To satisfy his own curiosity, John Acres recently compared the combined revenue from Google, Netflix and Facebook to gaming industry revenue between 1999 to 2019. Over that 20-year span, Acres found that the three tech giants increased revenue by a factor of 48,000. In comparison, gaming operators increase revenue by a factor of just 2.
The difference, according to the founder and CEO of the Las Vegas-based Acres Manufacturing, is that Google, Netflix and Facebook maximize their use of data, understand their customers and reach them primarily through mobile apps and mobile communications. In contrast, Acres reports, he can walk into some casinos and still find technology that was installed more than 20 years ago, all using only desktop computers.
“Mobile devices are not a meaningful part of the player experience,” he says. “The personalization we do is limited to the monthly mailers we send. We just have a tremendous opportunity to adapt technology, and while we might not be able to grow revenue by a factor of 48,000, I believe we can easily, easily double casinos revenues.”
A 2016 inductee to the American Gaming Association’s Gaming Hall of Fame, Acres began his career as a slot technician before becoming one of the industry’s most prolific innovators. Acres is responsible for innovations like progressive jackpots, free play and the first electronic loyalty system.
With Acres Manufacturing, he developed the company’s revolutionary product Foundation, technology that allows slot machines to connect to apps and produces real-time data, loyalty and cashless transaction through a single mobile interface.
But even as the gaming industry experiences unprecedented growth – according to the AGA, revenue for 2021 reached $44.15 billion at the end of October, surpassing the $43.65 billion generated in the record-setting 2019 -Acres thinks there’s money being left on the table.
The first step to achieve increased gaming industry growth is to recognize that change is necessary, and that it won’t happen overnight.
“I think there’s a fear of change,” Acres says. “There is a fear of `what if I change the wrong thing?’ But you’re way better off to change now and start learning how to follow the data than to wait. I think to double revenue is going to be a five- or six-year journey, and it starts with a casino deciding that gathering information is their primary emphasis.”
That journey, he believes, starts with but is not limited to cashless payment systems. Cashless payments enable casino operators to cut operational costs. The federal government likes cashless because it removes the ills of money laundering through anonymous gambling.
“But also, we have a tremendous opportunity with cashless to do much deeper personalization, because we don’t even have to ask a player to use a card anymore when they move money on to the machine,” Acres says. “When they move money on to a machine, we know their identity. We can paint a much clearer picture of their desires and their behaviors and their histories than ever before, so cashless is more of a gateway than a destination.”
Acres thinks that even if only a small number of customers initially adopt cashless, having that option available provides gaming operators with a solid base of data, even if operators initially aren’t sure how to deploy such information.
“It’s incredibly important because you can always post-process that data and analyze it again,” he says.
While Foundation’s technology is similar to that employed by Netflix or Amazon when suggesting a movie or book that a customer may like based on prior selections, it covers newer and potentially more lucrative ground for gaming operators. The technology can not only recognize a player’s preferences, “but change their experience as they sit there,” Acres explains.
Instead of sending out monthly mailers with coupons for free play or food discounts, the technology recognizes players’ likes and dislikes, basing rewards on time of play and other factors. Players whose balances get low may be given more bonuses or other inducements.
“We have to surprise and delight those players at every turn, and that means showing them the games they know and love with one twist, and then another little twist,” he says, “and slowly migrate them to new experiences and new opportunities.”
Acres says reacting in real time to a player’s situation also can be applicable to sports betting and igaming. But most gaming operators don’t have the necessary personnel and tools to deploy such technology; thus the need for systems like Foundation.
“The business of providing hospitality is huge, and people that must provide that and secure the systems are different than the people who must create and configure them,” he contends. “That’s part of the gap, that we as technology providers have not done enough to provide the assistance that casinos need. That’s one of the reasons we’re raising another $50 million so we can build a stronger team to provide those services.”