During my recent vacation to Budapest, Prague and Vienna, where casinos seemed to appear at every intersection, several fellow travelers on my tour remarked that as non-gamblers, they rarely patronize a casino. All three cities had an ample supply of gaming halls, so these tourists then represented lost revenue potential.
Looking back to my first trip to Las Vegas in the 1970s, I was too young to gamble. Because of the age requirements, I saw little reason to enter the casino, except to dine or see a show or two.
That’s the problem…millions of prospective customers worldwide perceive casinos as offering little more than gambling. According to the American Gaming Association’s (AGA) 2012 annual State of the States report, about 25% of the U.S. population never visits a casino with the purpose to gamble. That equates to tens of millions of adults. So, why are they coming? Or, better yet, why are they staying away and what can the industry do about that?
The annual May East Coast Gaming Conference (ECGC), held at Atlantic City’s new Revel casino resort, emphasized that gaming is no longer recession proof. Casinos are now as likely as other businesses to suffer from unstable economic conditions. The solution is for gaming companies to create appealing experiences that attract customers for alternative reasons.
Caesars Entertainment Chairman, CEO and President Gary Loveman, a perennial conference favorite, summed it up by labeling “brand, service, networking and loyalty benefits, efficiency, capital discipline and convenience” as key attributes of a successful operation. In other words, convenience and brand familiarity mean customer comfort, which so many are seeking.
After the 2008 financial crash, Loveman pronounced the era of multi-billion-dollar megaresorts as dead, wryly commenting, “We learned that a billion dollars really is a lot of money.”
This year, Loveman reiterated the need for fiscal responsibility, calling those giant endeavors a “failed arms race for luxury.” He said, “Even if demand is down, the supply of properties does not go away.” With 53 diverse casinos in seven countries, Loveman ought to know.
With many larger venues operating on shaky ground, many smaller properties barely hanging on, and all points in between, what will the future bring? Technology in various forms remains a key topic of interest under discussion. This year, an international panel had plenty to say during the ECGC’s iGaming seminar.
They promoted the unchartered waters of advancing innovations. For centuries, new inventions grew markets. In the early 20th century, movies allowed millions to be entertained simultaneously, totaling more than if they were at every global live theater. Television expanded that multiple even more, and computers have taken these capabilities worldwide.
How does that concept translate to gaming? Approximately 40 million visit Las Vegas each year, but about 40 million also visit social media site Facebook every five days. That means the Internet dramatically increases the prospects for wider exposure.
One speaker explained the three gaming “frontiers” of the last 80 years of legalized worldwide casino gaming. The passage of statewide gaming laws in 1931 propelled Las Vegas and other Nevada cities beyond their small-town status. Decades later, Asia’s gambling culture and enormous population has opened almost limitless possibilities for international companies. The final frontier for the foreseeable future is the untapped depths of the Internet, which could ultimately reach billions worldwide.
The future of iGaming depends on how governments and gaming operators prepare. Warning against specific problematic actions, London attorney David Clifton cautioned that a sloppy rollout spells trouble. The hodgepodge derived from creating a state-by-state program like Europe’s multi-country iGaming will produce a thriving black and grey market. Excessive taxation, like in France, ruins an operation, but effective enforcement and cooperation with others will develop a solid program.
Many international companies would love to partner with American gaming organizations, but U.S. companies must proceed cautiously and carefully vet these offers. The lure of a quick start sounds appealing, but when and if the necessary legislation passes, their brand could suffer due to violations.
However, smart companies and states are busily developing online gaming foundations to be ready. They recognize that younger generations, their future gamblers, are always near their phones or computers.
Many governors across the U.S. are recognizing the future of coordinated, effective multi-pronged gaming programs. They understand that those frontrunner jurisdictions are the odds-on favorites to succeed. What once seemed remote and out of reach may be within their grasp. Doing it right means everyone wins.