Execs say eSports, casinos are compatible, but authenticity, experimentation required

Execs say eSports, casinos are compatible, but authenticity, experimentation required

  • Cory Roberts, CDC Gaming Reports
October 5, 2017 8:50 PM
  • Cory Roberts, CDC Gaming Reports
  • Other

The eSports community has been around for decades, but has experienced explosive growth in the past five years. Tournaments such as the International Dota 2 tournament – with its $23 million prize pool – exceed, in total prize money, the PGA Masters.

However, these large tournaments are few and far between. Blaine Graboyes, CEO of GameCo, mentioned Thursday at an eSports seminar at G2E that many casinos come to him expecting to host large tournaments and make their revenue from ticket sales. The data, though, shows that only 9% of global eSports revenue in 2017 is from ticket sales. On the other hand, sponsorship and advertising make up more than half.

As Downtown Grand CEO Seth Schorr emphasized, the casino industry is well-positioned to generate revenue from the eSports community. Rather than a few large tournaments however, casinos need to make their casinos a 365-day destination for eSports fans and participants.

As food and beverage sales recently eclipsed slot revenue, casinos continue to try to figure out ways to diversify their customer base and revenue.

The key is to create an authentic environment that specializes itself to the different eSports communities, such as how businesses may specialize in golf or football fans. Since launching eSports at the Downtown Grand in 2016, the casino has constantly tweaked its revenue generation, whether it’s optimizing food that gamers prefer, to focusing on a specific game’s community or communities. While some games such as League of Legends may attract gamers that are willing to pay a higher entry fee for a higher prize pool, other game communities, such as the fighting game community, prefer a lower entry fee.

However, according to the data Schorr analyzed, the fighting game community outperformed all others in beverage revenue. This kind of granular understanding of the various game communities can contribute to the strategies casinos adopt in integrating these events and physical spaces into their casino.

Graboyes further emphasized that different eSports game communities not only have different preferences and spending habits, but also appeal to different demographics. Rather than a catch-all, casinos may find themselves specializing in specific eSports that better fits their overall casino demographic. For example, a casino with an older client base may become a hub for racing games, integrating McLaren-sponsored racing simulation.

As the Downtown Grand has learned, eSports can be a profitable area for casinos, but authenticity, experimentation, and knowledge of the communities being catered to are key.