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Young Money

Casinos try to cash in on their youngest demographic

Young Money

21 to 35.

No, it’s not the score of a random football game from this past season; it is the age demographic that domestic casino operators are constantly trying to attract to their properties, from California to Connecticut and everywhere in between.

Despite these efforts, this “millennial” demographic has yet to take up gaming consistently en masse, opting for nightlife, pool parties and other casino attractions and entertainment.

Why is this?

Have casinos been too slow to adopt digital and social communication methods to this generation? Are the nightclubs soaking up all of the disposable income from young adults? Are manufacturers not producing games to attract this demographic?

Or is this just a natural trend among young people and casinos, regardless of the generation?

A Different Demographic

The Great Recession. Social media. Casinos located in over half of the United States.

The much-desired 21-to-35 age demographic has faced a distinct set of economic, communication and market variables completely different than any previous group of young Americans in our history.

“This demographic has less disposable income and is often saddled with student loans, so gaming is not a priority because they do not have the time or money to be gaming customers,” says Mike Meczka, principal of Meczka Marketing Research and Consulting, a full-service market research company. “Casinos are trying to gain extra revenue by providing the nightclub atmosphere or with pool events, but that is usually the extent of it. Often there just aren’t the programs there for the 21-to-35-year-old because of the limited disposable income.”

According to Meczka’s research, over 90 percent of the U.S. population lives within an hour of a casino. This has brought unprecedented exposure to gaming for the youngest demographic. “Participating in a casino activity or heading to Atlantic City or Las Vegas for your 21st birthday has become a rite of passage, yet the casinos cannot obtain sustained activity due to the time and disposable income restraint,” says Meczka.

Competing for the young demographic is a daily activity for Scott Kreeger, president and chief operating officer for Revel Entertainment, parent of the Revel Casino in Atlantic City. “Today’s younger clientele tend to look more toward socially interactive amenities, and they also maintain a slightly different schedule than the traditional gamer,” says Kreeger. “Modern casino design should effectively blend these nightlife and lounge amenities into the more traditional gaming areas, thus transitioning the overall casino environment into a more contemporary experience.”

It is a strategy Kreeger has implemented with great success at Revel. “We have done an outstanding job of implementing and blending the overall experience into an environment that all players feel comfortable in,” he says. “The net result is that young players feel that the gaming experience matches the energy and excitement that they seek in the nightclub and restaurant scene.”

Through these strategies, Revel Casino has won the battle that many experts feel is at the center of the group’s lack of gaming—a general disinterest in casino play.

“This age demographic is never interested much in casino play, and these young adults are especially not interested in slot machines,” says Randy Fine, principal of The Fine Point Group, a consulting and management company renowned for its expertise in casino operations. “Casinos recognize that young people are not interested, so they build a nightclub to solve the problem, which can generate a great amount of revenue but may not automatically translate into gaming.”

Communication Breakdown

The most obvious reason that nightclubs and lounges have outpaced their casino counterparts in attracting the younger demographic is their use of social media to project an image of a product that is constantly evolving with new entertainment, food and beverage options and promotions.

The “mega” nightclubs and “ultra” lounges in Atlantic City and Las Vegas can rely on the most popular DJs in the world to help lead their social media efforts, but they also use the communication vehicles to broadcast bottle specials, special promotional events, celebrity appearances and pool parties—all which change on a daily basis. This evolving entertainment schedule has more cachet with a younger generation than the stagnant slot machines or a slow-paced keno or bingo game.

It is apparent to all parties that the traditional communication vehicles of direct mail and newspaper and radio advertising are extremely outdated for the young demographic. A benefit of the new social media platforms is that casinos can now reach their audience on a 24/7 schedule, instead of hoping that they see or hear a random advertisement. The younger demographic does not mind receiving information after standard business hours, late-night or even overnight so they can review it when they wake up in the morning.

“The youthful customer is embedded in the digital age and seeks deeply connected and interactive content via ever-changing social channels,” says Kreeger. “At Revel we work to stay on top of trends and join the social conversation. This allows us to interact with our younger guests in a more relevant and timely manner.”

Game On

So what games are attracting the younger demographic? Table games are drawing younger patrons because of their element of social interaction, which is surprising to some experts, but not to others.

“They like poker because they are playing against other people and craps because of the social interaction and fun with strangers,” says Fine. “They are not getting their needs satisfied with a solitary slot machine.”

Once again, Kreeger and Revel have embraced this opportunity with proactive strategies to maximize both the property’s bottom line and the improvement of the experience for guests. “We find that table game offerings satisfy the interactive and social nature of this group, so we have strategically integrated our pits to be part of the club experience,” says Kreeger.

