Millennials and casinos: bridging the generation gap

Millennials, one of the largest population groups in human history, are entering their heyday. This generation, defined as people born between 1980 and 2000, is already influencing how products and services are consumed, and its influence is likely to grow. So it's forcing companies to look at how they can do business and bridge the gap between consumer generations.

Casino operators and game makers alike recognize the group's potential as critical to earnings. It's the consumers who will lead the business for decades to come.

Millennials or 'Generation Y' are now defined as people in their 20s and early 30s, and generally have more disposable income than the previous generation of young people. They became adults in the Internet era, a time of technological change and globalization. It gave them a different set of behaviors and experiences than previous generations.

"They're interested in completely different games because they grew up in a completely different technology environment," said Darion Lowenstein, chief marketing officer at Gamblit Gaming LLC, a technology provider for online and interactive digital entertainment.

Mr. Lowenstein said older generations enjoy the fact that playing slot machines does not typically involve technology or interaction with others. Slot machines are "simple, easy to understand, have applicable licenses and shiny graphics," he said.

"However, walking around casinos today shows that there is a big age gap. Gamblit Gaming's marketing director says GGRAcia has young people looking for games similar to Xbox, Playstation, mobile, and PC games. But to keep up with the new generation, the products on the floor haven't really changed."

As such, casino operators and game makers need to rethink their strategies to attract this young population, industry officials say.

"It's important to note that we need to attract the next generation," Gavin Isaacs, president and chief executive officer of casino equipment supplier Scientific Games, told GGRASIA.

"We need to ensure that core gaming products exist for those who want to continue what they love, while also allowing others to try things that they can bring into [casino] assets," he said.

Skill-based games

Las Vegas' Nevada Gaming Board approved a regulatory change two weeks ago to allow technology-based and arcade-like features to be used on slot machines. Two Nevada legislatures approved the bill in May.

Isaacs said skill-based games are not a new idea in the casino industry, and typically the rate of return from slot games to players can be reserved as a skill element during game functions. 슬롯

"Bally [Technologies Inc] played a game called Pong in 2008. The idea was that if you play a game and win a feature, you'll get 92 percent of the revenue. But the way regulations worked at the time could get up to 4% more in technology. So you could play games with machines, and machines could keep speeding up. And if you win the machine, you'll get up to four percent more," he said.

Following a recent agreement from the Nevada gaming board, gaming testing expert and technical consultant Gaming Laboratory International LLC (Gaming Laboratory International LLC) announced that it is "now accepting Nevada's technology-based gaming applications."

"This is an exciting time, and engineers and mathematicians are ready for today's adoption to fulfill the needs of the industry and play our role in ensuring product compliance," Ian Hughes, GLI's vice president of global services, said in a statement.

"No one can fully predict the types of gaming products you see on Nevada's game floor, as regulations open the door to all types of technology and hybrid games," he added.

Under the new rules, slot machine games can now be developed within Nevada and submitted for approval. "Physical skills, proficiency, knowledge and strategy, and awards can be paid accordingly, allowing greater flexibility in payment rates."

Every casino operator says, "[Millennials] should be involved I know it's crucial to their success," Lowenstein said.

"Many casinos have successfully rebranded themselves with lavish pool parties, tens of millions of dollars-cost nightclubs, and famous talent, but they have yet to find a way to engage millennials in gambling outside a handful of table games like Black Jack," said a marketing expert.

"I think if millennials offer a gaming experience that's more like what they're already doing outside the casino, they're going to play. "Barcade, Dave & Busters, there's all the evidence," he added. The first mentioned the U.S. bar chain, which offers classic arcade games, and the second mentioned the full-service restaurant chain, which each offers video arcade.

It feeds the industry

Isaacs of Scientific Games told GGRAcia. "The problem with skill games is that players build [skill-based] games that they know and love (in a non-casino environment), and they don't work the same way, and they won't play again. And the other part of the problem is, if you create a game where you win a casino, the casino won't buy it. So what we're really talking about is a technical feature."

He added: "But what we're seeing around the world is the growth of games like Crab. This is because young players like these community-style games."

Some analysts predict that the casino industry's move toward technology-based slot machines could energize the market and attract young customers, but not for years.

"The reality is the older generation that will continue to feed the gaming industry in the short term," said Steve Galloway, a partner at U.S.-based Global Market Advisors LLC.

