Millennials favor food and alcohol over gambling

Many millennials do not view gambling as a worthwhile experience. Gaming revenue as a percentage of total revenue on the Las Vegas Strip has fallen to under 37% (was under 35% in 2015) — down from 57.9% in 1985.1 The graph to the right shows that millennials ranked gambling as 21st out of 28. While the top three preferred activities for millennials all involved food and drink. Gambling is not viewed as moral issue for millennials, but a social one. Millennials enjoy experiences that promote greater social interaction and cohesion, while traditional casino spaces and games, especially slot machines, offend these millennial social sensibilities. Less than half of millennials prefer to play slots by themselves, while 70% of non-millennials prefer to play alone.5 The only appealing feature of slots for millennials is the easy access to free drinks.2 The percentage of visitors actually gambling is down while the percent going to nightclubs and other attractions is up. The average age of a Las Vegas Strip visitor dropped from 50 years old in 2009 to 47 in 2016.6

Comparison of Millennials & Non-Millennials:

  1. Gambling was more important to non-millennials (42% to 21%).6
  2. Millennials view drinking activities as more important than non-millennials.6
  3. Millennials reported spending 8.5% of their total budget on gambling compared to 23.5% for non-millennials.6
  4. If money were not a concern 50% of millennials would increase spending on bars and nightclubs compared to 17% of non-millennials.6
  5. 44% of millennials play slot machines compared to 72% of non-millennials.6
  6. 40% of respondents who do not currently play slots would play if there was an element of skill; 38% if they could play in a group.6
  7. 57% of millennials play table games compared to 58% of non-millennials.
  8. Millennials are significantly more likely to extend their stays at resorts for a week or more compared to non-millennials.5

All though there are discrepancies between millennials and non-millennials; there is little evidence in differences between millenials and baby boomers when they were under 35. That is not to say that millennials preferences won’t change.9 It is likely millennials preferences will morph into non-millennials preferences as millenials get older.

Companies percentage of revenue from gaming10

Company 2015 Net Gaming Revenue 2015 Total Net Revenue Gaming / Total
Melco Crown Entertainment $3.77B $3.97B 94.8%
Pinnacle Entertainment 2.05B $2.29B 89.4%
Penn National Gaming 2.50B $2.84B 88.0%
Boyd Gaming 1.85B $2.20B 84.0%
Las Vegas Sands 9.08B $11.69B 77.7%
Wynn Resorts 2.93B $4.08B 71.9%
Caesars Entertainment 5.42B 8.52B 63.6%
MGM Resorts International 5.42B 9.19B 48.7%

Meanwhile, over 75% of MGM’s total net revenue in 2015 came from Las Vegas. In contrast, Las Vegas only accounted for about 14% of Las Vegas Sands’ revenue, with gambling-heavy Macau accounting for the bulk of the rest. Melco Crown at 94.8% looks a lot like Macau.10 This chart can be further explained by understanding that:

1. Thanks to gaming expansion and the Internet, millennials have more access to casino (and other) gambling than any previous generation in American history.7

2. Millennials are more knowledgeable about gambling than any previous generation in American history.10

3. The house advantage has been on the rise, such that the value of a gambling dollar has never been lower. Slot machine hold percentages have increased a combined 14.5% across the nation over the last 10 years while the revenue from the games has grown just 1.1%.8

This is fundamentally why the dominant poker strategy texts of the past decade have been written by guys now in their 30s. There is an entire class of poker players who played millions of hands online before they were old enough to set foot in a casino. In the first eight years since the World Series of Poker introduced the November Nine concept, all eight WSOP Main Event champions and six of the second-place finishers were born after 1980.10

Every article saying millenials are not a fan of gambling presents at least one of four ideas to save the gaming industry:

  1. Online poker and online/mobile gaming
  2. Daily fantasy sports (DFS)
  3. eSports wagering
  4. Skill-based gaming

Poker, DFS, and eSports are games seen as beatable . Thus a gambler’s interest in poker, DFS, and eSports wagering is driven by economics — the player has an incentive to take the time to learn how to play these games at an advanced level by virtue of profit motive.

The player needs to have an incentive to develop the skills. This means that a player who becomes proficient on a new skill-based game must be able to play and lose at a slower rate or even win — than the player would on a comparable skill-less slot machine at the same stakes.10

Technology will also play a key role, as millennials continue to use mobile apps and wearable technology to live their lives. Scott Klososky, who spoke about the digital transformation of gaming at the G2E last year says that casinos need to think more expansively, offering experiences and technology-enabled solutions that millennials have come to expect.

“Imagine walking into a casino and getting a wearable,” Klososky says, “which will allow you to do transactions and track everything you do. It will help create a better customer experience while providing lots of actionable data for casinos.” This data collection could allow gaming resorts to offer more personalized experiences, like special promotions on food and drink or discounts on extended hotel stays.1

Overall, Las Vegas in the eyes of millenials is not a place to go for gambling, it is inconvenient. It is viewed as one of the many activities to do. Las Vegas is appealing because it is extravagant, is a posh lifestyle, there is a limitless amount of shows, alcohol is flowing continuously, and the sexual tension is high.

Thus, if you really want to appeal to millennials, what you really want to do is find a way to deliver gambling value, appeal to intelligent people, and let smart people sell their friends on your propositions.