Earlier today, a colleague sent me a link to an article on The Motley Fool, written by Jeff Hwang, entitled The Millennial Problem: Why We (Don’t) Gamble.
One of the questions asked a great deal at last week’s Global Gaming Expo (G2E) was regarding the millennials (Generation X from 1980 to early 2000’s) and how to get them into the casinos to play. As a father of one of these millennials, I get a lot of first–hand input on this topic.
This article covered a lot of the same points my son makes regarding what it would take to get his generation into the casino to play.
Mr. Hwang did an excellent job of presenting some of the issues. There was one line in his column that stood out in my mind. He discusses how gaming in Las Vegas has been on an overall decline and puts the cause as less favorable paybacks over the last several years.
His overall conclusion is essentially that players can find better places to gamble closer to home. This is not to say he feels Las Vegas is doomed, but rather people come here for all the city has to offer and not necessarily the gambling.
As I read this line, my first reaction was “no way.” Las Vegas is Video Poker Heaven, how could it not be the best place in the country to gamble? Of course, my father gave Las Vegas that moniker about 20 years ago. A lot can change in 20 years. So, I gave it a bit more thought. Is Las Vegas still the best place to gamble in the country?
As I thought about it, I was no longer so sure.
The article brought up a few valid points and some pointed statistics. Slot payback has decreased steadily over the past decade. At the same time, the number of spins per hour has nearly doubled. The net result to the player is more money lost faster.
In the video poker arena, it has gotten harder and harder to find 100%-plus games, which were never in abundance on the Strip anyhow. Finding even full-pay machines on the Strip has gotten harder.
Then it hit me. “On the Strip.” Let’s face it. Most visitors to Las Vegas spend their time there, which has never really been “Heaven” for gamblers – at least not advantage gamblers.
Some 10-20 years ago, many Strip casinos switched to paying 6-to-5 on blackjack from 3-to-2. Players were getting better and the hold on tables was shrinking. Turning games to 6-to-5 completely eliminated the counters as well, as they can not overcome the extra house advantage game.
A 3-to-2 game can have a house advantage of a measly 0.5%. This nearly triples to 1.9% on a 6-to-5 game. Of course, when the continuous shufflers came out, which also eliminated counters, the payout did not return to 3-to-2. But 3-to-2 did not become a nationwide standard. It didn’t even become a Las Vegas standard.
The downtown and local casinos off the Strip are still almost entirely 3-to-2, but this isn’t where most of the tourists go to play. Over the past 10-plus years slot and video poker machines and blackjack have all gotten a little worse for the player in the major tourist area of Las Vegas.
Another major change is the proliferation of all the proprietary table games. For the most part, these games have lower paybacks than blackjack or require significantly more units as an average wager. In blackjack, you wager about 1.14 units per hand.
So, a $10 table is really an $11.40 average wager table. But, a $10 Three Card Poker is really a $16.67 average wager table and that doesn’t include Pair Plus and/or the 6-Card Bonus Sidebet. Despite all this, these games have been one of the bright spots of growth in the casino market.
This would seem to throw a wrench into the argument that it’s all about the payback. Playing most proprietary games will cost you more money than playing blackjack, baccarat or Pai Gow poker. Yet, they are more popular.
Perhaps, the lesson to be learned is most gamblers recognize all games have a house advantage. There are limits to how quickly they are willing to lose money, which can lead to reduced play. But if you increase the fun factor, which I believe many of these newer table games have done, players are more apt to accept a higher loss rate.
I use the term loss rate because many of these new games have higher payback but also higher average wagers. The two combined determine how much money a player will lose on average per hand.
That brings me back to the original topic, how to get millennials into the casino and playing. It is fairly clear we cannot simply do what we did with prior generations. We need to ask them what they want and do our best to deliver it. They want to play the way they like, not as their parents do! It’s like that old car commercial: It can’t be your father’s Oldsmobile.
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Elliot Frome is a second generation gaming analyst and author. His math credits include Ultimate Texas Hold’em, Mississippi Stud, House Money and many other games. His website is www.gambatria.com. Email: [email protected].