Three Ways Casinos are Gambling on Technology
The traditional casino wants somebody to sit down in front of a slot machine and be at that slot machine for hours, because the profit margin on slot machines is as much as 60 percent, writes Drew Harwell in the Washington Post. But a generation of Millennials raised on smartphone games and the Xbox thinks slot machines are boring and for old people, and casinos are using technology to try to change their minds.
Existing casino games are missing many of the attributes of social gaming—the sorts of things we’re seeing right now in Pokemon Go. “The things like achievement, and advancing through levels, multiple ways to win with virtual coins and power-ups… Those kind of things are lacking in the casino game today,” Caesars Executive Vice President Melissa Price tells Frank Legato of Global Gaming Business. “There has to be the opportunity for people to have the option to address technology as they address it in their leisure time. And comfortable chairs! I don’t sit in an upright chair at my house.”
Gambling Meccas are feeling the pinch. Studies indicate that while visitors to Las Vegas are becoming younger—the average age has dropped from 50 to 45 since 2009—the percentage of visitors who gamble has also dropped, from 83 percent in 2009 to 71 percent in 2013, Harwell writes. This also lowers revenues for the 23 states that depend on taxes raised by the casinos, writes Elaine Povich for Stateline.
“The simple fact is that Millennials are smarter, more experienced, and more knowledgeable about both gambling and gambling strategy than any generation to come before us,” writes Jeff Hwang in the Motley Fool, noting that he was born in 1981. “We already had a wealth of knowledge available to us, as well as access to more computing power than ever before. We also had unprecedented access to legalized land-based gaming, as well as online gaming.”
Certainly, Millennials seem willing to invest in games in general. Online social casino options generated $3.5 billion in 2015, beating estimates of $3.4 billion. Moreover, that figure is expected to increase to $4.4 billion by 2017, writes Terry Davis in Casino News Daily.
Here are some ways that casinos are leveraging technology to attract millennials—and improve general operations.
Big data. In many ways, casinos pioneered the use of big data. “A casino will collect data on its patrons with the use of a loyalty card. In additional to your personal information, casinos collect such things as the amount of money you spend, times and dates you visit the location, and even your favorite slot machines,” writes Mike Wood in business.com. “If the marketing department wants to target people who have not been to the casino in a while, it can analyze the data it has to determine people who have not played at the casino in ‘X’ amount of months. It can then target that group for people who spend an average of $200 each visit. Then it drops a mail offer such as ‘$100 in free play’ to come to the casino on a specific date.” Casinos also use big data to determine where to place slot machines.
Online gaming is using big data as well. Streaming data following how people are playing a game lets developers literally change the game almost in real time, according to Jack Gudenkauf, Vice President of Big Data at Playtika in Santa Monica, Calif.
Big data can also be used for security in casinos. “Casinos maintain massive databases of information on transactions, cheaters, employees and other ‘people of interest,’” writes Brad Chacos for Gizmodo. Software scans those databases and recognizes relationships that may not be obvious at first glance. One example may be recognizing that the John Smith applying for a job as a blackjack dealer is actually Johan Schmied, the notorious German blackjack scammer, he writes. “It can also detect relationships between multiple people by identifying similar data in their backgrounds,” he adds, such as pointing out that two players belonged to the same fraternity at UNLV in 1987, or that the dealer and a hot-handed player used to share the same address and phone number—and they were both arrested for the same fraud case in 1994. The technology is so successful that the Department of Homeland Security is now using it.
“Technology has improved our ability to track our customers and our employees,” Steve Wynn, developer of Las Vegas casinos such as the Golden Nugget and The Mirage, told attendees at the recent 16th International Conference on Gambling and Risk Taking in Las Vegas. And the University of Nevada-Las Vegas is asking for $500,000 from the state to help it establish an Institute for Big Data.
Enterprise content management (ECM). Casinos may be glamorous and glitzy, but ultimately, they’re still a business. And as such, casino back-office operations such as human resources, accounting, and contracts can take advantage of the same sorts of business process management and enterprise content management software as any business.
Organizations such as the Grand Casino Mille Lacs, Grand Casino Hinckley and Mille Lacs Corporate Ventures headquarters have taken advantage of electronic documents to streamline business processes and reduce the costs and logistics of managing 45,000 pieces of paper a year.
“One of the biggest issues was accurately keeping track of documents,” Lance Dutcher, business solutions architect for Minokaw Technologies—a division of Mille Lacs Corporate Ventures, which operates the casinos and other non-gaming businesses—tells Indian Gaming World. “With the amount of people needing to review and approve contracts, documents would get lost in the shuffle during the approval process. That led to multiple copies being routed for approval to different desks, which ultimately led to an increased workload for everyone.”
Virtual reality. Millennials may also be interested in gaming systems built around virtual reality, Davis writes. The El Dorado Reno, for example, has created Worlds of the Eldorado, which took two years to develop and features “high-end 3D graphics, massive on-screen touch interactivity, super high resolution 4K pixel clarity, professional music, sound, and audio effects, and an all-encompassing super panoramic wide screen cinematic gaming experience,” according to the developer of the system. “Each time you engage in Worlds, you will be greeted by your own personal dragon, who will be your concierge throughout this adventure and grow from infancy to adulthood as you collect precious gems that lead you to FreePlay and Adventure Parties featuring Tournaments and Car Giveaways,” the casino describes.
People don’t always think of casinos in the context of IT, but in many ways, they can be the bellwether for the industry—and that includes their use of technology. They show that taking advantage of business operations functions such as big data and ECM, and using technologies such as virtual reality and social to encourage people to use the applications, is a good bet.