“All of these factors blend well together to create a very high-energy experience. We actually have table games offered in the front of each nightclub venue that integrate bar experiences such as the entrance to Royal Jelly burlesque nightclub.

“In keeping with this strategy, we take a more social and modern approach to our high-end table areas by encouraging public integration of open bars and seating areas with our high-limit rooms. This creates a youthful and energetic experience that even our traditional gamers find attractive.”

Outside of the traditional games found at casinos, many experts believe that the introduction and expansion of online gaming is the missing product that will capture the young demographic and convert them into valuable players for the rest of their active adult lives. “There is a need to create online games that are similar to the popular video game products the younger players have grown up with,” says Fine. “Imagine what would happen if you had Angry Birds, Grand Theft Auto, John Madden football or Candy Crush available for online gaming for money.”

Fine says to further engage the younger players to slot machines or eventually online gaming, the actual play needs to be more like the play that occurs in the bonus rounds.

“This generation is not interested in watching the spinning slot machine reels for entertainment,” says Fine. “Slot machine developers and gaming companies know the math behind the reel-spinning, and now they need to find a math model for video gaming. It is hard to solve, but it will help them attract a new generation of players.”

Need for Nightlife

The overtures by casinos to the younger demographics of nightclubs has been the great equalizer to their lack of spending on the casino floor. This trend began a little over a decade ago in Las Vegas, and has spread to the Atlantic City, Southern California, Lake Tahoe, Reno, Phoenix and New Orleans markets, along with other cities.

“Nightclubs and the DJ programming of the nightclub are a central attraction,” says Kreeger. “We provide packages which combine hotel stays with nightclub specials and concert tickets. These are the types of combined experience the younger customer is seeking because it fits in well with their seen-and-be-seen desires.”

These desires have added huge profit margins to the casinos’ bottom line, and an even newer revenue stream, “day life” (also known as pool parties), have proven an even more profitable venture than many nightclubs.

“The daytime experience is a great complement to the lineup of world-class DJs and entertainment,” says Kreeger. “As we transition young resort guests into gaming customers, it is important to create loyalty programs which provide benefits based on their slight shifts in purchasing habits. Your incentives need to match customer preferences, which are definitely changing.”

Nightclubs have become the third tier of major revenue for many casinos, joining gaming and hotels. However, Fine is quick to point out, “Other cities do not have an option for Las Vegas-style nightlife, so they have to be more creative with their local entertainment programming to attract the 21-to-35-year-old demographic.”

Sports Book on a Budget

With the Great Recession delaying financial stability for the majority within this younger demographic, identifying the best places within the casino to make their money last longer has an entirely new meaning in added value.

“We offer a lot of value for players age 21 to 35, who do not have a lot of money in their pocket and who have not come close to reaching their earning potential,” says Jay Kornegay, vice president of race and sports operations at LVH (formerly the Las Vegas Hilton), which is widely regarded as the best sports book in the country.

“A $10 bet that can entertain the younger players for three hours is a very attractive situation. There are certain things we try to do to accommodate that age group, from the food items we offer on the menu to the proposition bets we offer on games, to the games we show on television.”

Growing Old with Gaming?

The biggest question yet to be answered regarding the youngest demographic is if they will transition to the traditional games of slot machines, keno and bingo once they grow older like previous generations.

With unprecedented exposure to casinos at a young age due to the expansion of properties across the United States and the popular nightclubs, most experts agree that their casino experience will come full-circle to the traditional games during the second half of their lives. “The reality is that the casino will take the 55-year-old over the 35-year-old every single time because they have both time and disposable income,” says Meczka. “It doesn’t matter what market you are in. The people age 21 to 35 now will go back to casinos as they get older; they will just have a different experience.”

Fine has a different view.

“By the time this age group is 65 years old in at least 30 years from now, the world could be a dramatically different place,” says Fine. “How it changes could definitely affect their playing habits.”

In case this generation doesn’t come full circle and future generations of young players follow their lead, Kreeger is determined that Revel Casino be on the forefront of adjusting programming, personnel and promotions to create loyal lifelong customers.

“The key to integrating the next generation of casino customers is to adapt your strategy towards their habits and preferences instead of exposing them to traditional gaming promotions, which are less relevant to them,” says Kreeger. “We try to cater to these changing preferences by offering a full complement of amenities that allow for a variety of experiences through a typical stay. So far it is working for us, and we are sticking to it.”

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