$29bn reasons why you can't afford to ignore Tribal Gaming...
$29bn reasons why you can't afford to ignore Tribal Gaming...
US tribal gaming generated $28.94 billion in gaming revenues and $3.86 billion in ancillary revenues - a total of $32.80 billion last year, according to the 2016 Annual Report distributed by the National Indian Gaming Association during the Indian Gaming Tradeshow on March 13-16 in Phoenix, Arizona.
Clearly, it’s an industry to be reckoned with, and a business partnership opportunity that not many, outside of America, are aware of.
Through our cooperation with National Indian Gaming Association (NIGA) and Victor Rocha from Pechanga.net, we have been trying to increase the presence of tribes at ICE Totally Gaming. For the last three years, Victor has helped us to put together an educational programme for a Tribal Gaming seminar that informs the ICE audience on the size, nuances and opportunities in Indian country.
In an effort to understand a little bit more about some of the key challenges specific to Indian Country, I travelled to the annual Indian Gaming tradeshow in Phoenix two weeks ago - Clarion now organises it through the recently acquired Urban Expositions.
This was my third time at the NIGA show and I have to admit that I have grown to consider it as one of my favourites, mainly because of the community feel that it offers. It is not only about business in Indian country – and you really get to understand it attending the show.
Below is a collection of my notes, findings and observations that I came away with mainly after listening to some of the sessions out of a robust conference programme at NIGA.
Make gaming cool again!
It’s impossible not to hear the word "Millennials" mentioned in every single session during an American gaming conference nowadays (that will happen at GiGse too, with the Millennials Summit). I didn’t attend every session at NIGA, but certainly during the ones I did, the M-word was mentioned in abundance. Clearly, the new generations are on people’s minds. Some are very worried and call for total revolution, others think the issue has been demonised and there is nothing to worry about. It was interesting and sometimes amusing to hear disagreements on stage.
"One casino that got Millennials right is Dave & Busters," said Marcus Yoder from Gamblit Gaming, a company that always gets mentioned as one of the pioneers in creating gaming content for the Millennials. But Dave & Busters is not a casino; it’s an entertainment venue that offers food, drink, sports and ... arcade games. It’s very popular with the millennial demographic – it's a cool place to hang out. And it’s the social interaction aspect of gaming that wins the younger demographic there, which is a lesson for the casinos to learn – everyone agrees." Millennials don’t have an issue with gambling,"said Darion Lowenstein from Gamblit Gaming (indeed a Snapchat analysis of the "gambling" hashtag revealed positive associations with slots and bingo, according to Marcus Yoder) and the games that do the best in arcades are the ones that resemble casino games. They just perceive it as not fun. Casinos need to focus more on creating unique, fun, cool experiences, and to perhaps change the rewards models so millennial players can win a dinner with a celebrity rather than cash, and make these experiences easily available (mobile is key).
"Topgolf is another example of how a dull product has been turned into an attractive option for a day-out with friends," added Roberto Coppola from YWS Design & Architecture.
Dig deeper into customer data to understand the Millennials
Big data or small data? One thing is clear – customer data is a treasure that we can’t get to the bottom of and there are more and more layers to dig into. Millennials generally don’t want to give away their data and are unwilling to sign up for loyalty cards.
As Paul Gordon from Rymax Marketing Services pointed out, an average consumer is engaged in 12 to 14 loyalty programmes, but they really use four of five. Only 14% of Millennials have signed up for loyalty programmes, but that doesn’t mean they cannot be loyal, but only with transient, fun and cool brands, so to appeal to them as a marketing professional, you need to be really in tune with what’s trending.
There is no doubt that we still need more information on Millennials to be able to tailor the marketing message to them better. With their generation, it is critically important that your messages are not wasting their time, and are personalised and relevant. And that’s where the importance of data comes in. With the capabilities of data analysis currently available, it is possible to achieve much more effective player segmentation, which will allow for a one-to-one marketing approach rather than mass communication. Add predictive analysis to your data strategy and your marketing will be way more powerful.
How do you get player data in the first place though? As stated earlier, Millennials don’t really sign up for loyalty programmes. Aaron Ezra from OfferCraft, Bill Anderson from Traffic Generation and Paul Gordon from Rymax recommended some tricks to collect information, like giving rewards for a date of birth or offering lower restaurant prices for customers who use loyalty cards (something Harrah’s is already doing).
Casinos shouldn’t ignore social media as a source of data and as a marketing channel. Some casinos, such as Foxwoods, have opened Snapchat accounts to capitalise on the growing popularity of user-generated video. But whatever marketing message you release – make it shareable, which reaffirms the previous conclusion on the importance of social interaction.
Digital gaming is the future – why isn’t everyone all over it?
As the person behind research and content of GiGse, a US-based internet gaming event taking place in San Francisco in spring since 2011, I have been following the evolution of internet gaming for years, including in Indian Country.
As Victor Rocha’s panel on the politics of iGaming admitted, the conversation has evolved from a federal one to a state one, which is much more palatable for the tribes, as it allows them to have more control over the political discourse. After six years of debates and shifts, some are losing patience and wonder why it is taking so long. I have to admit this thought has crossed my mind listening to various sessions in which speakers all pronounced the belief that internet gaming is the future, but it needs to be studied and analysed to assess the possible impact and to allow tribes to prepare properly.
Victor Rocha explained perfectly why the tribes have been taking their time to evaluate this opportunity: "Tribes’ caution comes from the laws of unintended consequences". There are simply too many unknowns for the tribes to take the risk, in particular as they have way more to lose than commercial gaming. Which brings me back to my earlier point on how gaming is not just about business for the tribes, but their survival and self-reliance.
One could truly get to the bottom of this by listening to the keynote tribal panel with Mark Macarro, Chairman of Pechanga Band of Luiseño Indians, Rosemary Morillo, Chairwoman of Soboba Band of Luiseno Indians and Russell Begaye, President of Navajo Nation: "It’s More Than Just Gaming, It’s About Success – The Future of Indian Gaming". The discussion centred around how tribes measure the success of gaming and, while you usually hear about shareholders, revenue, EBITDA, customer numbers at commercial gaming panels, it’s obvious that for the tribes the value of gaming is way beyond the financial success: in scholarships to educate younger tribal members so they return from school and work for the tribe; in being able to protect their culture which is under threat; in gaining political power to exercise pressure and fight for the land.
As Mark Macarro from Pechanga stated, digital gaming and technology advancements are the future- they are a great opportunity but also a threat from the policy perspective, which is why tribes need to be careful, vigilant and protective of what they have gained so far.
But tribes have been innovators, as the Social Casino Innovators panel pointed out. Arizona’s Casino del Sol was the first brave casino to launch a social product, back then a big unknown, now a proven concept. Among IGT’s 50 social casino relationships, half are in Indian country, said Knute Knudson on that panel, exploring various social casino launch strategies. The panellists representing GAN, IGT, Headway Consulting, BlueBat Games and Partis Solutions have been unanimous in agreeing that social casino has proven itself as a way to engage with players digitally, drive more revenue, re-activate and retain customers.
Brick and mortar casinos also have an advantage over online-only operators through their physical relationship with players (84% of online player visit casinos at least twice a year, according to an IGT survey), which again brings me back to a previous point – importance of loyalty cards and customer data.
Of course, there have been many more discussions going on at the NIGA show. I have only selected few from a long list of topics and panel sessions, which in my opinion reflected the main themes, concerns and trends currently debated in Indian country. And they’re not that different from what commercial gaming is experiencing and what we will be continuing to talk about at the end of April in San Francisco at GiGse and the co-located Millennials Summit.