Last month’s annual gathering in Las Vegas showed an American gaming industry with a firm grasp of its challenges and how to overcome them. Players want more time on device? Sold. Use technology to drive innovation and cut costs? Moving right along. Leverage the online space to attract the younger player? More thought than ever is being put into that right now, not to mention some promising new foundations being built in neighboring Canada.
The downturn has fueled a boomlet in the quality of thought that operators and suppliers are bringing to their collective problems. It’s as high as it has ever been. Many manufacturers have used the cushion provided by growth in Asia and elsewhere around the world to invest and improve their overall product. Operators have gradually come to terms with the New Normal and are marketing and executing accordingly.
Of course, it’s always the things that you can’t control that make or break you. More than the top 1 percent of the population needs to feel flush, and even then, technology’s hold on consumers is such that U.S. gaming growth is dependent to no small degree on breakthroughs in the online space. In short, the only things missing for a strong industry rebound in North America are new jobs, rising discretionary incomes and fundamental regulatory change.
Everyone seems to have gotten the memo about players’ diminished budgets. If the games on the slot floor have been slow to account for the squeeze on incomes and employment security, help is on the way. You’ll have to pay for it, of course, but the major manufacturers each presented new games that offer greater hit frequency, less volatility and new and amusing forms of interactivity that aren’t directly tied to draining the player.
Good thing, because apples to apples, the rise of low-denom games has led to the slot dollar only getting you 65 percent of the time it used to, said David Brents, GM at Morongo Casino Resort and Spa. He added that most properties in California are down 10 percent to 20 percent from their high points in 2007.
“When everything became a profit center it was the worst thing that ever happened to us,” said Brents. “With the low-denom games we priced our product really high.” He added that, “What’s working is value F&B, promotional credits and value rooms. What’s not working is high-priced entertainment and restaurants. Gaming customers are value customers.”
The point was reinforced by Jim Rafferty, principal of Rafferty & Associates, at a session on racetrack gaming. “We have to think about free play because what people really want is time on device,” he said.
On the technology side, as has happened in the past, Canada is showing their American colleagues how things might be done in a more forward-looking way. The Gaming Standards Association’s S2S and G2S protocols are presently being applied on a national scale to 25,000 VLTs there, the most ambitious such undertaking to date. The potential of GSA’s protocols to both promote a more responsive and efficient gaming floor was articulated by David Nehra, vice president and CIO of Detroit’s Motor City Casino Hotel. Using the example of a player-tracking and point-of-sale system interface, using the G2S protocol, all the operator has to do is enter the IP numbers for both systems and they start talking to each other.
“We used to have to spend $50,000 on a proprietary interface to integrate those systems, which also had a maintenance fee attached to it,” said Nehra.
Canada is also much further along in the online space, with the British Columbia Lottery Corporation’s launch this year of full-scale casino gaming on its playnow.com site. Loto-Québec also has gotten into the game. The BCLC’s site has had its ups and downs (including a privacy glitch that resulted in a six-week shutdown this summer), but it has proven popular with the ever-elusive 19- to 34-year-old age group, and it has 175,000 registered players, according to Rhonda Garvey, director of eBusiness. One of these was lucky enough to win a C$240,000 slot jackpot, which no doubt caught the attention of at least some of the 11 percent of BCLC customers who have gambled on international sites.
The Canadian intra-jurisdictional e-gaming model will doubtless be closely watched by the United States, where the aging customer base led one astute observer, Paul Girvan, managing director of the Innovation Group, to say that if nothing substantial is done it’s not too early to start drawing comparisons between the slot floor and horseracing, where dying customers were never replaced. Girvan presented research on 1,200 U.S. gamers that confirmed that predominantly online gamers are younger (by eight years on average), better educated and better off financially than bricks-and-mortar-only customers.
This, of course, is the sweeter-than-now spot that the American gaming industry is keen to reach. Now that the limits of the land-based world have grown clear, it’s not hard to imagine how they one day might get there.