Month: April 2023

As visitors to Las Vegas continue to get younger and more diverse, it appears casino resorts have figured out how to lure their future generation of customers.

The Las Vegas casino industry has faced a lot of questions and concerns in recent years about what will happen as casino patrons age and whether younger patrons would replace them.

The answer to that question so far is yes as Nevada, led by the Las Vegas Strip, posted record gaming revenue in 2021 and again in 2022. The question is, can that continue or will Las Vegas casinos need to evolve more?

Las Vegas began focusing more on increasing revenue streams beyond gaming in the early 1990s with a greater focus on entertainment, food and other amenities such as retail, nightclubs and resort swimming pools.

The average visitor age has steadily come down since then. In 2022, it stood at 40.7, down from 43.2 in 2021, according to the latest visitor profile survey released by the Las Vegas Convention and Visitors Authority (LVCVA).

According to Oliver Lovat, CEO of the Denstone Group, who tracks visitation, the average age of visitors to Las Vegas was as high as 49.2 in 2010.

Millennials – those born between 1981 and 1996 and who were aged 26 to 41 at the time of the survey – made up 48% of the visitors in 2022.

Generation Z – those born between 1997 and 2012 – made up 13% of visitors, higher than the 12% of baby boomers born between 1946 and 1964.

Casinos’ gamble is paying off

In 2010, only 29% of Las Vegas visitors were under 40, Lovat says.

As visitors get younger, they are also more diverse, with Hispanics, Asians and Asian-Americans now making up a greater share of the visitor base. White visitors made up 77% of the total in 2019 before the pandemic. In 2022, that had shrunk to 62%.

Lovat calls the latest survey one of the “most interesting” he’s seen when looking at Las Vegas visitation in the last 20 years. The city is effectively engaging the needs and trends of customers by moving away from cheap rooms and inexpensive buffets, he adds.

“It’s validation for getting it right,” Lovat says of the Las Vegas casino industry. “The casinos took a big gamble five to six years ago on food and beverage and entertainment programming and making more experiential offerings for their customers, and this is paying off.”

“Las Vegas has been the collective beneficiary of very smart moves, particularly by Caesars [Entertainment] and MGM [Resorts International] for not going for the cheapest option but investing in food and beverage and amenities. People have come and rewarded those companies.”

Andrew Klebanow, a principal with C3 Gaming, credits the effectiveness of the LVCVA’s advertising campaigns as well as the increase in the number and quality of the city’s entertainment offerings. One in four Las Vegas visitors were making their first trip to Las Vegas, up from one one in five in 2021.

“Casino operators have also become very adept at moving their customers from casinos in high-tax jurisdictions to their properties in Las Vegas where the gaming tax is the lowest in the nation,” Klebanow says. “Using generous lodging offers, operators have gone deep into their databases and now invite broad swathes of players to visit Las Vegas.”

“That in turn has fuelled an increase in first-time visitors and younger players who make up a growing percentage of their national databases.”

Since the onset of the Covid-19 pandemic in 2019, Lovat says Las Vegas is the place people want to come to do “fun things” with their friends.

“It’s been the outlet where America recovered and that’s evident in food and beverage sales, gaming and [show and sports] ticket sales.

“People aren’t coming to Las Vegas to gamble any more. They are gambling when they’re in Las Vegas. That older generation above 65 that were coming to Las Vegas to gamble are going somewhere else. It’s easier to gamble in so many other places.”

The changing needs of the consumer

Las Vegas is definitely more attractive to unmarried people. Sixteen per cent of visitors in 2018 were single, according to the survey. In 2022, the figure was 35%.

Lovat says Las Vegas has changed its offer to align itself more towards younger people. These days its restaurants, bars, clubs and shows are much more contemporary.

“If you look at who is playing the show rooms, it’s not boomers. It’s Adele and Bruno Mars. It’s fewer Chers and more Lady Gagas.”

The average visitor to Las Vegas spent $527 per visit on food and beverage in 2022, up from $415 in 2019. They spent $310 on shows and entertainment, up from $111 in 2019. Some 37% of visitors went to paid attractions – up from 28% pre-pandemic.

“The increase in food and beverage spending was also significant, reflective in large part on casinos’ pricing strategies,” Klebanow says. “Eating and drinking on the Las Vegas strip is no longer a bargain. Food and beverage pricing is higher than other vacation destinations. Twenty-dollar martinis and $75 steaks are now the norm in this town.”

That fits the narrative of where Las Vegas has trended ever since gaming revenue accounted for 58% of total revenue in 1990, the first full year of The Mirage, the destination set the modern standard.

