NIGA Tradeshow: Casinos floors with fewer and more popular slots can earn more

NIGA Tradeshow: Casinos floors with fewer and more popular slots can earn more

  • Buck Wargo
July 22, 2021 5:59 PM
  • Other

The reopening of casinos after the COVID-19 shutdowns taught casino operators across the country a valuable lesson: Fewer slot machines focusing on the most popular games can earn more and electronic table games (ETG) can fill a vacuum.

During the pandemic, nearly half of all slots in Indian Country were turned off, but the machines still brought in 80 percent of the revenue from the casino floor. That was part of the lesson casino operators will apply moving forward in a post-pandemic world, according to a panel discussion: “Gaming Floor Mix: Lessons Learned from the Pandemic.”

“The pandemic has been very interesting. None of us want it to happen again, but it also presented some interesting opportunities for how we look at things,” said Buddy Frank, a consultant with Slot Strategies and moderator of the panel discussion.

Gaming industry veteran John Boushy, chairman and co-founder of ReelMetrics, an analytics firm tracking slot machines, said the pandemic created an opportunity to track slots that were operating 100% of the time before the shutdowns to only 50% to 65% after casinos reopened in spring and summer 2020.

“The lesson from the pandemic is this: Properties that reconfigured their floor and made it more contemporary ended up driving incremental revenues,” Boushy said. “What was amazing is that we receive information on a monthly basis from more than a hundred properties and we found that while fewer games were open on the floor, revenues weren’t impacted nearly as much as the number of units closed. The reason for that is the operators made the decision to keep their best games up and operational and closed their worst games.”

Boushy said it made him realize that “variety isn’t necessarily the spice of life when it comes to the slot floor.” Slot floors are all about the games customers enjoy playing; when they enjoy playing a game, they stick with it, he said, and that leads to more revenue.

One of his subscribers on the Gulf Coast had its highest adjusted earnings in 2020, despite being closed for two months.

“The biggest takeaway was, if you put the right number and the very best games on the floor, you’ll probably maximize your revenue,” Boushy said.

Kiran Brahmandam, CEO of Gaming Analytics, said many operators haven’t historically looked at who was playing the games, but after cutting machines by 20% to 30% and still making the same or higher revenue, they’re paying much more attention now. That’s because people are spending more time on device and making larger average bets, he said.

“People have been asking if I really need a thousand slot machines on the floor, while before they were asking if I needed more,” Brahmandam said. “Now they ask, can I get more by having less? It’s an interesting shift.”

Melissa Price, senior vice president of global gaming operations for Scientific Games and former senior vice president of gaming for Caesars Entertainment, said that after spending time in newer casino, such as Resorts World Las Vegas, the way people walk a casino floor has changed. Now, more banks of slot machines are shapes and pods, she said. Previously, there was always a hesitancy to have games that were too big.

“They were trying to fit into a certain footprint, but you’re starting to see more flexibility around that and way more opportunities for different-sized games to create more of this personal space on the floor.”

Frank said he’s learned that having too many machines can force people to play games they don’t necessarily like and that can damage any prospect of getting those customers to return.

“It’s important that you play at the intersection of product and player,” Boushy said. “It’s not just about the performance of the slot machine, but it’s also about the players there. Many of the casinos that maximize their profitability have done so by reconfiguring their floors and going to pods, circles, and columns as places to put slot machines. What makes a sticky game or a slippery game at the end of the day is whether players enjoy playing them. Hopefully, casinos will become more analytical as they come out of the pandemic. I think this presents a real opportunity, because a lot of profitability is available by getting smarter about how things are laid out.”

Unfortunately, Frank said, less than 10% to 20% of casinos look at both the customer and slot analytics on a device.

As for electronic table games, Melissa Price, whose Scientific Games is a leader, said personal space has become even more important since the pandemic. Because of that, table games have had a harder time recovering; people don’t want to be around so many others.

“ETGs really fit a need here,” Price said. “They’ve been an important piece of the business for years, but they’ve been two to three percent of the floor. Now, they’re having a chance to grow beyond that, because of the labor challenges casinos are facing and the need for personal space players have now. It’s a very exciting time for ETGs.”

Price agreed with Frank that there will be more stadium-style gaming for ETGs, like is currently happening in Macau. She added they’re having those conversations with many casinos, because of the labor shortage. “They’re looking to create those spaces so it will be like a snowball effect,” Price said.