Land gambling industry scrambling to attract millenial generation

The preference of younger gamblers for more interesting games with skill elements has land casino owners scrambling to meet their requirements, an article in the publication The Tucson Sentinel claims this week.

“Casinos across the nation are suffering from a generation gap, especially at the slot machines, as young people seek more exotic electronic games like the ones they can play on smartphones,” the article reports, noting that this presents a problem not only for operators, but for states that depend on tax revenues from land gambling casinos, which have largely plateaued, according to the Rockefeller Institute.

The situation has spurred operators and game developers to find new ways to satisfy the younger ‘millennial’ generation, which prefers the types of games available on the Internet, including online poker, eSports and daily fantasy sports.

“The research shows that most of the casino gamblers are the elderly population,” said Lucy Dadayan, senior policy analyst at the Rockefeller Institute. “The gaming industry is trying hard to attract a younger population.”

Daniel Sahl, associate director of the Center for Gaming Innovation at the University of Nevada in Las Vegas, told The Sentinel that it is “well accepted within the industry” that gambling as it exists today is not as attractive to millennials as it is to their parents or grandparents.

Polling commissioned by the American Gaming Association (AGA) found that millennials have a reduced affinity for slots found in land casinos, preferring crowded table games, which contribute less to casino revenue than slots.

Alex Bumazhny, a financial analyst at Fitch Ratings, told The Sentinel that millennials want more direction, more choice at decision points, and they are more comfortable with different technology, Internet gaming and social gaming.

Young males especially like daily fantasy sports games which mimic traditional fantasy baseball or football leagues, but allow wagering with real money, he observed.

“Those games are technology-enabled, require decision-making and you have a chance to win or lose money in the course of a day,” Bumazhny said. “That is increasingly important with millennials and tends to take away players from casinos, especially on slot floors.”

The article reveals that gambling machine manufacturers are experimenting with better ways to combine skill and luck in games that feel more like the hybrid products widely available on the Internet.

Many are developing games for the growing eSports vertical, combining chance with skills associated with popular video games like Halo and Clash of Clans, in which players acquire weapons, build bases and compete against other players.

Gregg Giuffria, CEO of G2 Game Design and a former casino owner, says his firm is in the vanguard of new developments.

“I look at it as an opportunity,” Giuffria told The Sentinel. “The concept of pulling the one-armed bandit is gone. The next generation is looking for a different entertainment value.”

He opined that land casino operators have little choice but to adopt new-style games because their revenue will otherwise continue to fall.

“We have solved the problem of blending [chance and skill]” Giuffria said. “We’re going to demonstrate that you will have the ability to play a game that has never been in existence before.”

From a tax point of view, the situation is important; direct casino taxes brought in an estimated $8.6 billion to states and localities in 2012, not counting other economic impacts, such as employment, according to the American Gaming Association.

It also raises the question of how or whether these new online, mobile, DFS and eSports genres should be regulated.