Keeping Pace in the Evolving Gaming Marketplace

There is no doubt that the face of the gaming industry is changing.  As recent as five years ago, 60 percent of the bottom line of a major gaming company like MGM MIRAGE was derived from gaming revenue, with 40 percent coming from hotels, restaurants and other services. Now, large companies typically generate more than 55 percent of their revenues from non-gaming amenities.  From Atlantic City to Kansas City and beyond, the trend is spreading well beyond Las Vegas.

Across the country, we have entered the era of the destination casino-resort, where multi-faceted, synergistic entertainment complexes featuring endless shopping, renowned shows, enticing dining options and other activities allow for an unforgettable visitor experience. Across the United States and the global gaming community, companies are actively seeking to break new ground or bolster existing properties with abundant entertainment options that offer something for everyone and hold unlimited potential.

Clearly, this trend is most evident in Las Vegas.  Developments such as the massive $7 billion MGM MIRAGE Project CityCenter, a large retail, casino and hotel complex slated to open in Las Vegas by 2009, and Boyd Gaming’s similar Echelon Place project, indicate the willingness of companies to invest aggressively in multi-use properties focused on non-gaming amenities.

The paradigm shift also is evident in current expansion efforts.  The current competition among licensing proposals in Pennsylvania features companies vying for the opportunity to build expansive, multi-million dollar entertainment complexes, incorporating options for every taste and purpose from convention and shopping space to night clubs and world-class restaurants.     

The change is also visible along the Gulf coast as post-Katrina rebuilding plans include the addition of golf courses, spas and other amenities that keep pace with the Vegas standard. Atlantic City has fulfilled its promise to shape the boardwalk and surrounding area into an enviable entertainment destination. Since opening in 2003, the upscale Borgata Hotel Casino and Spa, Atlantic City’s first new resort in over a decade, has been the top-grossing casino for all but one month since its arrival and has been credited with re-energizing the city, and other properties in the area are quickly building out and catching up. Even the smaller market resorts are revamping their properties, adding signature restaurants and vast entertainment options. These trends show no sign of slowing. 

Technology is another arena in which the gaming entertainment industry is witnessing great change and innovation. New server-based games will allow floor managers to instantly customize machines based on player preferences or casino promotions, and radio frequency identification (RFID) technology already is making its way into the gaming industry, making it easier to monitor and record chip transactions between employees and customers and improving security and efficiency on the gaming floor. These and other developments will change the face of the industry at an astounding pace.

How the industry grows also is changing.  In the U.S., the majority of emerging jurisdictions now are focused on racetrack casinos rather than the traditional casino model. Chances are, if you’re not running a racino, you’re competing with one, so understanding the intricacies and issues accompanying this growth market are essential for building your business.  No doubt the same can also be said of the Native American gaming market.  Global markets also are opening all over the world. Macau and Singapore have recently garnered the most attention, but lucrative gaming markets are also emerging in England, Eastern Europe, South America and beyond. Understanding the nuances of these cultures and the differences in regulations across these regions will be essential for pursuing new opportunities.

So, what do all these changes mean?  With innovation coming at such a rapid pace, today’s gaming executives must be able to understand and navigate an increasingly fluid and interconnected marketplace.  Remaining on top of industry trends and developments at all levels of the business has never been more crucial, or a greater challenge.

Recognizing this need, the American Gaming Association (AGA) is taking ambitious strides to readily provide a venue for gaming executives to gain access to the resources and knowledge needed to remain successful even as the industry grows and evolves.  Next month will mark the debut of the G2E Institute, a new G2E conference event focused on the growth and development of concentrated industry sectors and the connections between them.

Deliberately scheduled at the opposite end of the calendar from G2E, G2E Institute will feature an interactive and intimate workshop-style educational format to allow for more in-depth exploration of emerging trends.  Topics for the Institute will evolve each year in an ongoing effort to keep your business prepared for the future.

Since the debut of Global Gaming Expo (G2E) more than five years ago, we have embraced the chance to improve your business by arming you with the education and skills that allow you to remain salient in an ultra-competitive market.  In the face of such tremendous change, G2E Institute will inform and enable you to take command of the trends driving our industry into the future. I hope you will join me next month in Las Vegas for the premiere of this new and vital event.

G2E Institute will take place May 9-11 at the Red Rock Resort, Spa & Casino in Las Vegas. For more information, visit www.g2einstitute.com.