October 10, 2016

CT casinos focus on growing Millennial gaming experience

PHOTO | Contributed
PHOTO | Contributed
Danger Arena is a first-person action game that pays out based on how many robots a player can destroy.
PHOTO | HBJ File photo
Foxwoods CEO Felix Rappaport said he would like to bring skill-based gaming to his casino to lure more Millennial gamblers.
PHOTO | Contributed
Ray Pineault, president and general manager of Mohegan Sun.

Move over Baby Boomers. Connecticut casinos are creating new spaces and embracing new games in an effort to pry open the wallets of Gen Xers and Millennials.

The demographic of aging Baby Boomers signal the necessity for change, executives at both Foxwoods and Mohegan Sun agree. Baby Boomers will remain the heart of the casinos' business for some years to come. But younger generations are not interested in passive games, particularly slot machines, and casinos must find ways to cater to younger tastes.

These younger generations demand interactive action and more control over the outcome of their wagers, research shows. They also crave different amenities — from new entertainment options to off-site experiences.

One of the casino industry's responses is skill-based games, which made their debut at the recent Global Gaming Expo in Las Vegas. More than 25,000 gaming insiders poked and probed a range of games that look like they had been transplanted from a Dave and Buster's amusement center and fitted for wagering.

There were video auto races and shooter games utilizing the same video game controllers familiar to Gen Xers and Millennials. Other vendors offered slot-machine variations that allow players a level of choice mixed with chance. Among those are virtual sports — realistic-looking animations that allow the bettor a choice of which side to back but delivers results driven by the same random number generator logic as a slot machine.

At the extreme edge of skill-based gaming are virtual-reality games. A player enters a small glass or fabric cube and plays a classic shooting game, blowing away zombies or oncoming hordes of mediaeval archers. Another variant offers a deep sea dive complete with menacing sharks and a sunken ship to explore for treasure.

Ray Pineault, president and general manager of Mohegan Sun, said he isn't sure which games would be coming to his casino floor, but he felt sure some would appear "within this fiscal year," meaning before Sept. 30, 2017.

Both resorts had teams in Las Vegas for the show.

Casino operators feel different senses of urgency. Melissa Price, vice president of gaming strategy at Caesars Entertainment, set the tone by saying "the platform is burning." Caesars signaled its sense of urgency by signing agreements with both Gamblit Gaming and Game Co. to deliver skill-based games starting this fall.

Skill-based games have been approved by regulators in Nevada and New Jersey.

At one end of the spectrum are pure skill events like a basketball free-throw shooting contest held this summer in New Jersey or golf hole-in-one contests being discussed by several resorts. They pose a logistics burden for operators and monetization opportunities seem limited.

The most promising format for operators involves video-driven games — like Game Co.'s Danger Arena shooter game — that fit in space similar to a classic slot machine. Payoffs are based on the skill of the player and the expectation is a similar return for the house from a whole new generation of gamblers.

For Felix Rappaport, CEO of Foxwoods, the key is developing a portion of the casino where this new wave of players will feel at home. He said his sprawling facility is well suited for hosting unique venues for Gen X and Millennial players, who have different tastes. The closest parallel would be the smoke-free areas carved out in most resorts.

The push to accommodate a younger audience extends beyond the casino floor. Entertainment offerings are a major factor and both resorts are working to offer an eclectic mix of acts. But one new entertainment event offers both unique challenges and opportunities.

Both Rappaport and Pineault report looking at building venues to host e-sports, which has become a Millennial phenomenon driven by network television in much the same way ESPN created the X Games to lure a Gen X audience. E-sports involve teams of gamers competing in classic video games in front of a crowd in an arena setting.

Neither executive is eager to embrace the headaches that may come with running a team in an e-sports league, but both are racing toward providing venues for e-sports tournaments. There are regulatory issues around betting on games, but there's no doubt drawing crowds of Millennials to the property presents valuable marketing opportunities for restaurants, bars and merchandise sales.

Both executives acknowledge "engaging" with regulators about expanding the range of their offerings and neither has felt resistance so far.

Generational gap

Ultimately, the winning strategy may come down to understanding the similarities and differences between Gen X and Millennial players.

During two seminars on the topic at the gaming convention, Chuck Underwood, founder of The Generational Imperative Inc., outlined the experiential differences that have helped shape the generational tastes.

GenXers, now age 35-51, grew up amid scandals in corporate, government and sports institutions. They emerged as self-reliant and distrustful. They seek more control of their experiences.

Millennials, 18-34, grew up with game controllers in their hands but are mired in record levels of student and credit-card debt. Today, they are largely value players who are looking for a social experience.

In the next few months, look for Foxwoods and Mohegan Sun to experiment with finding the right mix of strategies to attract these new players while not alienating the cash-rich Baby Boomers.

See related story: Foxwoods' master plan could invest 'hundreds of millions'

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