It was 50-50 in 1998 but non-gaming has trended up to two-thirds of revenue in the 20-plus years since, with the exception of when amenities were shuttered during the pandemic because of social distancing rules.

“Vegas has always adapted to its consumer,” says casino consultant Brendan Bussmann, managing partner of B Global Advisors. “When it relates to that younger consumer, we always want to fill in behind what we already have. Once you experience Vegas once, you are going to come back over and over again because it’s like an experience nobody else can match.”

Appealing to audiences

That doesn’t mean everyone thinks what Las Vegas is doing is enough to attract younger audiences.

The one change casinos need to do to appeal to the younger generations is adopt cashless technology on their gaming floors and across their properties, Lovat says. Casinos have been slow to adopt the emerging technology.

Some have suggested more needs to be done to get younger players to gamble, and that slots won’t cut it for them like they do with baby boomers and older generations. Lovat is among those who disagree with that premise based on the latest stats. The average visitor budgeted $761 for gambling during their trip in 2022. That’s up from $591 in 2019.

According to Bussmann the pandemic introduced younger generations to casino gambling as a “great form of entertainment” when other entertainment options weren’t available.

“Young people don’t gamble when they are young, but the more times they come and get familiar with the casino floor, the more they get familiar with the games,” Lovat says. “It takes the average customer eight times before they become a significant casino player.”

“The evidence suggests that during Covid young people started playing slots, and playing a slot machine now is very different from playing one 15 years ago. It’s more digital and a fun experience. It’s not watching lines go round and round.”

There’s still gambling improvement to be made, according to Josh Swissman, founder of The Strategy Organization. Younger patrons are coming to Las Vegas despite some casinos “not getting it right yet” when it comes to gaming and despite there being no particular gambling game that resonates with them above others. Someday, that could be skill-based gaming or esports wagering, he says.

“It seems like the casino companies have been forcing the new customers to go to the casino floor instead of bringing the games to where these people tend to congregate and spend more of their time,” Swissman says. “That is the fundamental problem with the way these newer gaming floor offerings have been positioned up to this point.”

“When you look at a generation that grew up with the internet, cell phones and rich video gaming experiences and if you continue to have that mentality in the future to capture the Gen Z population and the generation before then, you will find yourself being outgunned by the companies and manufacturers that are thinking of the gaming floor of the future in a completely different way.”

Swissman thinks it can be done. Casinos have got it right with nightclubs and dayclubs, food offerings with social seating and sharing options, and new food halls that provide a variety of cuisines to satisfy a group of friends.

Innovate to accumulate

Corey Padveen, a partner with t2 Marketing International, says passive player income so far has proven to be critical among younger visitors who may be coming for reasons other than to gamble when they have a free moment.

Innovation will be critical to see how slots are able to cater more successfully to younger players, either through customisation or artificial intelligence.

“You are primed for a lot of innovation in the world of slots purely because it is critical to casino revenue and gambling revenue not just in the United States but globally,” Padveen says. “Getting young people to engage in slots is at the top of the list of priorities. Technology and innovation will be huge proponents of that.”

Technology and innovation are already being used to bring in younger visitors and casinos may need to mimic that. Area15 is an experiential retail and entertainment complex west of the Strip with food and beverage offerings. It features interactive art and other attractions.

“Those attractions are squarely targeted at the younger demographic,” Swissman says. “They have a food hall setting and significant nightlife offering. It’s become a confluence of factors that appeal to younger people even though it’s not on the Strip. And there are other paid attraction experiences up and down the Strip whether that’s the Banksy [art exhibit] or others.”

Ongoing recovery

Despite the strong showing in gaming revenue and overall spending, Las Vegas has not fully recovered in its visitation. Its 38.3 million visitors in 2022 was still 8.7% below the 42.5 million in 2019. Overall hotel occupancy reached 79.2% in 2022, down 9.7 points versus 2019.

“The occupancy numbers are down and nobody is concerned,” Lovat says. “It’s not about filling those rooms with cheap customers but getting the right people in the doors who can enjoy and pay for the experiences the casinos are offering. And if they’re not filling the building, they’re providing a better quality of service and better experience. Customers are rewarding them.”

The willingness to pay more in Las Vegas may account for one change in the survey among its customer base. Some 35% of customers in 2022 said they earned more than $100,000, up from 29% in 2019 and 2021.

Padveen says numbers in the survey show how casinos are making their properties bigger attractions so that customers don’t need to leave.

The average visitor went to 4.3 casinos in 2022, down from 5.7 in 2021, and they gambled at 2.2 casinos, down from 3.2 in 2021. That means more revenue staying on properties.

