have a material financial impact on the outcome of the game.
I can tell you, nothing gets Millennials more excited about gaming than material financial impacts. What’s great about this is that no longer will Millennials have to go through the cumbersome maneuver of reaching into their pocket to play their favorite game. Why bother, when you’re favorite digital adventure is just a short plane ride and negligible resort fee away?
Listener Taylor, a person with actual business sense questions Casinos’ thought process as well. On the FHBM Facebook group, he said, “…they’re confusing skilled based games vs slot machines with free games on phones/consoles vs slot machines that cost actual money. Why would millenials put a hundred dollar bill into slot machines that last 10 minutes 80% of the time to win some money 20% of the time when they can have Xbox Live subscription and gamefly subscriptions for $100 a year?”
Taylor hits on two important things to consider here, which are price and convenience. We all know the value of slot machines have been declining lately. That is, people are playing them less due to paybacks being tighter. According to the Las Vegas Review Journal, “slot machine hold percentages have increased a combined 14.5 percent across the nation over the last 10 years while the revenue from the games has grown just 1.1 percent.” Not only does this suggest that slots are no longer relevant entertainment for people looking to make their money last, but the casinos don’t just have a “Millennial problem”. Their existing customers, the ones who have actually enjoyed casino gambling in the past, just don’t see it the efficacy of it anymore.
Now, couple this with how inconvenient it is to head to the casino to play these skill based games. Frequently called the video game generation, many of us already own consoles, including phones which allow us to get our fix. They’re small, convenient, and relatively inexpensive. It’s why arcades are no longer popular. That, and partially because casinos like Excalibur refer to them as the “Fun Dungeon”, which sounds less like an electronic gaming establishment, and more like a Law and Order: SVU crime scene location. Only if I could cite a recent example of an arcade or skill based gaming establishment that recently went under to solidify my point. Say, a location in Vegas, maybe even Downtown where gambling revenue has been increasing. A place where, I don’t know, you could insert coins and enjoy your favorite drink. Alas, there may be no such example.
One thing Millennials do enjoy, is drinking. Part of the reason is because it’s how we cope with C-Suite executives constantly badgering us about “how to market to Millennials”. A relevant argument for gambling fans is that, in Vegas at least, drinks are “free” when playing any of the various games. Again though, Millennials are, by and large, concerned about value. We’re not exactly depression era children, but many of us struggled to find gainful employment after graduation. I know casino execs may be confused by this notion, as they frequently see rich twenty somethings tossing around large sums of cash at their ostentatious night clubs. But, they don’t represent the majority of us. Many of us would rather pay $20 for a great cocktail, than spend anywhere from that amount to 10x that buy-in on a slot machine, just hoping the stressed out cocktail waitress notices us and brings us a Bud Light or a well rum with Shasta, generic cola. It’s a waste of time. It’s a waste of money.
What casino operators don’t seem to understand is that Millennials just don’t like going to casinos. And, they would know this, if they ever talked to a Millennial. But they can’t, because Millennials don’t go to casinos. Mark Frissora, newly minted CEO of Caesars Entertainment, seems to have found a solution to this Millennial vacancy problem. Vegas Inc. reported that “Frissora said Caesars is developing a gaming space on the Strip with walls that can be adjusted. He was light on specifics, but described it as a “casino within a casino””.
No surprise here, as it was Frissora’s “car within a car” initiative that catapulted him up the Hertz corporate ladder. If you’re unfamiliar, for customers who reserved a midsize or larger vehicle, their additional passengers relaxed comfortably in their own Kia Rios in the backseat.
Yes, Frissora’s plan to lure more gambling reluctant Millennials into his casinos, is to build more casinos within those casinos. Perhaps these will be “ironic” casinos meant to attract the hipster crowd. You know, those of us who were into casinos before casinos became cool again. It’s no wonder why Frissora was light on specifics. I’m sure Caesar’s shareholders wished he was even lighter with word choices at this speaking engagement.
He continued on at the G2E roundtable discussion by telling reporters that “a large opportunity remains to further connect social and mobile technology to casino games.” He’s right, the first thing I like to do when I inexplicably lose all my money at a casino is tell my friends and family about it online. Nothing warms my wife’s heart quite as much as learning that her husband lost $100 on a 30 year old electro-mechanical horse racing game.
What will likely happen with this push towards Millennials and skill based gaming, is that casinos will ostracize their current customers. There is, despite the general decline in gaming revenue, still a large body of people who enjoy gambling. Skill based gaming may be intriguing to them as well, but I would be very careful about trying to please the customers you want, instead of the customers you have. The former is more expensive.
Gambling is in decline and will continue to be so in the foreseeable future. Now’s the time to expand your food and beverage offerings. Establish more differentiation in your bar and entertainment options. And, most importantly, offer something of value. Note, that doesn’t necessarily mean cheap or inexpensive. We’ll pay a good price for a good time, but we don’t like to feel like we’re being had. The fact of the matter is, Millennials don’t like to gamble. It doesn’t matter how fancy the slot machines get, it’s not likely to change. But, what do I know? I’m just a Millennial.