Millennials turning away from casinos

Although the definition is quite loose, the expression millennial is usually used to mean those who were born between 1980 and the mid-2000s. In many parts of the western hemisphere this group now proportionately makes up the largest generation, accounting for instance in the US for around one third of the country’s spending power, far exceeding the other much sought after visitor category, the now aging baby boomers.

For the Caribbean, millennials are a crucial must-reach tourist segment if the industry and its offering is to have a sustainable economic future.

Typically, millennials are proportionately better educated than previous generations, have grown up with the internet, are value for money conscious, and when it comes to vacations, are higher spending and seeking the authentic and genuine.

It is therefore scarcely surprising that they are giving the gambling industry sleepless nights. According to the gambling and casino industry trade press, they don’t gamble much, do not visit casinos, despite what the glossy industry adverts purport to show, and more generally are looking for a different kind of experience.

What they make clear is hotels in the Caribbean and elsewhere that make casinos a central part of their product and use them as a key revenue source, will have to review what they are offering and how they might in future better relate to the enthusiasms of this higher spending part of the tourist spectrum.

When it comes to games, what millennials are looking for is a form of virtual challenge requiring a degree of skill of the kind they might have experienced first in their childhood playing video games. They also want a fuller experience and immersion, according to an article in the online publication the Motley Fool, published last September written by Jeff Hwang, a writer, investor in gaming, and games inventor, which described in detail why millennials don’t gamble.

Mr Hwang made a number of interesting points. Millennials, he wrote, find the current slot product uninteresting; they want to be engaged and empowered; they require a degree of control over outcomes; they prefer night clubs to casino gambling; and are more interested in online gaming, poker and daily fantasy sports. He also says that millennials are seeking skill-based games, want experiences, need to be social, and demand fairness.

He goes on to argue that what the gambling industry currently offers in the way of returns to gamblers in casinos is low, as for the most part the games that require no or little skill – rows of clients feeding slot machines – give the industry about 60% of its profit.

If millennials are to be attracted to casinos the issue, he suggests, is not about just about new product offerings and better marketing, but lies in developing a product that requires skill and challenge, while offering a commensurate payback rate. This, he observes, is one of the reasons why poker has become so popular.

Mr Hwang believes that typical casino offerings of slots, blackjack, and craps may not have a bright future and that what a traditionally conservative and dated industry has yet to work out is how to offer a fuller more immersive experience, develop skill-based games, and in some way, feed fantasy.

While the gaming industry has been trying to lure millennials in through online gambling and games, this has not been matched by the ways casinos present themselves or the financial return gamblers receive. Statistics from the US gaming industry confirm that there has been a consistent decline in gambling by millennials. One indication of this is Las Vegas where in the 1990s 58% of resort revenues came from gambling, the figure had fallen by 2015 to around 37%, with a visit there being as much an opportunity for nightlife, shopping, and entertainment.

Interestingly for millennials, polls show that the issue of visiting casinos is not a moral one, but a social one with casinos being described as unattractive, empty, and devoid of genuine social interaction. All of which should be scarcely surprising to anyone who has ever stayed in a Caribbean resort with a large casino.

My experience for example in the Bahamas and Puerto Rico, where some properties effectively force you to walk through their vast casinos to reach your room, is of a soulless neon-lit night time. There, tables and machines are located in a somehow dehumanised space, in which even at six in the morning rather sad individuals are giving their money away in a facility unrelated to the natural world, the beauty or sociability of the real Caribbean that exists just hundreds of metres away.

From this you may gather that gambling is not for me on moral and cultural grounds, but I accept that for some, in moderation, it can provide moments of short-lived enjoyment. I also accept that despite the understandable objections of the Church and others, it has provided significant economic value to the Caribbean as a part of its overall offering in some hotels and on cruise ships.

What this new thinking about gaming by millennials suggests, is that in countries from Antigua to Jamaica, where governments are under pressure from developers to allow ever bigger casinos, there needs to be more questions about what will be on offer, how it will be presented, and how gaming facilities relate to encouraging this valuable market segment to visit.