“That tells you that the diversification of offerings on property is improving from food and entertainment,” says Padveen, who cited properties now doing culinary and drinking tours and offering entertainment packages.

“You can take the food and beverage offering by enhancing it and creating comprehensive experiences around it. We’re seeing more and more of that. When you have a group like MGM or Caesars, you can create that across properties so people stay within that brand.”

Padveen says the decrease in age of visitors, the increase in first-time visitors, and the increase in spend on property is critical because gaming isn’t going to be the only reason people come to Las Vegas.

“There was a huge risk of the most lucrative visitor base not returning out of fear of safety from Covid,” he continues. “There was such a huge importance on providing an experience so that millennials and Gen Z could come and create a product offering that extends to every avenue of entertainment while still having a focus on gaming.”

“We saw in 2008 and during Covid that non-gaming revenue is critical to the momentum of growth, and you are seeing that on the individual property level and city as a whole that spells a lot of great potential moving forward. That’s what led to this huge investment in entertainment.”

Sports and entertainment a major pull

The survey points to people coming for an overnight stay or short visits for a concert or an NHL or NFL game and at the $2bn Allegiant Stadium which opened in 2020.

Events at the Allegiant attracted 1.7 million people in 2022, 200,000 of whom paid to see K-pop sensations BTS over four shows. T-Mobile Arena, which opened in 2016 and where the Vegas Golden Knights play home fixtures, also hosts concerts. Las Vegas will host its inaugural F1 Grand Prix in November and the Super Bowl in February 2024.

“There’s no question having T-Mobile in the middle of the city is a huge driver of entertainment,” Padveen says. “I know a lot of people from California who have gone to Vegas for one night with the express purpose of going to a show.”

With the $2bn entertainment arena MSG Sphere opening later this year and F1 rolling into town, Padveen says there’s a diversification of entertainment experiences in the city that will yield huge returns with potential new visitors and visitors who haven’t come in a long time.

“Operators and marketing teams have been working on so many different ways to get these people to come back or come for the first time, and now thanks to the investments in the city and these operators for their efforts, you have offerings in the city as a whole that are going to be unique offerings to drive in people.”

The developer launched in the newly regulated state of Connecticut in the US, as well as both Ontario and Quebec in Canada in 2022, building on its existing presence in major markets including New Jersey, Pennsylvania and Michigan.

North America remained its largest territory for content licensing, with revenue rising by 112.0% year-on-year in the region, and the developer said further regulation of igaming in other states will help drive further growth over the next two years. 

Gaming Realms also expanded its European business with launches in Belgium, Denmark and Spain in FY22, with executive chairman Michael Buckley saying these roll-outs will contribute to the developer’s wider growth plans.

“The distribution of our content has continued to expand on a global level, strengthening our position as a leading supplier of games to the international regulated igaming market,” Buckley said.

“Slingo has also cemented its position as a category in its own right, allowing us to partner with leading games and entertainment brands and immerse them into the Slingo format.

“With a strong pipeline of new partnerships and games set to launch, the outlook for 2023 is encouraging as the Company continues to deliver on its proven strategy.  It is highly likely that additional states within America will commence the process to regulate igaming within the next two years. 

“This process, coupled with the development of other new markets, will lead to increased distribution of group products.”

Full year

Revenue for the 12 months to 31 December reached £18.7m (€21.3m/$23.0m), up 27.2% from £14.7m in the previous year.

Licensing accounted for £14.9m of all revenue, up 34.2% year-on-year, helped launches in a number of new markets. Content licensing revenue stood at £14.3m and brand licensing £600,000.

Meanwhile, social publishing drew £3.7m in revenue, a 2.8% increase on the previous year, while head office revenue amounted to £23,000 for the 12-month period.

Turning to costs, marketing spend was reduced by 70.0% to $113,799 but operational costs were 34.5% higher at $3.9m as a result of expanding into new jurisdictions in both North American and Europe. Administrative expenses were also up 21.5% to $6.9m for the year.

Expenses were higher across both amortisation of intangible assets and the depreciation of property, plant and equipment, but finance costs were lower and finance income increased.

As a result, pre-tax profit rocketed 218.2% year-on-year to £3.5m, while after taking into account £90,355 worth of income tax payments and a positive foreign exchange impact of £131,432, this left a net profit of £3.7m, up 184.6% year-on-year.

In addition, EBITDA increased 45.1% to £7.4m.

Ongoing growth

Gaming Realms also published an update on its performance in 2023, with revenue for the two months to the end of February up 53.0% to £3.7m. The developer went live with 13 new operators and released three new Slingo games.

