It’s true that there was a time when slot machines were replacing poker rooms and other games. However, the changing state-of-affairs is alarming, as these machines are now disappearing in full swing. According to recent report by Carlo Santarelli and Danny Valoy, Deutsche Bank analysts, it is known the US casinos are slashing slot machines at a higher rate.
About the Analysis by Deutsche Bank Analysts
The Deutsche Bank analysts did an analysis of 12 most renowned US casinos that are into operation of around 120 properties. These casinos include Red Rock Resorts, Pinnacle Entertainment, Isle of Capri Legacy Assets, Mohegan Tribal Gaming, Penn National Gaming/GLPI, Wynn Resorts, Eldorado Resorts, MGM International Resorts, Las Vegas Sands, Ameristar Legacy Assets, Boyd Gaming & Peninsula Assets and Caesars Entertainment. The report highlighted that these casinos showed a decline of 21% in the slot machines. Since 2007, these casinos have reported a loss of around 43,400 slot machines, which is really shocking.
Reason of Replacement of Slot Machines
The analysts stated that all these 12 casino operators have scrapped their floors by reducing the slot machines. Further, they mentioned that this trend is expected to continue and even grow in the coming future with more casinos slashing their machines. The main reason behind this is that operators are looking forward to make the most of the floors and they are doing this by shifting their financial resources to other attractive amenities. It seems that they have now realized that by adopting other non-gaming sources, they can make better revenues and boost their sales.
Better Profits with Non-gaming Sources
Certainly, the non-gaming margins are much higher than the gaming ones. The biggest example is of Steve Wynn who made a shift to destination resorts and has been earning billions since then. He started off with Mirage resort and then opened Bellagio, Encore and Wynn. It shows that the casinos are changing their marketing strategies and focusing more on giving additional luxurious benefits to the customers. Earlier, such perks were given to allure people towards gaming but now, gaming is being used to attract people to these resorts and hotels.
It has been noted that millennial are ready to spend on four-star hotel and its amenities and prefer gambling at their own convenience. Nowadays, the preference has shifted to online gambling unlike earlier when people enjoyed traveling to land-based casinos. In addition to this, UNLV’s David Schwartz recently stated that the resort rooms are expected to overtake gambling when it comes to profit. Considering the existing trend, the hotel rooms are likely to make same revenue as casino floors by 2019 while the hotels will surpass gambling by the year 2020. Moreover, Las Vegas Strip resorts are expected to make $2 billion from their rooms when compared with gambling by the year 2023.
Fluctuating Gaming Habits
The report has openly stated that the new generation is entirely shirking the slot machines. However, it also made clear that first time visitors to Las Vegas casinos is increasing while there has been a decrease in the average age of visitors. This might also hint at the fact that captivating the attention of millennial is not a big challenge. Casinos can attract them with their enticing bonuses, welcome packages and other benefits.
The Final Verdict
It does not conclude that the gambling will totally be shunned. It is true that casinos are coming up with skill-based slot machines and the only tribal casino operator, Mohegan Tribal is on rise with its gaming product offerings. For now, the casino operators focusing on offering newest slots like Secrets of the Phoenix slot and other perks to attract players.