Gaming Hall of Fame member John Acres said casinos risk becoming as obsolete as video stores if they don’t evolve and become fanatical about their service to customers. He urged the industry to use artificial intelligence in that endeavor.
Acres, inventor of the first player tracking system as well as progressive and bonuses for slot machines, expressed his criticism recently about the gaming industry at a UNLV-sponsored educational series.
He mentioned the defunct Blockbuster Video for its practice of extracting late fees from customers and for not being forward-thinking in acquiring Netflix, which had a more consumer-friendly model in mailing movies and later innovated to online streaming services. Blockbuster was more interested in its process and profits instead of being fanatical about their customer service, he said.
“You can see late fees on a video are like resort fees and parking fees for hotels,” Acres said. “It’s something you do for revenue that you need but do it in a way that isn’t necessarily pleasing to the customer. As long as you have enough customers to overcome that displeasure, you’re all right. But when you don’t have enough customers and something disruptive comes along, then all of the people that are paying all of those fees they didn’t like will instantly abandon you.”
Gaming revenue grew before the recession but while it has grown after the recovery, it’s at the rate of inflation, Acres said.
“We’re not growing. We’re slowly dying,” he said.
Acres was blunt about taking on casino companies about how they treat customers.
“It’s nothing personal,” Acres said. “They’re ‘I don’t know you, but if you put enough money in a machine, I will give you a coupon for a drink.’ I think that’s a lousy way to create a relationship. It makes fiscal sense and spreadsheet sense, but it doesn’t make emotional sense, and gambling is an emotional business.”
Even though he has been critical of casinos on the Strip, Acres said Las Vegas is “doing this wonderful job of being resorts instead of casinos.” In many ways, Las Vegas is doing “this magnificent job of giving people what they want,” because coming here has emotional value.
Acres told the conference construction of a $1.8 billion football stadium to move the NFL’s Raiders to Las Vegas, and a $2.4 billion expansion of the city’s convention center, makes sense and fills hotel rooms.
“Maybe gambling won’t be part of it or is a less important part,” he said.
Casinos operated by American Indian tribes, could lose business if they don’t revolutionize the casino experience.
“No casinos will survive except the online ones that are more efficient,” Acres said. “The only benefit a casino has over online is human engagement and if we don’t take advantage of that, we’re at an insurmountable disadvantage over the long term because of the cost of operation.”
Acres cited stats showing half of casino customers don’t sign up for a player’s reward card where they can earn benefits. He added there is something “fundamentally wrong with the relationship we are offering them.”
But Acres also termed players clubs as “bribery” because customers are valued by how much they spend.
“We confuse loyalty with bribery,” Acres said. “What we hear is how there is no loyalty among their players. They will go to where the best deal is. But of course, what are you giving them for it.”
A casino in Washington doesn’t give points and beat its competition by putting people on the floor and developing a relationship with customers, Acres said. Their comps cost 3 percent of revenue versus 20 percent for the competition.
For every 10 customers that come into a casino, it’s not unusual that only one will engage with an employee, Acres said. He said Barona Resort and Casino in San Diego is putting more people on the floor “to create more human experience” The property is benefiting from it.
“The No. 1 thing we have found that has moved the needle for revenue is to deliver a mobile technology that reminds the individual employee of the customer’s needs,” Acres said. “We saw revenue at the couple of places we did this in which they greeted people by name rise 8 percent with no other changes.”
Acres said there needs to be a system that is tracking what the player does and can even pay them if they play for a period without winning. Casinos give a whole different experience to high-end players, that that segment isn’t growing as quickly. The future is in the masses.
“The question is how do we bring that personalization down to the $100 (or) $50 player and still turn a profit,” Acres said.
Artificial intelligence would be a way to do it in an economical way, Acres said. The right system would treat players in different ways. An employee roaming the floor would get an electronic dispatch to say hello to someone or commiserate someone suffering a loss or take a drink to someone who’s been there for two hours.
Acres suggested hiring employees for personality and the ability to engage and make a player feel special.
“If instead we created primarily a social experience on the floor that happens to involve gambling, we will thrive,” Acres said.
Barona, for example, brings a cupcake with a candle on it for guest’s birthday. The activity creates a ‘tremendous emotional power, not just for that customer but for everyone else around.”
Acres said the gaming industry should move from game analytics to player analytics. If there was a platform that collected player data and anonymously shared with every game designer, slot companies could simply publish the information in an application server. Casinos would then be able to download the popular games.
“Now you have a platform for evolution and revolution,” Acres said.