Are Slot Machines About to Get Smart?
A perfect storm of new laws and millennial apathy is—finally—forcing slot makers to innovate
IT’S 11 A.M. AT THE ARCADE-LIKE OFFICES of Gamblit Gaming LLC, a startup based in Glendale, Calif., and a group of employees is gathered around a tabletop computer, searching a screen filled with hundreds of bottle caps for one from a particular (invented) brand.
“What are we looking for again?” asks Claudia Wirachman, Gamblit’s human-resources manager, as she scans the 43-inch display. She spots the right cap as the clock runs out and lets out a yell: “Ahhh! I saw it too late!”
"We get caught up in this," says Darion Lowenstein, Gamblit’s director of marketing.
In another corner of the office, other game testers are playing “Smoothie Blast,” a simple matching game in which players line up as much virtual fruit as possible in a race against the clock. For the grand finale, a virtual monkey makes a virtual smoothie from that virtual fruit.
“Smoothie Blast” and “Brew Caps Squad” look like attempts to create the next viral gaming app, another Candy Crush–like time waster designed to distract us while we wait in line. But there’s more at stake: Both games are gambling-machine prototypes. Each round begins with a wager and ends—potentially—with a cash prize.
Slots, which have been literal cash machines for more than a century, have hit a cold streak in recent years, especially with young gamblers. More and more millennials are going to Las Vegas for its nightclubs, restaurants and nightclub-like restaurants. They wager on sports and lay the occasional bet at the tables, but steer clear of slots. These younger gamblers, many of them raised on videogames, are uninterested in pressing a button and waiting for a random number generator to determine whether they have won. Slot revenue in Nevada has fallen 17% since 2007, compared with table games’ 3% decline.
Some industry experts aren’t concerned, believing it’s best to wait until the youth grow into “core slots customers”—mostly middle-aged and elderly women. But not everyone is convinced. Bill Hornbuckle, chief marketing officer and president of casino giant MGM Resorts International, was dismayed by a recent conversation with a slot-machine executive who told him not to worry about the future, that “there will always be 51-year-old women.”
Like the youth they’re courting, however, many casino executives aren’t content to leave it up to chance and are removing traditional slot machines from their floors to make space for craft beer and third-wave coffee. In the past, strict regulations have limited the extent to which manufacturers could factor skill into the outcome of their games. But under new laws, passed in Nevada and New Jersey last year, game creators can now alter the math behind the payout structure that undergirds slot games. These changes have done something revolutionary in the casino world: They’ve legalized slots whose outcome is not just based on random luck and paved the way for the “gamblification” of videogames produced by startups like Gamblit. The casino giants MGM, Caesars Entertainment Corp. and Foxwoods Resort Casino all say they plan to roll out Gamblit games this year.
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