Last month’s Southern Gaming Summit in Biloxi, Miss., kicked off with a keynote speech by Keith Smith, president and CEO of Boyd Gaming.
Smith walked the audience through what should be by now familiar terrain about the challenges facing regional casino operators, but he did so with a practical eye toward the future, summing up the demographic and product challenges facing this industry in terms that should resonate with any stakeholder.
“We must address the long-term demographic shift in our customer base that has just begun,” said Smith, adding that baby boomers have been our foundation; a fact won’t be changing anytime soon. There are more than 75 million baby boomers in America today and they are on the verge of becoming the largest generation of retirees in this nation’s history. An average of 10,000 retire each day and that will continue for the next 15 years. They control about 70 percent of this nation’s disposable income, so it’s no surprise that the boomers are extremely important to the casino business today and will continue to be so for years to come.”
But baby boomers will not be the core customer of tomorrow. Behind them are the next generation, the Millennials.
“This generation is even bigger than the boomers, accounting for more than 80 million Americans,” said Smith. “While they do not rival the boomers in spending power today, they are about to enter their prime spending years. And, eventually, the Millennials will be the beneficiary of the largest generational wealth transfer in history, some $30 trillion in inheritances, by some estimates.”
The Millennial generation will dominate and reshape this country’s economy in the years to come. “Their unique experiences and expectations will force every company to re-examine how they do business,” said Smith. “If we‘re going to remain strong, we’re going to have to figure out how to make Millennials our customers today and, more importantly, our core customers tomorrow. And that presents some unique challenges for all of us. For the Millennial generation, there is no mystique about casino gaming. Their view of gaming is simply that it’s another form of entertainment, and one that has been readily accessible to them most of their lives. And, as some analysts have recently noted, this is a generation that has not been as enthusiastic about consuming our product as generations of the past. We cannot simply go about our business as usual; we must adapt to connect with this emerging consumer base, while still appealing to our core customers today.”
This comes as a challenge for regional casino operators, who cannot support Vegas-level investments in non-gaming amenities. “Some of the things that we are looking at Boyd have to do with the casino product itself,” said Smith. This includes working with regulators to allow for some forms of skill on the slot floor; legalizing sports betting and continuing growing online and interactive gaming. It’s a very straightforward argument, one that the entire industry can and should embrace for as long as it takes.
When I started covering this industry 20 years ago as editor of International Gaming & Wagering Business, it was a different world. We had a huge full-time editorial staff, correspondents all over the world and columnists galore. But there was only one piece of writing I never had to worry about; John Romero’s monthly casino marketing column. It was always on time, never too long or too short and clean as a whistle. I once made the obvious joke to John, that too many writers like him would put all us editors out of business. John thought that that was funny, and re-told it in public several times over the years as we extended our relationship into the events space with the Casino Marketing Conference. Or maybe he was just being a nice guy, letting the audience know we were friends, and that I was OK by him.
For all of you readers out there who may not have had the chance to meet John, that was him; the nicest guy in the room and someone who was a very quick study on the topic of people, their quirks and needs. Accomplished, too, as you can see from our news item on page 8. John received our first ever Lifetime Achievement Award, and subsequently agreed to let us use his name for the conference’s awards program, The Romero Awards, which recognize excellence in casino marketing. We’ll be presenting them again next month, but it won’t be the same without you, John.