Bust of the baby boom coming

Feb 5, 2007 4:18 AM

A demographic shift is coming to Colorado casinos. For those of you who read my column consistently, you know that I often rib the elderly populace. Why? I could probably beat most of them in a fair one-on-one fight (no walkers or oxygen tanks allowed).

Like all bullies, I am jealous of the fact that not only do these folks get a check every month for not perishing before the age of 65, but also they get discounts on everything from movies to coffee at Mickey-Ds. Damn!

They get a check every month until they die! Sure, they may have considerable resources from squirreling away money over the years through careful investment and savings, but a check every month, come on!

Of course, I an outraged only in jest, but the current baby boomer generation is expected to be the wealthiest population segment in American history. Some economists estimate that those born between the end of WWII and the birth of the Beatles, control (up to) 72% of national assets. Of the approximate 77,000,000 baby boomers, 51% are female. Many of these women are hovering age-wise around the marketing sweet spot (e.g., the 61 year-old woman slot player with discretionary funds).

One source of this generation’s wealth is inheritance. The parents of the baby boomers were survivors of the Great Depression. As a result of having seen a period of genuine national destitution, the parent generation was seemingly hard wired not be spendthrifts.

Instead of living in constant debt as the latter generations, the Brokaw "Greatest Generation" did with less, were resourceful, and saved like fiends for a proverbial rainy day. The demise of this group has fed through inheritances the largest transfer of generational wealth ever.

Thus, one explanation for the seemingly never ending increase in gaming expenditure and subsequent gaming revenue is that the money currently being pumped into slot machines was actually earned in the 1950s and 1960s.

Cripple Creek, Black Hawk, and Central City casinos must prepare business plans to accommodate for the diminishing equity of this group as such macro-economic matters as pensions being cut, health care costs rising, and longer term family dependence will slice into what is now viewed by casino owners and management as ample discretionary income.

What the gaming industry has witnessed in Colorado and other long term established gaming markets may have been the Golden Years of gaming income potential. As the graying populace now has less earning power and the economic future is not as certain, fiscal realities of gaming operations will need to be adjusted.

(Founded in 1996, Yarborough Planning, LLC partners with select clientele to better understand and address business process issues. Core competencies include training, providing reliable and valid research, strategic / analytic marketing, and accountable Customer Relationship Management (CRM) development and implementation. David Paster is accepting new clients and may be reached at (702) 813-5062 or [email protected])