A Millennial and Baby boomer walk into a casino.
Boomer: “Let’s go hit the slot machines.”
Millennial: “This is a joke, right?”
If you don’t find that funny, don’t worry. Neither does the established casino industry.
The generation born between 1980 and 2000 has come of age and is a staggering 80 million strong. For the gaming industry, it’s a group that holds all the cards – just not enough are holding those cards in casinos. Combine that with the shrinking baby boomer generation, and the casino industry is concerned.
“It’s an absolute emergency situation that we’re in right now,” Gregg Giuffria, CEO of G2 Game Design and former co-owner of Hard Rock Hotel & Casino in Biloxi, said last week at the Southern Gaming Summit, a gathering of regional and national casino owners, operators and experts in Biloxi.
“Baby boomers (born between 1946 and 1964) will not be our core customers forever,” Keith Smith, CEO of Boyd Gaming, said in his keynote address. “Millennials are about to enter their prime spending years, and their economic clout is growing.
“Eventually, millennials will be part of the largest wealth transfer in history, $30 trillion in inheritances by some estimates. The millennial generation will dominate and reshape our economy for years to come.”
Millennials grew up in an era of cell phones, video games, overprotective and helicopter parents, in many cases divorced.
“They value authenticity, transparency, and open environment that fosters social collisions,” said Roberto Coppola, Global Director of Marketing Research for YWS Design & Architecture in Las Vegas. “They are highly skeptical of social messages and traditional marketing. They are more likely to delay marriage and home ownership, which is an impact of the recession.
“The oldest millennials turn 35 this year. We sometimes refer to them a ‘NextGen,’ but they are really ‘Generation Now.’ They are disrupting the market currently, and that impact will grow exponentially over the coming years.”
There is no simple – or consensus – decision on how to attract millennials.
The most urgent change will be in the games they don’t play – which means a drastic overhaul in the slot games, the main money-maker for casinos and a favorite of baby boomers.
“In the future, when you walk into a casino, you will be able to play games like Halo, Call of Duty, Candy Crush,” said Giuffria. “The intention is to take games on social media and bring them into casinos.”
Giuffria said games will be rebuilt with new algorithms and mathematics, creating a new type of game
“It’s over — slot machines as we know them,” said Giuffria. “Five years from now, there will be casinos that will have about 50 percent slots. Ten years from now, 10-15 percent of the casino floor will be slots and people will talk about how their parents played those. It’s a compressed acceleration.”
“Our research is showing a growing affinity for table games,” said Smith. “If you’d told me five years ago that we’d be adding table games, I would have sent you for a drug test. But that’s what we’re doing today — we’re adding table games.
“We’re seen an evolution around the table games business,” said R. Scott Barber, regional president for Caesars Entertainment’s Mid-South operations. “We’re seeing a growth in poker. Table games play and our hospitality revenue streams – day clubs, night clubs, restaurants and retail development – have become very prevalent with the younger generation.”
“They find that slots are boring, slots are antisocial and slots are confusing, which caught us off guard, but they don’t consider slot games to be intuitive,” said Coppola.
Before a new style of game is introduced at casinos, it must first pass regulatory hurdles. A change that is too drastic might need legislative approval.
“The Gaming Control Act defines what is a slot machine, and what is a table game,” said Allen Godfrey, executive director of the Mississippi Gaming Commission. “If a new game is something we can work within the definition, then we can approve those games. If it’s something outside the definition, then we might have a problem.
“If we have to reopen the gaming act, then they can make other changes, such as changing the tax rate or something else.”
New Jersey has already passed some laws aimed at innovation, and Nevada is considering an innovative bill.
Even before (and after) games are in place casinos must figure out how to attract a younger audience.
“On average, Millennials spend 12 hours a week gaming, but it’s not in a casino,” said Kim Pieper, founder and CEO of Digital Bring, an online marketing firm in Denver. “Millennials tend to spend money on experiences, rather than things. You can see that in the concert industry. It’s how we’re going to change to appeal to new demographic.
“You have to have a completely separate marketing strategy to appeal to millennials. We need to rethink a lot of the big promotions, like big cash wins, and see how we can turn them into experiences. Millennials are also very cognizant of what companies are doing. They want to support companies that are giving back to the community.
“Casinos have done a better job utilizing email and Facebook from inside the facility, but millennials are jumping off Facebook and using other media like Twitter and Instagram. The earlier you can get on, the earlier you can engage millennials. It may not be slots, but table game and concerts. Casinos need to start building some brand loyalty.”
“Millennials are very a social group,” said Elena Freed, COO of Red Square Gaming, a Mobile, Ala., advertising group that specializes in gaming. “They always have their phone and are Snapchatting, Tweeting, or on Tinder. The idea of millennials moving away from slot machines is true because a slot machine isn’t social.
“Understanding the thinking and motivation of your audience is important — knowing how they may come in for a drink special or a table game.”
“We’re learning how to monetize some of those amenities,” said Jim Hoskins, COO of Golden Nugget Casino in Biloxi. “Early on, it was slots and a big buffet. In established markets, it has been slower to come. Millennials are not scared to spend in a high-end night club. But how do we drive them in? It’s not going to be with a coupon. First we just need to get them in.”
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