Thursday, Sept. 29, 2016 | 2 a.m.
Where is the innovation in casino gaming?
It’s a simple question and one Mark Yoseloff, executive director of UNLV’s Center for Gaming Innovation, seemed to ask repeatedly during his presentation at the Global Gaming Expo (G2E) on Wednesday.
“I challenge anyone to name a product in the last 10 years that has been truly innovative,” he said. “Not an improvement, but something truly innovative.”
The resort itself has changed, adding day clubs, high-end nightclubs and other new amenities, Yoseloff said, but when it comes to actual gambling, the industry has lagged.
“Many folks here will claim that what they’re showing this year is a great innovation compared to last year,” he said. “But will it move any needles and expand the audience for gambling?”
Yoseloff’s premise: More people will gamble if the industry comes up with new, innovative ways for them to gamble.
As proof, Yoseloff pointed to specialty table games that were barely welcomed when they were introduced in the 1980s. Since then, he said, specialty table games have introduced gaming to a new audience and are now found on more than 20 percent of all tables.
Yoseloff, former chairman of the board and CEO of Shuffle Master, said he learned a lot about speciality games’ appeal during his 15-year association with the company. “When we did improve the table game we found a lot of people played the specialty table games who had not gambled before. We knew we had expanded the audience.”
Given the success of resorts on the Strip, industry outsiders can be forgiven for wondering why the inability to attract a larger audience is a problem. Just Tuesday, during a G2E press conference, American Gaming Association CEO and President Geoff Freeman said total gaming revenue in 2015 had surpassed pre-recession highs.
So why does it matter, as Yoseloff said in his presentation, that inflation-adjusted gaming revenue has declined and that gambling now makes up less than 22 percent of spending for visitors to the Las Vegas Strip?
“The issue is one also of profit margin,” Yoseloff said. “So, many of the operations in an integrated resort-casino generate revenue but at a lower percentage than gambling. In the last 30 years, visitation has tripled, and so has spending. But some of that spending is in categories with a lower profit margin than gambling.”
So if new ideas expand gambling, and gambling is a big revenue generator, why haven’t we seen more change?
Yoseloff did say manufacturers were starting to react. “Most have created innovation groups in the company ... that are dedicated to looking at ideas that are coming from outside the industry, from nontraditional sources.” he said.
But that reaction contains at least one of the reasons, Yoseloff says, behind the industry’s lack of innovation.
“Here’s another truism we need to acknowledge,” Yoseloff said. “Most of the true innovations have come from people who are not in this industry and who entered the industry by being innovative.
“The founder of Shuffle Master is good example, he said. He invented not the first card shuffler … rather he invented the first viable casino-quality card shuffler. And this has been the case with a number of great innovations. They were from people who are not … in the inner sanctum.”