Is the Casino Industry Creating the Non-Gaming Millennial?
Updated: Apr 18
Over the past few years, it has often been heard at casino conferences and written in magazine articles, "the younger generation doesn't gamble," or "we need skill-based games to attract the younger generation," or "slot machines and table games are not interesting to the younger generation."
Over the past few years, with the addition and rise of resort fees, parking fees, price of food and beverages, price of entertainment, etc. in Las Vegas and other casinos around the country, it seems as though the casinos are creating the non-gamer. This is not to say that skill-based gaming doesn't appeal to some or should not be a mix of gaming offerings on the casino floor but is not the complete answer to appeal gaming to younger generations. By the time a younger visitor to a casino and is on a budget gets done paying for fees and higher prices associated with their visit, they don't have it in their budget to gamble.
A family member and her husband, in their early 20's, came to Las Vegas recently for a 3-night vacation. This was their first visit. They got a good deal on a nightly rate if they listened to a timeshare sales pitch. (Which if some of you have sat through is 2 hours of your life you will never get back). In small print on the reservation, it stated "plus resort fee and taxes" but didn't state the amount. The resort fee was $120. Dinner the first night at the buffet was about $30 more than what they had budgeted. They wanted to go to a nightclub so they could tell their friends they went to one while in Las Vegas. It was ladies' night, so women got free cover charge. For men, it was $75 cover! Needless to say, she went in and her husband and I waited on the casino floor. She came out 20 minutes later after spending $26 on an 8 oz vodka (well) and soda. Overall, they were about $200 over what they had budgeted for the entire trip, and it was only the first night. They still had not gambled and still had 3 more days in Las Vegas. They wanted to play blackjack while they were in Las Vegas. The game appealed to them. They like playing the game. But they didn't have any money left in their budget to gamble. As they also observed, table limits at a few of the casinos they visited were higher than what they expected.
It's not just the customers feeling the impact on their wallet with the continuing higher prices. The bartenders and waitstaff are feeling it too. The tips are lower than they used to be since customers are spending the money on the price of food and drink and not tipping as much as they used to. One bartender, at a location on the strip, told us he can't comp a drink until the machine generates a ticket and can be redeemed for a drink, which he told us it equates to $30 cycled in the machine to get the ticket for a comp drink. He said most every customer gets mad at him. As he said it is not like a few years ago, where a customer would put money in the machine, and you could comp a drink and build a relationship with the customers. "The more you got to know the customer, the more they were willing to sit and play and the better the customer would tip." Those days are gone. There are some gaming jurisdictions that cannot comp certain amenities such as alcohol. But casinos that can't comp alcohol keep the price high on drinks and amenities trying to get the top dollar a customer will pay.
Some of us will be showing our age in this business but can remember when food & beverage and other amenities were considered a loss leader. That didn't mean that there was no money being made on food & beverage and other amenities. It meant keeping costs and prices lower in some areas in the casino and making up for it on the casino floor. Back when a customer spending money on the casino floor would be taken care of in other areas of the casino. Recently, a couple that are top card holders and high-end players at the casino told me they were not getting the offers they used to in the past. One of the offers they used to receive was a comp dinner at the steakhouse once a month to be used during the week (slowest part of the week). Their host told them that the qualification levels had changed. Being players and having some understanding of slot machines and hold percentages, they figured it up and calculated they would have to spend an additional $5,000 per month to qualify for the dinner offer. As they stated, it would be cheaper to buy the dinner than try to obtain the new qualification levels. Never underestimate a player's understanding of casino math.
This is an old concept that some people today think was a myth.... customers would play at the casino over a period or play big on a certain day or weekend and depending on how much the customer played, the casino would provide comps for dinners and / or tickets to a show or to the nightclub. The play of the customer was based on observation of money spent and how often the customer would be seen in the casino. The comps would come directly from the General Manager, Pit Boss, or host, making it a personal invite. Not too long, how much money a customer spent gambling started getting stored into a computer. So, the casino could look back on a customer's play and base how much they would give back to the customer in comps and offers. Then larger casino companies started calculating algorithms on customers play and before too long, customers had to be at a certain precise level before they could get any tickets to a show or admission into a nightclub and / or a dinner. The offers started being mailed and not being personable anymore. Recently a casino said they couldn't fill the VIP seats for a nationally known musical act at the casino on a Saturday night. I asked if the players were not interested in the show. I was told by the player development department that they had criteria for the players and didn't have enough players at the level. One host had 8 players that were just a few dollars away from the criteria. This should be no questions asked and get them into the show. Criteria should be a suggestion, not a hard line.
Walking through some casinos today, slot machines and table games are being removed, creating empty space on the casino floor. At the same time, a lot of money is being spent on nightclubs and showrooms. So, the argument continues, "The younger generations don't want to gamble, they want the nightclubs and the concerts!" There are some nightclubs that are leased space at the casino and do not have an agreement with the casino to allow comps into or for drinks at the nightclub. Or concerts in the showroom maybe a 4-wall agreement that does not allow comp tickets to the show (even though the agreement with the casino tickets could be purchased from the concert promoter and still comp them to the player... another topic for another article). Instead of trying to get the top dollar in cover charges, drink prices and show tickets, promote gaming and rewards on the gaming floor. Let the customers know that their play will be rewarded and not at high out of reach criteria levels. Its basic player service fundamentals. As a commercial campaign, that ran a few years ago stated, "When did a bottle of booze become a mortgage payment?" "...buffets that became more like ultra-lounges" "... A pool chair became a privilege" "...everyone forgot about fun." "A really fun getaway turned into some sort of haughty gaudy ego trip." "... even Liberace would be blushing at this hot mess." These quotes from the commercial wouldn't be so funny if they were not so true.
Casino floors need to advance, and skill-based gaming has a place on the casino floor. But it is not the complete answer to bring younger generations to the casino. Having the chance to win always has the appeal to the casino customer, no matter the age. As many of us heard from the late Mike Meczka, "It's the gambling, Stupid!" The casino customer will always want a chance to win. The only way to give them a chance to win is to leave them some money in their wallet to spend on the casino floor. Don't make the pricing around the amenities and offerings unreasonable. Put "fees" in the pricing and not in the small print. One of the best quotes ever on player service came from the late Benny Binion, "People want good whiskey, CHEAP, good food, CHEAP, and a square gamble... Make the little man feel like a big man." A lot of money could be saved on researching and studying the younger generations by just following these simple words.