While numerous states have introduced legislation around iGaming, only Delaware, Nevada, and New Jersey have created the needed legislative and regulatory structures to move their jurisdictions online. With a stagnant legislative landscape, many operators are deeply considering diversifying their offering on property to retain an edge over the competition. More and more, operators are exploring the potential of options geared towards mobile, social or skill. While seeking to create pathways to bring changes into the brick and mortar fold, many operators are questioning the type of facility they should have, content mix, and overall deployment message of the product.
Why the need to diversify?
According to the Las Vegas Convention and Visitors Authority, from 2014-15 only 63% of millennials who visited the city actually engaged in gambling. This is in contrast to 78% for those aged 51 to 69, and 87% for those aged 70-90. The numbers illustrated a worrying fact of life for casinos; both the current millennial generation and those following after are no longer spending their money gambling on the casino floor, as their parents and grandparents are wont to do. While millennials still enjoy visiting Las Vegas, they see it more as a city of entertainment, and are increasingly choosing to spend their dollars in restaurants, clubs and bars up and down The Strip. This can be seen by looking at the numbers; according to the University of Las Vegas Centre for Gaming Research, gaming industry revenue in Nevada has declined by an astonishing 254% percent between the years 1984 and 2013.
Part of this change is the fact that millennials are the first generation that were born into and grew up with smartphones, advanced technology and interactive gaming experiences. This had led to a demographic that is less interested in traditional casino floor products, such as mechanical reel slot machines, but more interested in new and exciting skill or pseudo skill experiences. With other game engagement formats gaining traction amongst millennials, the industry has several new categories of players to engage with. For example, sports fanatics now have the attraction of Daily Fantasy Sports (DFS) companies such as Draftkings and FanDuel, which exploded in popularity and entered the mainstream over the last two years, and today comprise a billion dollar industry. Gamers are attracted by the Esports (Electronic Sports) industry, which provides an example of the attraction and spending power of this demographic. The global betting market for ESports is estimated around $60 million, while the industry at a whole is valued at around $1bn. Furthermore, according to ESPN, more than half of American ESports fans are employed full time, 44% are parents and around 40% are women. In addition, over 70% are under the age of 35. In summary, this next generation is a desirable demographic; young, professional and with money to spend in the gaming industry.
Examples of change
Across the country, casinos have started to implement a whole raft of changes as they experiment with different way to attract current and future younger generations to their properties. In Rhode Island, Twin River Casino has uninstalled 274 slot machines to make room for more live poker, table games and MMA (Mixed Martial Arts). Wynn (Encore) has installed a new millennial centric area with digital game tables as well as traditional shuffle board tables. Other casinos have gone so far as to build tattoo parlours. Yet while casinos across the country engage in a scattergun approach to find the silver bullet to solve the millennial equation, it is important not to forget what made them successful in the first place. Today, around 70% of casino revenues in the US come from slot machines, and in certain states this can peak as high as 90%. While attracting the gamblers of tomorrow is undoubtedly important, changes aimed towards this end should not abandon too quickly the traditional and dependable gambling patron base.
Symbiosis for the future
The issue that will primarily define the relationship between a company like GAN and its casino partners is how well they can perfect the symbiotic relationship between the product on the casino floor and the product that is offered online. A seamless relationship between the casino floor and online and mobile is key moving into the future. At the moment with offerings like the GAN product, integration between a brick-and-mortar loyalty program and online offering is already happening. Considering the ever-growing online footprint of millennials and casino patrons as a whole, these kinds of integrations are the key to migrating people from online to on-property and vice versa. Recognising this trend is important. Rather than seeing an online product as just a small part of the casino offering, they should recognise that it will continue to grow exponentially- albeit potentially slowly-especially if there’s any movement towards legalising real money online gambling states like Pennsylvania in the near future. To properly plan for the future it is important to stop seeing the online and offline spaces as separate entities- they are symbiotic and mutually important, and the importance of refining and capitalizing on that relationship will separate the most successful casinos from the rest of the pack in the years ahead.
London | June 29, 2020: GAN Limited (the “Company” or “GAN”) (NASDAQ: GAN), a leading business-to-business supplier of internet gambling software-as-a-service solutions primarily to the U.S. land-based casino industry, today announced that the Company has been added to the Russell 2000®, Russell 3000® and Russell Microcap® Indexes, effective after the U.S. markets open on Monday, June 29, 2020, as part of the 2020 Russell U.S. Indexes reconstitution.Read Full Article
London | June 17, 2020: GAN Limited (the “Company” or “GAN”) (NASDAQ: GAN), a leading business-to-business supplier of internet gambling software-as-a-service solutions primarily to the U.S. land-based casino industry, today updated the market following the publication on June 16, 2020, by the Pennsylvania Gaming Control Board (“PGCB”) of historical Internet gaming and Internet sports betting financial information for the State of Pennsylvania during the calendar month of May 2020.Read Full Article