Saturday, July 3, 2010 | 2:01 a.m.
The gambling areas of casinos have long been advertisers’ Holy Grail.
American casinos attracted a record 62 million visitors last year — 28 percent of the U.S. adult population — despite the worst economy for gambling on record, according to the American Gaming Association. Designed to stimulate the senses and encourage spending, casinos are potential gold mines for advertisers, but are notoriously protective of their real estate. That’s especially true of slot machine areas, the biggest profit center for most casinos.
And slot machines aren’t just the most popular casino games in the country. They’ve been designed to mesmerize.
Enter Reel-TV, a Henderson company that has patented technology enabling television ads and other marketing messages to appear on slot machine video screens while not in use. Last month, frosty bottles of Bud Light began materializing on video poker screens inside the main entrance of the Palms, like hallucinations induced by the desert heat.
The ads represent a potential jackpot for billion-dollar beverage brands that are lining up to showcase their wares in this new advertising medium, incorporating one of the most effective devices ever invented.
Reel-TV’s Keith Atkinson says the medium is a natural for many companies, especially those that make alcoholic beverages. After all, they count Las Vegas casino patrons among their best customers.
In recent years, big Las Vegas casinos have capitalized on their brand image and heavy foot traffic by signing marketing deals with select companies that get naming rights and ad placement at special events. The Palms has such arrangements with Miller and Red Bull, for example.
Still, for many companies looking to get a piece of the casino action, even paying to hang an ad from the ceiling or sponsoring a gambling event can involve massive red tape.
“One (beverage company) told me they had been trying to get into casinos for 30 years,” Atkinson says.
The ads play only when machines are idle, replaced by the typical gambling menu the moment a customer touches the screen. At the Palms, entire banks of slot machines are set to play the ads at specified times, such as every 15 or 30 seconds of inactivity. With big casinos attracting an average of 25,000 people per day, a single 15-second ad playing more than 500,000 times per month could be viewed millions of times. Better yet for advertisers, those who walk through casinos can’t skip or fast forward through the ads, as they can at home.
Reel-TV’s sales pitch has hooked a who’s who of beverage brands, such as Coca-Cola, Budweiser, Miller, Corona, Dos Equis, Absolut, Grey Goose and Red Bull, that have either signed on to advertise on slots at the Palms or are in talks to incorporate their ads onto slots in Nevada and other states.
Rick Glenn, director of marketing for Findlay Toyota, says there is one drawback to Reel-TV: It doesn’t use sound.
Still, Findlay, which spends millions of dollars each year on advertising and “likes to be first with new technology,” signed on, Glenn said. The company had to shoot new television spots that could noiselessly grab people’s attention — a tough job for a local brand known for its boisterous pitchman John Barr and his British-accented offer to “do anything to sell you a car.”
“Imagine if John Barr is on every slot machine in this place,” Glenn said. “You couldn’t help but notice it.”
Eventually, Findlay wants to create ads customized to appeal to people who patronize casinos at particular times — the young nightclubbers after hours and the retirees who are daytime gamblers, for example. Some ads, depending on which casinos adopt the technology, could be geared toward high-end or budget-conscious consumers.
Reel-TV, recently approved by Nevada regulators, is awaiting regulatory approvals in other parts of the country, such as tribal casinos in California and Connecticut.
Atkinson, a former long-haul pilot who developed sophisticated mapping technology that plots how gamblers play machines in casinos, has spent more than a decade analyzing how slot players gamble. Before slot companies Acres Gaming and International Game Technology bought his mapping software and sold it to casinos that use it to capitalize on well-played machines and remove underperforming ones, universities used it to study the movement of pests and pollutants, plotting everything from a beetle infestation in the Sierra Nevada to the spread of chemicals in the Northern California delta region.
Atkinson knew that companies had been trying to figure out how to advertise on slot machines for years. He began working on Reel-TV in 2007, after his noncompete agreement with IGT, where he had been a systems consultant, expired.
Although the business opportunity was obvious, the path wound through a minefield of technical and political complications.
U.S. slot giants have developed software programs that can incorporate advertising on “windows” that appear, like Internet pop-up ads, as customers played or between gambling sessions. For casinos, the goal of such programs isn’t to get consumers to buy more beer. Rather, slot companies sell the technology as a marketing tool to help casinos interact with customers by reading player membership cards to greet players by name, offer coupons geared toward their spending habits and hold tournaments.
Some of these new programs run on proprietary systems that aren’t compatible with machines made by competitors.
By creating software that operates independently of the gambling action and can be incorporated onto any type of device, Atkinson sidestepped the need to cooperate with any single manufacturer. The technology is free for casinos to install, as it is supported by advertising revenue.
Still, why would the Palms or any other casino want to risk turning gamblers off with commercials on their machines? The answer is they can also use Reel-TV for the casinos’ own commercials. Besides highlighting Palms attractions such as nightclubs and restaurants, the casino expects to launch more targeted in-house promotions that hype special events and limited-time offers. One application allows customers to touch an image of a coupon on the screen and print out the coupon, redeemable for free play or drinks or other prizes.
Some beverage companies, Atkinson says, are interested in using the technology to help launch new products by offering, say, two-for-one drinks.
Might the ads distract people from the casino’s ultimate goal: getting people to gamble?
Palms Chief Marketing Officer Jason Gastwirth doesn’t think so. He figures the ads — especially a coupon or event information — might entice people to sit down and play.
With three out of four slots idle at any given time, the ads, played in sync, create a bold backdrop, attracting the attention of passers-by who otherwise might not take a second look at a machine, Atkinson says.
“Most people will walk by a slot machine without ever sitting down to play,” he says, surveying the Palms casino floor Tuesday. “We have seen people stop and pay attention to the machine, saying, ‘Hey, look — it’s like TV.’ ”
If it works as planned, it’s TV that might make one in the mood for a drink, a car, a few hands of video poker or all of the above.