“2022 was another exceptional year for the group as we continue with our proven strategy of expanding our Slingo portfolio with new titles and entering new igaming jurisdictions alongside our operating partners,” said Mark Segal, who was appointed chief executive in February. 

“Having grown our portfolio of games to 65 through 2022 and launched with 56 new partners for our Slingo Originals content, we are experiencing our games being enjoyed on a global level.

“As we look ahead to 2023, the year is already off to an exciting start with 13 new launches implemented and new Slingo games, such as Slingo Cleopatra and Slingo Golden Envelope, already proving popular amongst fans. 

“With our strong foundation built in 2022 already proving fruitful in 2023, we are excited to continue delivering further game launches, new partner deals and expanding our global footprint even further.”

Alex Kozachenko, chief product officer, talks managed trading systems, risk management, and player protection for maximum esports success.

The government’s much-anticipated white paper on gambling in Britain will reportedly make reference to a blanket 1% fee on all businesses, meaning land-based operators would pay at the same rate as online businesses.

BGC said its industry analysis suggests a blanket 1% statutory levy to land-based operators would be the equivalent of between a 10% and 15% hit on post-tax profits, because of the fixed costs that do not equally apply to online operators, such as rent and staffing expenses.

The organisation also noted how many land-based businesses in Britain are still recovering from the pandemic, as well as rising fixed operating costs and high inflation, and that any additional costs could cause them harm.

While the BGC previously proposed during the review of gambling that RET contributions should be mandatory for the industry, it urged the government to adopt a sliding scale and smaller percentage contributions from land-based gambling businesses that have disproportionately higher fixed costs.

“I have said for some time that I am relaxed about a so-called statutory levy given that the money is already on the table from BGC members, it is already allocated independently of the industry and given that it was the BGC who proposed to government last year that contributions should be mandatory,” BGC chief executive Michael Dugher (pictured) said.

“But we want to see continued sustainable funding for RET provided it recognises the fact land-based operators are under greater cost pressures, so there has to be appropriate mitigation, and that funds continue to be distributed effectively and genuinely independently.

“It is absolutely vital that treatment is available to those sadly suffering with the most serious cases of ‘disordered gambling’, who often have multiple complex health issues and who require treatment in clinics, who represent a minority of the Gambling Commission’s broader definition of the problem gambler cohort. 

“But most importantly, any new system must be tiered to protect land-based operators like bingo, casinos and betting shops, who have disproportionately higher fixed costs because of buildings and tens of thousands of staff. They are still struggling post-covid, like every other retail, hospitality and entertainment business, with all the difficult economic headwinds.

“The government claim they believe in low regulation and low taxes for businesses, so they need to avoid this new tax leading to job losses or more businesses going bust.”

House Bill 551 will make nine racetracks eligible to offer on-site retail sports betting, while each track will also be able to partner with up to three online operators, meaning up to 27 licenses may be issued by the Kentucky Horse Racing Commission (KHRC).

The bill also establishes a two-tier system to taxation, with online operators to be taxed at 14.25% of gross gambling revenue, compared to the 9.75% imposed on the retail offerings.

Read the full story on iGB North America.

The minister for casino, gaming and liquor regulation Melissa Horne issued a direction requiring the casino to update its responsible gambling code of conduct.

Under the new rules, anyone who has gambled for more than 12 hours in a 24-hour period must take a 24-hour break – with individual’s subject to a maximum limit of 36 hours of gambling per week. As such, Crown’s responsible gambling staff will have powers to exclude a customer from the casino floor.

The operator will also be expected to enforce 15-minute breaks if a person has been gambling for more than three continuous hours.

“This direction reflects my expectations that Crown must aim to be a global leader in the reduction of gambling harm – or lose their license,” said Horne

“Crown is on track to implement mandatory pre-commitment in all electronic gaming machines by the end of this year. When combined with the strengthened code of conduct, the harm reduction protections will be world leading for a casino of this size.”

Royal Commission

In a statement the government said that it is continuing to ensure the lessons of Royal Commission into the Casino Operator and License are implemented at Crown.

The Commission – which concluded October 2021 – was scathing in its criticism of what it deemed “illegal, dishonest, unethical and exploitative” behaviour. The report published by the inquiry found that the casino was “unsuitable” to hold a casino licence in Victoria – but decided that Crown should not immediately lose its licence due to concerns about the economic impact of such a measure.

Instead the Commission made a number of recommendations, of which one concerned new safer gambling responsibilities to prevent gambling harm. The government argued that these new measures represent them implementing that item from the report.

