Skill-based gambling machines deserve space on most casino floors, even though the industry is still working out the kinks surrounding them, according to speakers at Innovation in Skill Gaming: Where We’re at and Where It’s Going, a panel discussion held last Thursday at the National Indian Gaming Association’s annual tradeshow in Las Vegas.
“In any industry, if you’re not adaptive, if you’re not trying things, you’re going to miss opportunities,” said Skyelar Perkins, senior director of slot operations at Choctaw Casinos & Resorts of Oklahoma, which operates more than 9,700 machines in 19 properties. “I’m pretty optimistic about skill-based gaming being a part of what we do.”
Perkins acknowledge that skill-based games installed at Choctaw properties “aren’t doing so well yet,” but says he sees potential for growth because the games tend to attract players not interested in traditional slots.
Other panel members were Marcus Yoder, vice president of regulated market and business development for Gamblit Gaming, which produces video game gambling machines;
Blaine Graboyes, co-founder and CEO of Gameco, which developed the first skill-based video gambling machines; and Sherry Kreischer, general manager of Paiute Palace Casino in Bishop, Calif. Roger Gros, publisher of Global Gaming Business magazine, moderated.
Skill-based gaming refers to a type of slot machine in which a player’s ability at, for example, shooting zombies or racing cars determines the payout. Traditional slot machines rely solely on luck and random chance; skill-based games – or video-game gambling, the term Graboyes prefers – can be entirely dependent on skill or can be a hybrid of luck and skill.
Yoder and Graboyes agreed that video-game gambling will not replace traditional slot machines.
Yoder compared the development of casino games with that of smartphone apps. “We don’t know what is really going to hit which demographic, so we need to bring a lot of variants to the market.”
Video-game gambling will have to meet casino expectations – not only how much revenue the new games can generate but the number of games played per hour, the amount of space the machines occupy, and some type of guarantee that they can meet mandates for minimum return to player, which can be 75 percent to 85 percent in various jurisdictions.
Another issue involves where video-game gambling machines should optimally be located within a casino – for example, mixed with traditional slots on the floor, congregated together in an area off the main floor, or in a separate, dedicated lounge.
Perkins said expecting skill-based games to generate the average per-machine revenue of traditional slots is unrealistic at this point. “Take the product for what it is,” he said, suggesting that one generating 75 percent of the floor average would be good.
Kriescher, who oversees a small casino that attracts many senior-citizen players, said operators considering the new games should make sure they know what their customers want. She said two traditional slots could fit in the space needed for one skill-based game.
Graboyes said video games come in several genres, with some appealing to the under-40 crowd and others to players over 40. Core games are those revolving around shooting and fighting; mid-core games may involve racing, sports or classic arcade hits; casual games include puzzles and word games. Gameco makes all three types in video-game gambling machines.
With core games, 60 percent of users are under 40, he said; with casual games, 60 percent are over 40.
Perkins said console and PC gaming accounted for $550 billion last year, more than seven times the $70 billion generated by casinos. While video-game gambling might not be appropriate for every casino, the potential for making money is there.
Video-game gambling is still new enough that its long-term impact can’t be known. “If it’s not working somewhere (else), it doesn’t mean you don’t try it. … We’re trying things to see what works. We’re still in the discovery phase.”
