I’ve never done a Top 10-type column on anything. You know, like the Top 10 news stories of the year. Or an “80 over 80,” the top 80 casino executives over 80 years old (it’s a small list). Or the 10 biggest casino-industry challenges in the next decade. It seems these Top 10-type lists are a little subjective and require quite a bit of guessing.
However, I do admit that I have read every Top 10-type list I’ve ever seen about the gaming industry. They seem pretty well informed and even when I haven’t always agreed with a list, I’ve found just considering it to be a worthwhile thought exercise.
So I’ve decided to do my own Top 10 list. I first thought about having a lot of fun with it like “The Top 10 Things Casino Players Hate” or “The Top 10 Reasons Casino Executives Give for Not Spending Money on Marketing.” (Come to think of it, maybe I will do such a list in the future). But I thought my first Top 10 list should be a little more highbrow, a little more thought provoking, for all the casino decision makers out there and might help answer the question, “Where the heck is our industry heading?”
So, for my “Top 10 List of Big-Picture Casino-Industry Trends.” I considered 20 or 30 contenders. I looked at trends that were already a part of the casino landscape and that I felt would only get more important or widespread over the near future. Nothing about COVID; that will eventually go away. Nothing about industry consolidation; that has been happening since the casino industry exploded and became mainstream. Nothing too minor, like the trend of larger slot cabinets (way bigger) or players clubs and cashier cages being combined in one location (I hate that). No, I’m sticking to “the big stuff.”
And of course, I could be wrong about all of it. But that’s the luxury (and the risk) of having your very own Top 10 list. So, I give you:
Dennis’ Top 10 List of (Really) Big-Picture Casino-Industry Trends
1. Technology Will Continue To Play an Increasing Role in Casino Resort Operations: Whether it’s cutting-edge surveillance technology, CRM software, casino management systems, HR programs, do-it-yourself kiosks in marketing or at the hotel, even the remote in the hotel room that controls the damn curtains, technology continues its mass invasion into Casino Land. I believe that much of this is good (and probably unavoidable), but I fear passing a threshold where casino customers can come to a casino-resort and almost completely avoid employees. Problem is, the employee experience (the chatty dealer, the attentive slot floorperson, the friendly and sympathetic cage cashier, etc.) has been one of the casino-industry’s major strengths for all these decades. I hope we find ways to not lose that.
2. Tribal Gaming Continues to Make Inroads as Owners and Operators in the Commercial Gaming World: The Seminoles, Mohegans, and San Manuel Band of Mission Indians in Vegas, the Mashantucket Pequots in Puerto Rico, and numerous other tribal development and management entities are now actively looking (and finding) opportunities in the commercial casino business. Having been successful in their own casino operations, they will continue to leverage their newly gained profits and expertise to prove that, “Hey, this stuff isn’t so hard!” Especially if you pay attention to what’s important to your customers and employees.
3. Sportsbooks and Sports Betting Will Continue its Explosion across the North American Gaming Industry: Soon, it will be hard to find a state in the U.S. where you can’t bet on a sporting contest. Savvy sportsbook operators will continue to look for locations and states where they can be profitable and find ways to increase betting options and “betting velocity.” They’ll continue to grapple with the huge cost of customer acquisition, society’s eventual pushback on too-pervasive advertising, and keeping the industry free of the taint of betting scandals. I’m thinking the end game for many of these sportsbook companies is the “main course” of online gaming, with sports betting becoming the “appetizer.”
4. Online Casino Gaming Will Keep Making Inroads into the Betting Landscape: Hey, it’s already in New Jersey, Pennsylvania, Michigan, and three other states, so expect that spread to continue. Governments need the tax revenues and casinos are realizing that online gaming can benefit them rather than hurt them. And trust is growing that online can be operated and regulated effectively.
5. Cashless Gaming is Poised for a Big Breakthrough: Back in the day, I never thought Ticket In Ticket Out technology would pervade slot machines (boy, was I wrong!). Likewise, I never thought getting funds from your credit or debit card right at the slot machine or table game would ever happen, but it looks like I’m wrong again (witness the opening of Resorts World Las Vegas!). Still, if this new industry segment is to really gain steam as a trend, it better work really hard to stay in the good graces of regulators and responsible-gambling advocates. Not a good look if slot players can lose a big part of their net worth right at the machine.
6. Historical Horse Racing Machines (and Other Non-Traditional Slot Machines) Will Continue to Spread: With help from some savvy lawyers and game developers, the casino industry has effectively worked around laws and regulations meant to prohibit slot machines, basically finding ways to base the slot machine’s results on allowed games like bingo, the lottery, and horse racing. The most recent innovation has been Historical Horse Racing machines that base the game on horse-race results months or years prior. Not slot machines? Well, they sure look and play like them and are spreading around jurisdictions in the U.S. like wildfire and will continue to do so. Ask Churchill Downs if they’re a casino-industry trend.
7. REITS: I’m not a finance guy, so I don’t fully understand the wisdom of Real Estate Investment Trusts (REITs), where casino companies sell the land under their properties, then lease back the land from the REIT landlord, while keeping the casino operation. I’m guessing there are significant tax advantages to this, as well as other financial benefits, or else all the big guys wouldn’t be doing it. So much so that it is certainly a major casino-industry trend.
8. Casino Staffing Challenges Will Intensify: While finding enough help isn’t a problem exclusive to the casino industry, it is one of the business categories most impacted by it. This will get worse before it gets better. And while there are many layers to addressing this — innovative recruitment, career-path development, cross training, job enrichment, pay and benefit improvements, etc. — casinos better get to work figuring this out. Without people, casinos risk becoming nothing more than vending machine arcades.
9. Non-Smoking in Casinos: Originally just the cause of anti-smoking zealots, the push for non-smoking casinos has now reached the mainstream and become a top trend. During COVID, many casinos have banned smoking in their facilities, including one of the most successful and best run casinos in California. New Jersey is seriously considering a statewide casino smoking ban. The past conventional wisdom said that smoking bans cost casinos real money. But now that 85% of the population in the US doesn’t smoke, it may just be that ALLOWING smoking is costing casinos money. Keep an eye on this trend.
10. Casino Customers Will Continue to Get Squeezed (Until They Yell “Enough!”): I’m not referring to inflation here. Rather, I’m referring to the ever-growing trend to raise prices and lower benefits for casino customers under the mistaken notion that “They won’t notice” or “They won’t care.” Too many casinos are testing to “see what they can get away with” without hurting (indeed while helping) their bottom line. Resort fees. Tighter slots. Paid parking. Fewer and lesser player benefits and offers. This trend will continue until casino customers scream “Enough” (and they will). Or until a savvy operator, who restores or maintains value for its casino customers, begins to steal all of the business.
These are the major casino trends that I see today in our industry. There may well be others, but these should give you much to think about and work on. Might as well get cracking.
Earlier posts by Dennis: