Casino operators in Atlantic City were facing a difficult time in 2016 as the city was on the brink of bankruptcy, the casino industry was facing out of state competition and their usual patrons were spending less at their facilities due to a sluggish economy. Casino operators were looking at different marketing strategies and promotions to try and revive their business and one of those methods was to attract the elusive millennial generation to their properties.
Caesars Experiments With Skill-Based Games
Caesars Atlantic City decided that one of the ways to attraction millennials to their properties was to introduce skill-based games as research had proven that millennials did not favor traditional gaming such as slot machines but wanted something more challenging and appealing. The company teamed up with GameCo, a skill-based software developer and decided to introduce a total of 21 skill-based games at three of its properties.
GameCo introduced skill-based machines that were similar to slot machines at Bally’s Atlantic City, Caesars and Harrah’s Resort in November 2016. At that time, Blaine Graboyes, co-founder of GameCo was very excited to team up with Caesars and expected their skill-based machines to provide Caesars with a much needed boost.
Experiment Does Not Have Success
However six months have passed since those skill-based machines were introduced but they did not have the impact that Caesars or GameCo expected. Today there are no skill-based machines at the three properties because they were not attracting a lot of players and Caesars was forced to remove them because they were not generating sufficient revenue to even meet vendor fees.
The senior vice president of gaming enterprise for Caesars Entertainment Melissa Price stated that when the company decided to partner with GameCo and introduced skill-based games they realized they were experimenting and testing the market. Price said that the experiment had interesting results because for one they realized that it was difficult for their patrons to identify the 21 skill-based games amongst the 1500 slot machines on the gaming floors. Often times, players who were interested in skill-based games would walk past the skill-based machines simply because they were unable to figure out the different between skill-based and traditional slot machines.
Lessons Learned
The experiment was a success in some ways because Price stated that their data shows that 71 percent of gaming on these skill-based machines was from millennials who are classified as being born during 1980 to 2000. Price stated that millennials accounted for just 8 percent of revenue from Caesars slot machines and 24 percent from table games. The fact that millennials preferred skill-based games has shown that they do have a place in Atlantic City’s casino industry and Caesars remains committed to these skill-based games.
Millennials Hold The Key
Casino operators have tried different experiments in the last couple of years to bring in more millennials as they realize that this is a lucrative market segment that can generate significant revenue for the casinos if they are able to bring them in. U.S Census data show that millennials number 75.4 million, making them the largest generation in the country and one with a spending power of more than $2.5 trillion.
While Caesars decided to pull skill-based machines from their gaming floors, Tropicana Atlantic City has continued its experiment with skill-based games and currently has three games on its casino floor along with Slots in the Quarter. There is no information as of now as to how successful the skill-based games at the Tropicana have turned out to be.
Skill-based games have similar traits to slot machines because the payout percentage is around 83 cents on the dollar which is generally what slot machines payout. However they are unique because winning is not based on luck or chance but on the skills of each player. This is what millennials are looking for as they want to test their skills and push themselves to a new level.
GameCo believes in its skill-based games and its ability to bring in the millennials and Graboyes has stated that there were no hard feelings with Caesars due to the fact that they pulled all 21 skill-based games out. Graboys stated that the company was still working with Caesars to develop skill-based games that would be a success at the casinos.