Atlantic City Casinos Betting on Profits from eSports

Caesars Atlantic City Casino eSports Tournaments

Caesars Atlantic City held its first eSports event in March 2017.

Atlantic City casinos are turning to eSports to lure younger players, hoping millennials will spend their disposable income at the resorts. To do so, they are hosting competitive video game tournaments.

It’s worth noting that Atlantic City casinos are not trying to convert millennial gamers into permanent gambler. Casino management decided that strategy does not work, for a variety of reasons.

Instead, local resorts like Caesars Atlantic City attract millennial age game enthusiasts to their resorts, hoping to sell hotel rooms and refreshments. And while they do not expect most to gamble in the casino’s gaming space, executives hope the gamers enjoy the resort and return at a time when they do want to gamble.

Casinos Hosting Video Game Tournaments

Casinos turned to electronic sports or eSports — the term for video game tournaments — because millennials do not enjoy most traditional forms of gambling. Last year, AC casinos rolled out skill-based slot machines, but Atlantic City went another direction after a lukewarm reception.

Now, local casinos are hosting eSports events, hoping to make money from renting hotel rooms and selling the visitors food and drinks. It might be a grinding way to make a dollar compared to luring high-stakes gamblers who play at a big disadvantage, but it is part of a plan to diversify revenue sources.

Players enjoy the fast-paced action of eSports, while the cinematic quality graphics play well on the casino’s larger-than-life game screens. Esports draw audiences, much like a sporting event, so the casinos bring in crowds like they would for a concert or boxing match. The advantage is eSports are year-round and the millennials are not the typical casino patrons.

Caesars Entertainment Trying to Figure eSports Out

Kevin Ortzman, regional president for Caesars Entertainment’s Atlantic City division, says the transition has not been easy. Ortzman said that casinos still are trying to figure out ways to make eSports profitable. Caesars Atlantic City hosted an eSports tournament in March which drew over 900 audience members, which was considered “encouraging“, but not overwhelming.

Ortzman said to, “Everybody’s still trying to figure out, how do you make this appealing for the consumer and make sense for the business? How do we all profit from this?”

“We certainly experienced a spike in our hospitality offerings – the hotel, food, and beverage side of things. We didn’t see as much on the gambling side, which we weren’t terribly surprised by.”

Searching for Profits from Millennials

Kevin Ortzman says attracting millennials is essential for the economic health of the casino. As the older generation gets older and dies, the mass market of players who enjoy slot machines will leave the casinos. When they do, the casinos need to replace their business with millennial customers.

On the one hand, millennials are the biggest demographic in America anymore. On the other hand, people in the under-35 category have less discretionary income and less free time to visit the casinos. That is a perennial concern with younger gamblers, as the mass of people tend to gain affluence later in life. What makes it more difficult with the younger generation is their seeming dislike of gambling.

Will They Turn Play Casino Games?

David Schwartz of the Center for Gaming Research at the University of Nevada-Las Vegas said, “The big question is whether people who are 40 or 20 now will begin to play casino games as they get older. This isn’t a given.”

Millennials do not like casino games which work strictly as games of chance. They grew up playing video games and smartphone games which required skill and strategy. Also, millennial prefer games in which they can play alongside a group of friends. Solitary slot machines are not their cup of tea, while table games often are not collaborative enough. Finding games that allow single-player and multi-player options are important. Excellent graphics and a bit of simulated violence is also important.

21st Century Economic Woes

Beyond the games themselves, there are socioeconomic questions. Many members of the millennial generation came of age during the Global Recession or its aftermath. Entering the job market during such a time can have a searing effect on one’s attitudes towards spending in general, and especially recreational spending. In a country where wages for middle class workers have not gone up in their adult lifetime, millennials might be more frugal in a casino than the previous couple of generations.

In that case, many members of the younger generation might never see the fun in spending their discretionary money on casino gambling. Of course, “many” opting out of casino gambling still leaves room for many others to become casino gamblers. You’ll find people in any generation with the means and motivation to bet on blackjack or gamble at the poker table. The Atlantic City casinos, like American gaming operations across the United States, want to make the next big demographic as profitable as the Baby Boomers.

Millennial Spending Habits

At the same time, millennials splurge on gourmet coffee, hot meals in restaurants, and clothes they might not need necessarily. They also spend on taxis and Ubers at a much higher rate the Gen X members or Baby Boomers. One study showed that the majority of millennials have $1000 or less in their savings account. That is good news and bad news for casinos. On the one hand, millennials simply do not have the cash to gamble large sums of money at the casino. On the other hand, the fact the demographic doesn’t have a lot of money to spend might mean they like casino games more than the statistics show, but simply don’t have the financial werewithal at the moment to spend on casinos.

If so, then casinos’ attempts to lure millennial gamblers might not work at the moment, but could make inroads in the years to come. Getting the younger generation in the habit of visiting a casino for eSports might pay off in other ways, years down the road.

That might never happen. For now, casinos continue to experiment with ways to attract millennial gamblers. Some experiments will work and some will fail, but trying different approaches is the best strategy. One gets the idea, whatever ends up being the best approach, eSports is going to be a part of the solution for casino execs.