No Longer Babies

As Baby Boomers age, casino operators worry about attracting younger players who prefer table games to slots and are less interested than their parents in visiting casinos. Reaching Millennials through gaming devices is possible, but the regulatory process also needs to change, experts agree.

Attracting younger players to casinos was a general theme at the recent Southern Gaming Summit in Biloxi, Mississippi. Keynote speaker Tilman Fertitta, owner and chief executive officer of Fertitta Entertainment, said,  “One of my scariest things that is young people do not play slot machines.

I think slot machine companies have done a good job of creating games for young people, but they want to play table games. It’ll be interesting to see where we are in 20 years. It’ll be interesting to see we’re able to convert this new generation to slot players.”

Joel H. Simkins, a senior gaming analyst with Credit Suisse LLC, said casinos are “still a very good business. But certain markets are suffering. When I talk to developers, it’s a core baby boomer demographic. We know these people are going to move on or spend less as they get older or develop health care issues.” As a result, Simkins added, “The industry needs to broadly think about how to get a younger demographic into the building. Those people are playing social games right now. They’re not really seeing casinos as appealing.”

Patrick Moore is senior director of tech compliance at Gaming Laboratories International, agreed. “In the last 12 -18 months, we’re starting to see more innovation. We don’t know the future, but we know the demographics are changing. If you can’t get the next generation to play slots, it will severely damage the casino properties.”

Daniel Holmes and Brandon Loeschner, authors of RubinBrown’s Commercial and Tribal Gaming Stats 2014 report, also noted casinos must adjust their strategy and attract younger patrons. “The target market for the traditional brick-and-mortar casino floors is aging, so now is a critical time for casino operators to identify ways to make their facilities more attractive as local entertainment destinations for the younger generations,” Holmes said. He predicted for the rest of the year, the key trends will include: continued market expansion, partnerships between states and diversification beyond the gaming floor.

Moore suggested reaching Millennials through gaming devices. “You’ll hear it called a couple of things like exponential gaming or adaptive gaming. The idea that it’ll recognize who you are and have stored information about your progress in that game. It will allow you to have new content and new experiences through the game and then pushing even further. If you get to a certain level you’re going to get bigger payouts, better odds, bigger prizes.”

But, Moore noted, “Those kinds of things that can’t happen today because of the regulatory process. Those are the types of decision points that will come up.”

Geoff Freeman, president and chief executive officer of the American Gaming Association, said, “Is the next generation, with their iPhones and iPads, going to be interested in sitting at a slot machine? Probably not, but that’s what law allows us to provide.”

He noted in Mississippi, policymakers “see gaming as one component in their economic development strategy. That’s the way to look at it. We have other communities where they look at it as a necessary evil. We’ll take the dollars but then we’ll tie your hands.”