Ask those involved with the gaming business to find a solution to entice millennials to spend more time and money in a casino and the answer is quite simple — give them an overall casino experience that is more intriguing than today’s slot-machine games.
On most casino floors in Las Vegas, Atlantic City or Biloxi, Mississippi, patrons will find traditional slot machines with names such as AMC Walking Dead slot game, Lucky Hot 7s, Blaze of Glory, Wheel of Fortune, Willy Wonka Dream Factory or Sex in the City.
But those games, although popular with baby boomers and Generation X, are not proving to be as popular with a generation between the ages of 21-35 that grew up playing video games on Nintendo, PlayStation or Xbox.
“Their parents did not grow up playing video games and attached to technology since birth like a prosthetic limb,” said Seth Schorr, chairman of the Downtown Grand casino in Las Vegas.
“My child has been playing IOS games since he was an infant; when he turns 21, I don’t believe he will be inclined to wager money on a game he has no control over the outcome, but a game where his life-long skills give him an edge will be far more intriguing.”
Schorr admitted that many of his associates who run casinos in Las Vegas that are “far more successful, smarter and wiser ... do not share this belief.”
“But I still think it is a bit naive to think people’s behaviors aren’t changing permanently,” Schorr said.
Those changing behaviors were analyzed in a study last year by the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University in Atlantic City, which found millennials gamble at significantly lower rates than other generations.
According to the survey, 8.5 percent of a millennial’s total budget for a trip to Las Vegas is spent on gambling compared with 23.5 percent by non-millennials.
“Casino gambling has not historically appealed much to those under 40 or even 50 for a variety of reasons, so it is not totally surprising that this cohort is not gambling heavily,” said David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas (UNLV).
As the study found, millennials clearly felt that drinking activities, including bars, lounges, nightclubs and happy hours, were more important than did their non-millennial counterparts.
But will these preferences change as millennials get older, and will they begin to gamble in casinos more like their parents and grandparents did?
“I’ve heard this statement before and I try not to laugh while I politely explain that these people don’t understand their future customer,” said Rahul Sood, CEO and co-founder of Unikrn, the esports gambling company.
“No matter what casinos try to do to re-theme the slot machines to attract younger people with new bells and whistles ... it doesn’t matter, you still see more wheelchairs and walkers per square foot in the slot area than in other areas of your life,” Sood said.
Robert Rippee, director of the Hospitality Lab at UNLV’s International Gaming Institute, said millennials do gamble and they take risks but they do not engage in the same form of gambling as their parents and grandparents.
“Understanding how and why they are different as a generation helps the industry understand how gaming needs to evolve to better fulfill their psychological and sociological needs when it comes to forms of entertainment,” Rippee said.
So far, the gaming industry has experimented with skill-based games in casinos in southern California, Nevada, Atlantic City, Connecticut and Oklahoma. It has even held esports events in Las Vegas to attract millennials to resorts.
Those efforts have led to increased spending on restaurants, bars and nightclubs, but not necessarily in spending on slot machines or at the poker tables.
“It’s hard to say if there is a demand for skill-based games, and we won’t know until people have the opportunity to play it,” Schwartz said. “As late as 1998 you could argue there was no demand for online poker, but within five years it would be very popular.”
Schorr has positioned the Downtown Grand as an esports friendly property, hosting tournaments in its esports lounge on Friday and Saturday.
When asked if gamers will ever migrate away from their video game machines and into the casino, Schorr recently said: “Gamers will gamble on games developed for gamers.”
Rippee, agreed, saying: “This generation is the very first generation to grow up with omnipresent technology. Pretending or ignoring that impact upon them is a losing proposition.”
Rippee added that millennials are the largest generation in the U.S. today.
According to the U.S. Census Bureau, some 83m millennials represent more than a quarter of the nation’s population. Baby boomers total 75m, the agency said.
A number of very expensive and large commercial and tribal casinos have been built in recent years, adding to an already crowded marketplace in many parts of the country.
According to an American Gaming Association survey of the casino industry, there were 1,342 casino venues operating in 40 states in 2016. That figure includes 404 land-based casinos, 57 riverboat casinos, 54 racinos, 500 tribal casinos and 327 card rooms.
So with fewer millennials gambling are there too many casinos?
“Well, supply is much greater; however, the question is going to be how to increase demand in this younger audience for the greater supply,” Rippee said.
“Increasing demand from them has more to do with their perception of relevance of the experience offered than proximity.”
“If we use retail as an analogy then it is possible casinos have invested too much in physical plant,” Schwartz said. “But entertainment, particularly live entertainment and dining, are doing well.”
For casinos to succeed in the future, Schwartz said, “they need to be more about an experience than a product or brand.”