Although it sometimes appears like Generation X is the target of every Strip casino’s marketing campaign, it is the aging baby boomer generation that will fuel the expansion of U.S. casinos, according to a Deutsche Bank market analyst.
"As the baby boomer generation moves from the 45-to-59 age range to the 50-to-65 range, they have more time and more disposable income," said analyst Andrew Zarnett at the recent East Coast Gaming Congress. "We believe that they will spend that time and money on leisure travel and leisure activity."
Demographics reinforce the impact of baby boomers on casinos, though recent statistics reveal the average age of casino customers is dropping.
In Las Vegas, 72 percent of visitors in 2004 said they were 40 years old or older, down from 75 percent in 2003. In addition, the average age dropped from 50.2 years in 2003 to 49 years last year, according to the Las Vegas Convention and Visitors AuthoriConvention and Visitors Authority (LVCVA) annual visitor profile.
At the national level, casino customers were slightly younger. According to the American Gaming Association’s (AGA) annual State of the States Survey, the average casino customer in 2004 was 46 years old, down from 48 years in 2003. The median age for the entire U.S. population is 45 years, the survey said.
Casino customers also tend to have a higher income than the rest of Americans — about 17 percent more, according to the AGA survey. Specifically, the average income of the U.S. casino customer last year was $55,322, while the median household income of all Americans was $47,270.
Analyst Zarnett said Las Vegas casinos should continue to enjoy increasing revenues, a trend that began early this year. He added, however, that Atlantic City casinos might be looking at a flattening or slight downturn in revenue, especially if Pennsylvania legalizes slots and other forms of gambling.
The implementation of gambling in Pennsylvania could take years, Zarnett said, which gives Atlantic City casinos a chance to upgrade their operations and thus become more competitive.
"Borgata has been a great influence, forcing competitors to renovate and expand, and to make this a bigger market with more non-gaming attractions and a more diverse audience," Zarnett said.
In Las Vegas, the locals market is virtually dominated by patrons 50 years of age and older.
"That’s our core audience and most of our facilities, attractions and promotions are geared to that market segment," said a marketing representative with Station Casinos. "Of course, we have the facilities for the younger set — the bowling alleys, movie theaters, Irish pubs and the like — but in the casino, the boomers are king."