"The long-term strategy should ensure the attention of millennials, but current gamers will continue to provide cash flow," Galloway told GGRASIA.

Alex Boomazny, director and financial analyst at Peach Ratings, said in a commentary that millennials who attend casinos spend more time and money on food, drinks and entertainment than gambling. The insight was published in May by Fitch Ratings' website thewhyforum.com .

Citing a survey conducted on behalf of the American Game Association, Boomazny said millennials still enjoy going to casinos, but "spend less money on casino floors (bread and butter for casino operators)."

According to the same survey, the younger generation is more interested in technology-based games "such as fantasy sports and poker" and more familiar with online games, the Fitch analyst said.

Rethinking game floor design can be a way to attract young customers, suggested a report by design and architecture consultant YWS Design and Architecture. "Existing facilities may want to experiment with zones, lounges and other quarantined areas that can be redesigned to better attract millennials," YWS said.

Millennials in China

Marketing experts agree that millennials think of leisure activities as social experiences that they share with their friends. As these young consumers reach their heyday, certain groups appear to be in the spotlight as China's millennials.

This particular type of customer is considered increasingly important to companies in the leisure and entertainment sectors, including the casino industry. According to a separate YWS report published in August, a survey of 1,000 Chinese millennials in July identified Las Vegas as the most popular outbound destination for leisure travel.

China's millennials, including those aged 25 to 34, total more than 200 million, accounting for about 17% of China's 1.3 billion population, YWS says: '$264 billion in Dragon Babies: Next Important Customers – Understanding Chinese Millennial Leisure Travelers'

The YWS report, recognized by Roberto Copola, head of market research and consumer insights, noted that Chinese millennials will be a demographic force underpinning corporate revenue growth in the leisure sector over the next few years.

"Bringing Chinese millennials into physical products or physical spaces requires acknowledging that what has worked in the past is likely to not work for them," the consultant said.

"Investment in consumer insight research tailored to the specific goals of development projects that attract Chinese millennials will be a valuable investment for any company looking to capitalize on this huge potential revenue stream," it added

Lowenstein of Gamblit Gaming agrees that China's Millennial Consumer Group is a "huge market to tap." "I expect there will be many Chinese-themed interactive arcade-style betting games in the future," he added.

Galloway of Global Market Advisors said it is important to distinguish between VIP millennials and mass market millennials when observing the behavior of Chinese millennials.

"In the case of VIPs, yes, they're a good group to spend a lot more and meet their needs. However, considering the current crackdown in China, the group is also spending much less," the game consultant said.

"[Casino] An important balance between operators and manufacturers is to continue to develop social media that integrates into ground-based technologies, ignoring the investigations and demands of non-millennials, key customers who generate most of their revenue without spending too much mental capital here," he added

the charm of social games

Union Gaming Research LLC said in a note released after last year's Global Gaming Expo (G2E) in Las Vegas that interest in social gaming shown by land casinos and game makers has increased.

Analyst Robert Shore noted that the social gaming industry has recently emerged, but has already evolved into a $2 billion+ segment, including casino-style games as one of the fastest-growing segments.

Last year, then-independent casino equipment maker Bally Technologies paid US$100 million for Israeli-based online social game software developer Dragonplay Ltd. The company has developed games for several online platforms.

Other manufacturers have created free online versions of successful slot games. Australian-based slot machine maker Aristocrat Leisure Ltd has made the Heart of Vegas software app available on multi-platform architectures, including Facebook, iOS and Android systems, featuring 11 games found in ground-based casinos.

Taking advantage of the online wave, other companies are developing online systems for mobile games. Betcade, which announced its launch on September 1, describes itself as the first Android-only app store for real money games.

"People overwhelmingly prefer mobile apps to the browser experience. Time spent on apps now exceeds time spent on browsers. However, there is currently no efficient mechanism to search for or distribute real money apps in the same way as all other app categories," David Chang, founder and CEO of Betcade, said in a statement.

Betcade's App Store will offer similar features and user experiences to Apple or Google stores, including ranking and promotions, content, and a streamlined payment system, the company said.

Lowenstein said companies in the casino industry could find a "pleasant way to innovate" because the market "is already aware of the types of social interactions they like [for millions of years] thanks to all of the phone's social platforms."

"I think interactive table games and multiplayer betting experiences where users compete with each other or with their homes are a great way to encourage both social activities and social sharing: 'Look how badly I beat him in this game,'" he added.