INNOVATION/INSIGHT: Does your casino floor suck... generating profit?
Is anyone interested in making money anymore?
Slot machines don’t generate money… only customers do. Empty casinos don’t make a profit. Gaming is an extremely lucrative business but the focus on ancillary facilities, slot machine product, and on gross casino income has blurred our objective of providing a great casino experience for our customers. It will take a revolutionary re-orientation to focus the casino floor design on the customers - and start making money!
It takes serious study to determine what our customers want, and deliver it. Recently, a small group of futuristic thinkers related to the gaming industry gathered in a private meeting in Las Vegas to discuss and strategize about the future of the casino. Several of them are quoted in this article.
The ideas that were discussed ranged from the obvious to the radical. One of the things that was agreed upon by all: “The casino industry is not changing as quickly as the customer, the competition, and technology demands.”
Why do we spend so much money on all of these fantastic casino properties, and then leave the casino floor as an after-thought? While the casino floor is left unattractive, all the areas off the casino floor are in fact being made more enticing - designer restaurants, lavish showrooms, themed retail, spectacular hotel lobbies, gardens, and daylight. To a casual observer, it would appear that everything is intended to draw people away from the casino rather than to it. But it’s neither the restaurants nor the entertainment that we want to draw people to - it’s the gaming floor!
In fact, megaresorts on the Las Vegas Strip fail to lure their visitors to gamble in their casino areas. The Las Vegas Convention and Visitors Authority confirmed that in 2010 visitors spent less money and less time gambling and more money in shops. Meanwhile, the casino operators bragged, “More than half our revenue is non-gaming.” Or more accurately stated: “More than half our revenue has been shifted from a ‘high margin business’ to ‘marginal businesses.’” The casino projects allocated the least money (less than 5 percent) on and devoted the least attention to the casino floor, the place where most of the profits are generated.
“Look at the advertising casinos do,” one gaming executive said. “Most of it is for their entertainment - the least profitable portion of their business.” What makes the casino business different (and potentially much more profitable) than the hotel, shopping center, or theme park businesses? It’s the gaming.
But, tragically, casino design has been a “one-size-fits-all” venue. The casino itself, the place where all the money is made, is still nothing more than a nicely decorated box. “Although most of our profit is made on the casino floor, it typically doesn’t get as much design attention as a restaurant,” comments Jeff Livingston, former casino CEO.
Typically, the character of the casino is only the result of subjective personal preferences of the owner and/or the architect or interior designer. What is missing is a verifiable connection between the character of the casino and slot performance. No one seems to have asked: “How will this feel to players?”
“Many casinos simply aren’t listening to their players and don’t know what they want,” says Glenn Goulet, president of Gaming Strategies + Insights.
The majority of the casino’s best customers, the ones who provide most of the gaming revenue, are over 55 years old. Unfortunately, most casino floors are not designed with them in mind. Here are some other examples of where the link between casino design and functionality has been lacking of late:
• Copycats - Too often, rather than try new ideas, casino managers and executives feel safer copying old ideas, even if they are bad ones. One example is the “Center Bar” at the Hard Rock Hotel & Casino Las Vegas, which has never effectively supported casino play. Somehow, it got immortalized and copied in casinos coast to coast. The concept initially sounds good: to put all the fun and action right up front and in the middle. It may actually be exciting on Friday and Saturday nights – but 95 percent of the time it is a deserted area that gives the initial impression of an empty casino.
• Stagnation is not a great business strategy - The casino itself hasn’t changed much in 60 years. Yes, the dimly lighted gambling halls with mirrored walls, no clocks, and no apparent exits have improved, but not much. In most casinos the room still hasn’t benefitted from real creative thought. It hasn’t become customer friendly, and in most cases, if the guest was taken into a casino blindfolded, when they open their eyes they would not be able to tell one from another.
