What Casino Environment Is The Right Environment For Skill-Based Games?

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Eden Garden biodome
It wasn’t as expansive as the booths for IGT or Konami, but GameCo’s booth stood out from the crowd at G2E.

As seen in the pictures above, the GameCo booth was part of the larger G2E floor, but at the same time, it was also its own detached area. Call it a skill-based biosphere of sorts. A place showcasing the company’s video game gambling machines.

The booth was busy, and people enjoyed the games. Plus, once inside, you no longer felt like you were moving from booth to booth at G2E trying to avoid eye contact with vendors and their hired help selling everything from slot machines to massage chairs. Inside the GameCo booth, you were fully immersed in the GameCo experience.

This detachment is by design.

The conservatism of the casino industry

“The theme of our booth is the casino of the future, now,” said GameCo CEO Blaine Graboyes.

Graboyes appears to be implying the casino industry is behind the times. There is never-ending talk about making the casino floor more appealing to a younger demographic. However, the industry is slow to evolve. Graboyes believes the solutions aren’t in the pipeline. Rather, they already exist in the form of GameCo’s skill-based games.

“The slot player is aging, and there’s a need and an opportunity to bring in a younger, newer demographic,” Graboyes said.

In the CEO’s opinion, the games can be integrated with existing products to create incremental revenue — his answer isn’t displacing slots or table games — and pull in younger customers.

The issue is convincing casinos it’s in their best interest to add skill-based games.

Selling casinos on skill-based games

The current benchmark for gaming machines is handle. In other words, how much money players pump into a machine on a daily basis. That metric leaves skill-based games at a severe disadvantage.

According to Graboyes, GameCo generates the same occupancy as slot machines and a higher average wager. The problem is, GameCo games last about 60 seconds. That makes them five to 10 times slower than the typical slot machine.

This is an issue with two solutions: one obvious and one not as obvious.

Solution #1: Increase bet frequency

First, Graboyes said the frequency of bets is something his company is already addressing through a patent-pending solution. It should be ready in the next generation of games.

According to Graboyes, if everything goes to plan, the next generation of GameCo machines will have a faster pace of betting than most slot machines.

Solution #2: Create a new narrative

“It’s about changing the story about what are the benchmarks for these games in the market,” Graboyes said. “The benchmark is bringing in new customers.”

Graboyes went on to say:

“We just finished a report [where] we estimate that the lifetime value of a net new casino gamer is $35,000 – $40,000. That is a massive opportunity for our industry to grow the player base and the revenue opportunity.

“It’s really important to start to look at how are we going to change the decline and stagnancy around gross gaming revenue in general and slot gaming revenue in particular, and right now I don’t see a lot of other products in the market that have the opportunity to do that.

“We want to help the industry continue to move along and build these spaces, attract these customers, and capture that lifetime value.”

A customer realizes that lifetime value through a combination of gaming, entertainment, food and beverage, and more.

As John Phillips, a representative of a PR firm working with GameCo, said during the interview:

“There’s a synthesis of tying all of these things together to create a comprehensive customer experience. It’s not just the skill based games; it’s the whole culture that’s being created around them.

“You can already sort of see ways for cross-promotional marketing opportunities where you got the mixed media, the food and beverage; it’s this whole environment.”

Selling the customer on skill-based games

In addition to convincing casinos, skill-based game developers like GameCo are trying to get the word out to gamers that these products exist. There’s also the challenge of marketing the games to older, more traditional casino customers.

“One of the big things that we’re doing is just engaging with the community,” Graboyes said. “Things like speaking at the event and sharing how our games work.”

This outreach is crucial. When he asks casino customers what they think about skill games, the typical answer is “I don’t know what to think.” Like handing an iPhone to someone whose been using a Motorola flip phone for the past decade, there’s a pretty steep learning curve. Most slot players don’t know what skill-based games are or how they work.

“A big part of it for us is just educating the market,” Graboyes noted.

Educating traditional casino customers

Some solutions GameCo is trying include:

  • Showing the odds of each outcome on the pay-table.
  • Creating easy-to-navigate help files, so players understand how the games work.
  • Displaying the math behind its games on its website.

As Graboyes put it:

“The more that we explain, the more that we align the player’s mental model with how the games actually work, the better the games are going to perform, the better for the casino, the better for patron, and we address this responsible gaming and problem gambling issue.”

Because of the skill-based gaming industry’s nascency, there’s a lot of trial and error.

GameCo is constantly tinkering with every aspect of the games. Testing includes trying out bench-seating and bar top games to swapping out one game for another to see which performs better.

“Slot machines are 120 years old; they are perfectly optimized,” Graboyes said. “We’re the first company to do this, and it’s only been a year. We need to test and learn and optimize. So we’re constantly iterating and making agile changes to the game. The things we learn we’re able to quickly incorporate into the gameplay.”

Will a casino be willing to commit to skill-based games?

A number of casinos are giving skill-based games a shot on their floors. Graboyes said GameCo currently has 60 machines on casino floors. That is a number he expects to rise to 250 by the end of the year too.

That being said, none of the casinos are showing a strong commitment to skill-based games at this time. Casinos understandably want the games to prove themselves before they dedicate resources to marketing.

In true catch-22 fashion, that might not be possible though, that is, until a casino commits and creates the right environment for the games to thrive.

Photo by Anna Jastrzebska / Shutterstock.com

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Steve Ruddock

About

Steve Ruddock is an avid poker player and a veteran member of the gaming media. His primary focus is on the regulated US online casino and poker markets. He writes for numerous online and print publications, including OnlinePokerReport.com, USPoker.com, and USA Today.

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