Summary

In this episode, Nick and guest co-host, Dan Cherry, catch-up with Brian Wyman, President and Chief Executive Officer of The Innovation Group. Learn about The Innovation Group's portfolio of advisory services, and listen as the three do a deep dive on consumer demand---pre-opening feasibility analysis, loyalty program construction, player segmentation, promotional programs, and more. The three also discuss the travel and hospitality sector's increasing focus on higher-income segments, and its implications for the future. Also in this episode, reactions to our two-part interview with UNLV's Professor Anthony Lucas.

Transcript

Nick Hogan:

Good morning, Dan. How are things in Vegas today?

Dan Cherry:

Wonderful, Nick. Good to see you.

Nick Hogan:

Likewise. Well, here we are in late September and in roughly one week’s time, the industry will be converging on Vegas for G2E. It’s been a weird year in the slot industry, to say the least. We had some policy chaos in DC surrounding tariffs and immigration has created quite a bit of confusion. And at least in the first half of the year we saw a lot of can kicking and purchasing deferrals, things of this nature, which put many vendors, especially the smaller guys, under quite a bit of financial pressure. So we saw some delayed launches, cancellation of a few annual events, regional trade shows with weak attendance numbers, and over the past couple of weeks some pretty heavy workforce reductions associated with the IGT and Everi merger.

So it’ll be interesting to take the temp on this year’s event and see how people are feeling. I’m hoping that we’ll see some cool launch activity, perhaps some stuff that vendors have had a bit more time to bake, and perhaps hear some reports about things picking up generally. In any event, it’s certain to be a very busy and productive week. So how about you, Dan? Any big plans for this year’s G2E, or specific products or categories of products in which you’re interested this year?

Dan Cherry:

Yeah, I actually just wrapped up with some folks a full week of pre-G2E meetings this week. So kind of got to do a little test run for the real thing next week. And it was great. Saw some really good product, everyone showed really well. So I know some people kind of are so-so that hey, there’s nothing revolutionary out there, but frankly I think it’s going to be a great show. The big boys always present very well, but the smaller suppliers actually this year I think are really bringing their A-game, some new product and everyone’s really stepping it up on the slot side. And I think you have at least four suppliers that are under new ownership this year, in some shape or form that have either gone private or merged. So it will be exciting to see what people bring. And you’re getting ready in a few days to make the long pilgrimage out west as well, right?

Nick Hogan:

Yeah, and I’ll tell you what, on the immigration stuff that we discussed and the falling numbers from international, I have never paid this much for a plane ticket to G2E. They have really slashed capacity and you can really see it. It was just incredibly difficult to get tickets this year and not cheap, but anyway. But I was curious, Dan and all the pre-G2Es, do you get a sense of that? Do you feel that there were some things that let’s say weren’t launched early in the year that are getting launched now? Is that the type of thing that you-

Dan Cherry:

I mean you have a few new cabinets. I think all in all, most of the suppliers seem to have done a really good job of adjusting supply chains where they’ve needed to, to maintain the product quality, but also stay competitive on price. I don’t think you’re seeing major pricing pressure there. It’s interesting, actually, one of the hot topics out there right now is potential impending taxable limit increase that folks are waiting for guidance from the IRS on what that’s going to look like. And then obviously once that guidance comes out exactly how that’s going to be implemented, and it seems like there’s going to be a mad scramble in some shape or form to figure out how to make all those adjustments on the slot floor. So a lot of questions from operators to suppliers about that in particular.

Nick Hogan:

Right, right, right. Okay. Well cool. I think what we can expect is it’s going to be a busy wild week as it always is, so be it. So let’s see. Time to turn to this month’s listener questions. So before I dive in, let me say that we love to tackle any questions that anybody listening may have. So if you have a question about what we’re presenting or something you’d like us to present, please drop us an email at reelcast@realmetrics.com. Again, that’s R-E-E-L-C-A-S-T @realmetrics.com. Our policy is to keep all questions anonymous, so please speak directly and don’t worry about us revealing your identity. That is not something we do.

So Dan, let’s see. The Anthony Lucas interview generated a lot of listener feedback. I won’t say that they’re really questions as much as they are commentary and predictably, quite spirited. We see a lot of all caps activity and a decent smattering of profanity in there. But truthfully, there was no email that I felt really placed the crosshairs on the right thing. And I feel it’s actually fairly illustrative of how the industry debates Anthony’s work generally. So they don’t really address the arguments per se, but caricatures of those arguments. And it puts us in this weird place where people are effectively accusing Anthony of drawing conclusions that he’s not in fact drawing. And for me anyway, it kind of takes us back to that first question Anthony asks when somebody comes at him and it’s, have you actually read the study?

And honestly, Dan of the, I think eight or so emails that I received in response to that episode, I’m not convinced that any of those listeners actually did read the study. So I don’t know, is this just cynicism on my part, or do you largely feel kind of the same way when you listen to this stuff?

Dan Cherry:

I don’t know. I mean, I think there’s a ton of passion obviously, about this topic, right?

Nick Hogan:

Yeah, for sure. Yeah.