• Casino design is still in the dark - Casinos and Dracula have something in common: they both go out of their way to avoid daylight. Daylight in fact is an essential human need. It is “restorative.” It wakes us up; it makes us feel better. It’s biological. Why force people to leave the casino to enjoy it?
Windows and daylight have only been introduced to the casino floor very recently. Chukchansi Gold Casino, a facility my firm designed in Fresno, Calif., features both. Another example is Steve Wynn’s Encore in Las Vegas.
• Slot machines are dinosaurs - Henry Ford was quoted as saying “They can have any color they want, as long as it’s black.” Unfortunately, that only works when demand significantly outstrips supply. When supply meets or exceeds demand, an auto company better have colors, convertibles, sports cars and SUV’s.
The story of the slot machine is even worse. With the exception of the elimination of coins and pull handles, they’ve looked exactly the same for decades - a big machine with a gaming display sitting on a box, arranged in repetitive rows, with fixed one-size-fits-all seating. In this age of rapidly changing everything, this dinosaur is headed for the trash heap.
Ask your slot machine sales representatives which machines rank highest with women over 60 and a glazed look will come over their faces. Perhaps they will offer to contact their company’s head of research. But, unfortunately, the research department hasn’t a clue either. Why is that? First, the casino operators don’t collaborate with their slot suppliers by sharing their customer information. Second, the new high-tech slot machines are designed by 30-year-old techie wiz-kids that have created lots of games that they would find interesting. Unfortunately, they don’t really know what 60-year-old women would like, they don’t seem to care, and certainly wouldn’t bother to ask their grandmothers. Ironically, 30-year-olds are not slot players.
The newest games are so complex that players don’t even understand why they have won or lost. This is not conducive to inspiring more play.
There have been significant information technology advances for slot machines, including detailed feedback to display, analyze and tweak slot performance. But the customer experience of the basic slot-on-a-box is much the same as it was 60 years ago. “These server-based games, with stand-alone modules, are an outdated model,” said John Acres, president of Acres 4.0. “Server-centric games are the next generation - nothing is in the box.”
Frankly, the games available on an iPad or smart-phone are far more interesting than a slot machine. And unlike a new game for a slot machine, which takes at least 18 months for approval and production before it hits the floor, dozens of new games are introduced daily as “apps” as they are created exponentially by game inventors everywhere. Oh, did I mention that a slot machine costs $16,000-$20,000, while an iPad costs $599? And, you don’t have to go somewhere special to play on one.
Why is it that young people can be mesmerized for hours playing games on their computer or iPad, and yet are not interested in slot machines? Why aren’t slot machines that engaging? What will happen when these people grow up and the current market dies off?
Change is coming, and not in 10 or 20 years - it’s right around the corner. And as always happens with change, there will be winners and losers.
• Slot floor layout - Slot floor managers are more concerned about maximizing the number of machines on the floor than they are about creating exciting slot environments. Almost no attention has been focused on creating exciting adult “play-spaces” that engage and motivate the players. Many casino executives are creating the same sorts of boring and uninteresting spaces that factory and office designers produce.
In a survey conducted by Delaware North Companies, their customers were asked what they would like that their casino doesn’t have. A frequent answer was – “a comfortable lounge where we can just relax.” DNC quickly accommodated that desire. But, listening to our customers, this also tells us that our players are trying to escape the slot floor rather than being drawn into it.
“We are barely at the dawn of design in slot floors. What we have is layout. What we need to start thinking about is design,” said David Kranes, professor at the University of Utah. “We need slot environments - not unimaginative and repetitive layouts that so often remind us of warehouse floors.”
In my next article, I will outline some of the steps resorts can take to improve gaming floor performance through better design.
Barry Thalden is a partner with Thalden - Boyd - Emery Architects, a Las Vegas-based firm that has been providing design and architectural services for over 37 years. They specialize in the design and architecture of hotels, casinos and related hospitality projects. Their extensive background includes work on over 400 hotels and more than 100 casinos. For more information on the company, visit www. thaldenboydemery.com.