Comment SEPTEMBER 2015
I had just finished reading an article citing MGM CEO Jim Murren, in which he prophesied the shift towards more social and interactive slots in the future, when the AGEM report into slot hold percentages appeared in my in-box. "The slot floors that you see today are not going to be in existence 10 years from now," said Mr. Murren, as MGM continues the construction of its $1.2bn casino in Maryland. “Maryland's largest casinos already have been reducing their slots offerings, freeing up space for popular table games or restaurants” - added the article from the Baltimore Sun.
It struck me as odd, that the author should argue the case against what he called “faded slot machine licences such as Ghostbusters and Wheel of Fortune,” while proclaiming the future to be table games, which have been in existence for hun- dreds of years. However, the AGEM research, which is something of a compul- sive read, illuminates the issue with much more clarity.
MR. MURREN IS RIGHT, THAT SLOT FLOORS WILL BE DIFFERENT IN THE FUTURE - BUT RIGHT NOW THEY NEED TO BE MORE LIKE THE PAST.
Without hitting the reader over the head with a conclusion, it’s pretty obvious from the research that when the ‘Great Recession’ hit the gaming market in 2007-09, consumer spending was hit hard. That’s clear. What’s interesting is that during this period casinos in the US tightened their Return to Player (RTP), squeezing the player win in a bid to boost margins from a smaller number of players. Operators sought to extract the maximum revenue from their dwindling floors and in doing so provided a much harsher slots environment.
As the recession began to recede through 2011-15, those RTPs didn’t reverted back to previous levels, despite economic uplifts in every state surveyed. As the grip on RTP failed to slacken players low- ered their spend accordingly and reduced their time on device. Operators in certain states responded by further tightening RTPs - fuelling a vicious ever decreasing circle.
Perhaps Mr. Murren is right, that slot floors will be totally different in the future - but right now it appears they need to be more like the past.
EDITORIAL Editor Lewis Pek
lewis@gamingpublishing.co.uk +44 (0) 1942 879 291
News Editor Phil Martin
phil@gamingpublishing.co.uk +44 (0)161 236 6669
Associate Editor (MALAGA) Karen Southall
karensouthall@gmail.com
Consultant John Carroll (BILLERBECK)
carroll@carrollconsulting.de
South America Correspondent James Marrison
jamesmarrison@gmail.com
Contributors David Addison Jeremy Thompson Hill Dr. Damir Böhm
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