In the COVID era when it’s difficult to isolate trends and forecast what’s to come, one data scientist predicts the gaming industry will be volatile but strong in 2023 and is better positioned now that Millennials have found their way into casinos.
Andrew Cardno, co-founder and chief technology officer of Quick Custom Intelligence, was part of a four-member panel Wednesday at the Indian Gaming & Tradeshow and Convention, moderated by Deanna Scott, CEO of Raving Consulting.
The overriding takeaway from the panel discussion, “Using Trend Data To Discover and Protect Incremental Revenue,” is how difficult it’s been to analyze data and identify customer trends during COVID. Trend data used to be collected and analyzed month over month and quarter over quarter, but since COVID, the trend line has shortened and operators need to find new patterns that will drive more revenue, maintain the revenue gains of 2021, or help to find incremental-expense reduction.
“A lot of properties are making a lot of money and that profit is wonderful,” Scott said to her four panelists in asking about 2023 forecasts. “There are fewer slot games and people are spending more money. We don’t have a buffet. Is the long-term sustainable? Or are we killing the golden goose?”
Cardno agreed with other panelists that while there are no trends, the obvious trend is revenue and that is up. The questions are why, how can that be, and where is it coming from?
“Other entertainment industries are losing, because it’s coming from somewhere,” Cardno said. “My forecast (for 2023) is that it’s going to be very volatile, but strong. The safety aspect, the wide range of choices, and how gaming operators are changing different types of products (like adding sportsbooks) and diversifying the industry – I think it’s going to maintain a strong position. Maybe that was something we thought wasn’t going to happen ten or even five years ago when everyone was thinking about Millennials. That’s changed now and we’re in a very strong industry.”
Still, Cardno gave himself an out as he joked, “I wouldn’t build my budget on it.”
Trevor Taylor, a Raving partner of gaming operations, said there remain a lot of unknowns in making a forecast of what’s to come in 2023.
“What is tomorrow going to bring? Is it $9 gas prices? It’s being flexible and agile and looking at smaller bites, then deploy and measure, redeploy and measure, and redeploy. 2023 feels like a decade away to me.”
Francesca Voorbrood, a managing manager/profit builder with Raving Consulting, also agreed on the lack of trends to analyze, but offered some advice. “The bottom line is as leaders, we need to change our mindset of how reinvesting goes and how looking at trend data goes and making your date ranges shorter. That’s going to significantly lower your counts. Will the amount of people on the front line be able to support the number of people coming in?”
Noah Acres, CMO at Acres Technology, said the best advice he can give casinos is to focus on the experience they offer. Everyone has a labor shortage and if a customer needs something, it could be a frustrating experience. There are no easy answers, he admitted.
“If you’re getting exposure to a lot of new players who weren’t your customers before, what are you showing them and giving them to come back?” Acres asked. “If you’re going to keep players you created relationships with when other businesses were closed down, you’ve got to provide something that’s worth coming back to. That supersedes whatever offer you can provide, because a lot of novice players don’t know anything about getting free play or what’s a good or bad offer. They just know a good time when they see one and that they’re treated with respect and feel like they got their money’s worth.”
Acres said an app and real-time one-to-one communication and personalization can play a huge part in that going forward. With a shortage of employees, how are casinos able to have one-on-one conversations with players?
“You can’t. But you still have to figure out a way you can, because that’s what people are getting on Amazon and Netflix and Google-a personal experience in everything they want,” Acres said. “So they go to a casino and no one says hi to them and their only interactions are when they have a problem. There’s got to be a better way to keep loyal guests coming back.”
Cardno said the pandemic has definitely changed the dynamic when it comes to Millennials. For years, many people said the industry wouldn’t be able to draw them into their properties and grow their customer base. Now, however, Cardno warned that Millennials can’t be lumped in with other customers. In using data, casinos need to separate how they analyze long-standing customers from this new group that’s arriving.
“Through some Black Swan event, it grew,” Cardno. “We learned something. Millennial business is there. It’s not the business we were in, though. It’s a new business. Treat it separately. If you start to evaluate these players and line them up against (core gamblers), they’re not going to be the same and have the same type of behavior. Yet they’re a growth opportunity for your business.”
Scott asked the panel how casinos can build separate business models.
“I would ask the branding question,” Cardno said. “What have those customers seen and valued enough to come back and give you their business again, now that they’ve experienced the resort? Was it the safety, convenience, or parking garage? What drove it?”
Acres said first-time or novices play for different reasons than core players, who may go into a property to escape for a few hours and enjoy the gaming experience and its ups and downs. The novice, meanwhile, likes to envision winning large amounts of money.
“They like to chase the jackpot and if you have the ability to segregate your core players from those new players and maybe come up with some kind of value that new players chase, those are the type of things they want more than free play or comps.”
