Changing gaming preferences, primarily among millennials, have many casino executives looking for ways to engage younger visitors and embrace the next generation of gaming.
A four-member panel of experts at a G2E session on Wednesday inform an audience of gaming executives and others on the progress on implementing skill-based gaming in casinos.
PwC Director Alec Massey moderated the hour-long forum, with panel members IGT International Marketing Vice President Jacob Lanning, Gamblit Gaming CEO Eric Meyerhofer, Caesar Senior Vice President Melissa Price, and New Jersey Gaming Enforcement Deputy Direct George Rover offering insights and opinions based upon their experience thus far with skill-based games.
“We have to change the form of how people seek entertainment, Lanning told the audience.
Among innovative ways under consideration are adding more skill-based gaming at casinos, but skill-based games take a significant amount of time to develop, and that time equals money, Lanning said.
He suggested conducting extensive consumer research prior to developing skill-based games, so that game developers can learn consumer expectations and deliver products that meet those expectations.
“We need to make good games that players love. Otherwise, none of this will work,” Lanning said.
From a regulatory standpoint, “I want the regulations to stay out of the way and foster innovation,” Rover said, referring to the development of skill-based games.
With skill-based games, Rover indicated that the industry asked New Jersey gaming regulators to establish regulations to foster the emerging industry, possibly the first time ever that regulations have been requested.
Aside from standard concerns about gaming fairness, handling patron complaints, and establishing revenue and taxation models, Rover said that regulators for the most part are willing to let the gamemakers come to them with new products; the regulators will try to make them viable and to foster innovation.
As for actual game play, the panel generally agreed a purely skill-based game likely would not be a success, due to the likelihood of only a relatively few being skilled enough to compete.
Lanning likened it to chess, which is a purely skill-based game, one in which there is little left to chance; the more skilled player likely would win every time.
Yet, with an element of chance, those who are less skilled still stand a chance of winning, thus making hybrid games that combine elements of skill and luck a more satisfying game experience for a wider audience.
Meyerhofer suggested hybrid games, which offer skill-based gaming with an element of chance, are the best way to meet the needs of current and future gamblers.
At Gamblit, “We’re all-in” on hybrid games, Meyerhofer said, adding that finding the right blend of skill and luck will play a critical role in a hybrid game’s success.
Rover agreed, saying: “It’s the hybrid game that I see being the game of the future.”
While hybrid and skill-based games might be a big part of gaming’s future, gaming operators currently are trying to figure out how best to use them to generate more revenues and drive greater profits.
Skill-based games don’t compete against slots and other traditional forms of gambling, Lanning said. Instead, they are competing against mobile apps and other forms of bite-sized digital entertainment.
“It’s going to require putting together a player experience and give people something to get involved in,” Meyerhofer said. “If you can engage them, you can monetize it.”
Engagement could occur in many ways. With a scarcity of skill-based games in casinos, he suggested promotional events could help to bring more people to the casino floor, people that normally would not visit.
The idea isn’t to cannibalize current revenue streams by diverting the existing customer base, but, instead, to bring in new casino visitors who otherwise might never set foot inside a gaming establishment, aside from seeing a show, dining, or shopping.
Without new innovations to bring in new players and foot traffic, Price said casinos will survive, but they face significant threats to long-term viability if they don’t initiate changes now.
“We really feel like there is a burning platform,” Price said, referring to declining interest in traditional slots and table games, particularly among millennials, and a lack of innovation on gaming floors.
Price said a snapshot of a casino gaming floor twenty years ago would show little difference from what most casino gaming floors look like today, and there is very little difference in how people play.
“People are interacting differently today, and we need to be in the front-row seat” of driving innovation, Price said.
The innovation won’t come easily, though, she cautioned, saying: “It’s going to be a journey.”
Echoing that sentiment, Lanning said casinos need to give people a reason to visit the property, but that can be challenging.
“We must build confidence in players” and “provide the tools that help operators drive people to those games,” Lanning said. “You have to have a pool of players competing at a high level and find ways to marry skill and chance,” he added.
Although skill-based gaming is viewed by many as a key element to future casino gaming success, Price cautioned that table games have been around for 100 years, and will continue to remain relevant and profitable, as will other traditional forms of gaming.
But new games are needed to bring in more of the growing millennials and to tap into the skill-based gaming experiences of older generation X members, who also grew up playing skills-based computer and video games and share a general aversion to games of chance.
Assessing the success of skills-based gaming will require a more comprehensive look at how they impact casino operations, Price said.
No longer will casinos be able to rely upon traditional metrics, like time on device and win per square foot or unit. Instead, Price said casinos will need to take a broader look and see if the skill-based gaming is driving new demographics in various areas.
Lanning said gaming operators also will need to come with up with new net-revenue metric to measure success. Each game will be significantly different from any others, and that means different types of successes that can’t be measured via simple win totals, he said.
Price also said casinos will need to do more than simply modify their amenities to appeal to millennials and others who otherwise generally don’t like visiting casinos and gaming destinations.
Changing and improving amenities in a popular tourist destination like Las Vegas certainly will help to drive participation among millennials and non-traditional gamblers, Price said.
But that approach won’t work in smaller markets, like Gary, Indiana, where she said it will take new games and gaming products to attract new visitors and bettors.
And, those products need to foster a highly social and interactive gaming experience. “It’s about a level of interaction and a level of entertainment,” Lanning said.
Yet, simply placing one or more skill-based hybrid games on a casino floor won’t drive success, Meyerhofer said. “It won’t happen overnight,” he said. It will require promotional support, patience, and ample tuning to bring about success.
Price likened the rise of skill-based gaming to the evolution of electronic table games, which she said resulted in a draw of new players, and where the gaming manufacturers worked with casinos to improve the product and gaming experience.
“If we had given up three years ago, we would not be where we are at today,” Price said.