Of the 33 recommendations made the report, the government said that 29 have either been fully implemented or legislated and awaiting commencement in the “coming months.”

Additionally, staff at the casino will also be issued new guidance regarding how and when they should interact with a person demonstrating “observable signs” of gambling harm, such as encouraging breaks and sharing harm services.

The government said that the new direction was developed following consultations with a number of key stakeholders including the union, the operator, advocacy groups and harm researchers.

Crown has six months to update its code in accordance with the direction. Any breaches of the code could result in disciplinary action from the regulator, with a maximum penalty of $100m.

New taglines

Horned also issued a second direction to gambling advertisers to replace the “gamble responsibly” taglines on advertisements with new “evidence-based” warnings that aim to be more effective at reducing harm.

Examples given of the new taglines include “chances are, you’re about to lose,” and “You win some. You lose more”.

“Crown has been working collaboratively with the Victorian Government on these world class reforms and once implemented will put Crown on a path to industry best practice by reducing and preventing gambling-related harm,” said Crown CEO Mike Volkert. “We will now work at pace to train our team members and embed the new Code.

“This work builds on our whole-of-company transformation that has been underway for more than 18 months, as we continue to build a Crown that exceeds the expectations of our stakeholders and communities.”

“This includes the implementation of our new and enhanced approach to responsible gambling which aims to bring about a healthier, safer gambling culture for all.”

The network will now be known as the National Gambling Support Network (NGSN).

The renamed service will continue to provide support and act as a resource for those who are suffering from gambling harms. However, GambleAware is also adding a number of new features, including enhanced referral routes and a focus on early intervention.

GambleAware will also implement a regional-first approach to providing treatment.

“As the country’s leading commissioner in this sector, we’re delighted to announce the new National Gambling Support Network and our increase in investment for those experiencing gambling harm,” said Anna Hargrave, chief commissioning officer, GambleAware. “The NGSN is built on strong foundations and brings together a network of excellent regional providers, who are strong agents of change working to meet people’s needs.

“By taking a regional first approach we hope to create new opportunities to work with other local services and government agencies. By broadening our reach at a local level and engaging with local authorities or the criminal justice sector, for example, means we can further help those experiencing harm from gambling.”

Last week, GambleAware announced a £350,000 grant to support research into gambling stigmatisation.

According to the regulator, this reorganisation means the gambling authority will become a “knowledge and information centre” in the fight against match-fixing.

The body will assume responsibility for StopMatchfixing, which is a service which allows individuals anonymously report instances of suspected match-fixing.   

As the secretariat of the of the platform, Spillemyndigheden will coordinate a number of different forums under the platform. The regulator is to be given authority to analyse information about suspicious bets, and pass on information to the relevant national and international authorities and organisations.

“It’s a very important task and a big responsibility that I’m glad we’ve been given,” said Spillemyndigheden director Anders Dorph. “Since we will be getting data on betting on events across operators licensed in Denmark, it makes perfect sense that we are also the ones with the coordinating and unifying function.”

In addition to the regulator’s new coordination and investigative responsibilities, it will also be expected to collaborate internationally with other organisations engaged in similar work abroad.

“We will have a major focus on collaborating with national platforms in other countries,” added Dorph. “It will be completely natural for us, as we have close cooperation with gambling authorities all over the world, and international cooperation is something we already value highly.”

The decision to move the secretariat was a consequence of a February 2022 political agreement among all parliamentary parties in Denmark.

Stuart led the developer’s regional operation since joining the group in January 2022, but will exit as part of an organisational restructure.

Prior to his time with BetMakers, Stuart spent over 11 years at Caesars Entertainment Inc., serving in positions such as head of Caesars Sports & Online Gaming and executive vice president of gaming and interactive entertainment.

Read the full story on iGB North America.

According to the regulator, a Top Sport player using a payment card belonging to another person to deposit €14,965 into his account with the operator.

Lithuanian law states that licensed operators may only accept non-cash deposits from the account of the registered customer and not from third parties.

As such, the Authority said Top Sport was in breach of Article 205, paragraph 1 of the Law on Gambling of the Lithuanian Gambling Act, which relates to licensees only being allowed to take deposits from a customer’s own payment account.

The Authority noted that, as is the case with all regulatory decisions, the ruling was not final and could be subject to appeal.

The latest fine comes after Top Sport in February was fined €25,000 for emailing its customers on 31 August last year with links to and details of its gambling services. This included information about its mobile apps and website.

The Authority said that by informing customers about its offering, this was classed as a form of promotion, which is forbidden in Lithuania, and therefore the operator breached national law.