A few months ago, Casino Enterprise Management Publisher Peter Mead visited me at Acres 4.0’s Las Vegas office, saying, “We’ve got to do something. The casino business isn’t growing. Casinos aren’t buying enough games and systems from suppliers and so suppliers aren’t buying enough advertising from me. We need new players. We need new profits. How do we get them?” I responded with a long explanation of how casinos are plagued by archaic games and outdated, proprietary systems, and how we can cure those ills.
After listening for a while, Peter interrupted, “This is what people need to hear! I want you to write about this in CEM, and you’ve got to do a radio show too. Keep it simple. And focus on the big ideas. Let’s get going!”
I wanted to call the radio show “Hero’s Journey” after anthropologist Joseph Campbell’s works on the structure of myth as related to the eternal human struggle against foes of ignorance and darkness. When Peter asked why, I explained that conventional casino wisdom falsely holds that we must adhere to the ways of the past. Any change to attract new players is a deviation from decades of success, and besides, it just won’t work.
The radio show must remind us that the human purpose is to overcome difficult obstacles in pursuit of gains that transcend mere self-interest. Change requires a willingness to speak against tradition and commitment to abandon past beliefs: A true Hero’s Journey.
The radio show should provide emotional encouragement while the magazine articles articulate the details of implementation. Peter saw merit through the haze of my explanation and gave free rein to structure the radio show as I saw fit. We agreed the magazine component would start after the radio show was established.
The radio show has been running for a couple of months now and—with helpful prodding from CEM Managing Editor Marian Green—we agreed to debut the magazine series in this August issue.
While working against that deadline—and six days into a month-long Airstream trip with my wife, Jo—came a message that on June 24, 2015, Peter Mead passed away in his Las Vegas home.
Inside our Airstream, now parked in Little Rock, Ark., I work to finish this first installment on the topic of new players and new profits. Tonight though, it is difficult to think of anything beyond the loss of Peter.
I remember Peter as a man of intelligent enthusiasm and genuine compassion. I remember his optimism for this magazine and his late evening phone calls to describe his newest ideas. And I cannot forget his bouts of depression when he would not return a call for weeks or even months at a time. And then eventually resume the conversation as if no time had passed at all.
I find myself ridiculously calculating the great sum of good created by Peter, yet somehow wanting to deduct points for the moments he fell victim to darkness.
I thought again about the Hero’s Journey: An arc of myth that teaches the structure of human greatness. That a life’s worth isn’t measured as much by accomplishment as by the power of the forces against which that accomplishment is gained.
Peter was a man who loved his mother, lived for his Rottweilers and loudly criticized everything Obama. Peter’s worth is not defined by his beliefs or his accomplishments but rather by his willingness to battle his demons and his hope of contributing to a greater good.
Peter was a man who gave his all, a man who sometimes stumbled, and a man who always found the courage to stand again. To my mind, that makes him a hero, and I end this day glad to have had a friend named Peter Mead.
A Brief History of Casino Evolution
I began working in casinos back in 1972, when only Nevada had them. I started my first company, EDT, just as expansion took hold in the early ’80s. My second business, Mikohn, was founded six years later and Acres Gaming began during the industry explosion of the mid-1990s.
Back then there seemed no limit to how big or numerous casinos could become. All that growth and boundless possibility was good for business. My companies invented products such as progressive jackpots, player tracking and electronic bonusing. We had lots of sales and made great profits. So did our casino customers. Growth is fun!
Then came the Great Recession of 2008, and the good times came crashing down. Suddenly we had too many casinos. Or was it too few players? Our future depends on how this question is answered.
Our actions since the recession trend along the too many casinos view. Expansion has virtually halted. Cost cutting is emphasized. Investment is made in other resort components—entertainment, restaurants, clubs and stadiums—while the casino is left gasping for air. If these conditions continue, casinos will most certainly follow horse racing into irrelevant oblivion.
I believe we have too few customers, and if we focus our collective energies, we can attract new players and new profits. We can return to growth. We can return to fun. There is certainly a large pool of consumers to pull from to create new players. Today, only one adult in four regularly participates in casino gambling. Even if revenue per player remains constant, we have the potential to quadruple casino revenues. That’s real opportunity.
What’s Holding Us Back?
The greatest obstacle to gaining new players is our own lack of understanding that it is our job to attract them. We are spoiled by decades of too-easy customer acquisition. Over those decades, wherever casino doors were opened, new players flooded through. We presumed an unlimited supply of customers just waiting for another new venue to open.
Little consideration was given to consumer desires. For many years we demanded they stand to play slot machines until Gary Platt finally convinced us to provide stools so they could sit. We refuse to update tables to make wagering easier because it would violate the tradition of what worked in the past.
Meanwhile, another set of minds—minds we all considered too young and dumb to succeed—made it their business to focus on consumer desires. These minds made foolish mistakes and gave their products away for free. They said they wanted to earn trust before earning profits. We saw lost profits.
While they leveraged the great advances in electronic communications—the Internet—we avoided its unproven complexity. Collectively these foolish minds created an industry that today drives the world’s future and is worth many, many multiples of the gaming industry.
A Newsweek article titled, “Why the Web Won’t Be Nirvana,” summarizes our present attitude toward the Internet and all new technology, even though this article was written in 1995. You’ll find the full text at www.newsweek.com/clifford-stoll-why-web-wont-be-nirvana-185306. Meanwhile, here’s an excerpt:
Then there’s cyberbusiness. We’re promised instant catalog shopping—just point and click for great deals. We’ll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obsolete.
So how come my local mall does more business in an afternoon than the entire Internet handles in a month? Even if there were a trustworthy way to send money over the Internet—which there isn’t—the network is missing a most essential ingredient of capitalism: salespeople.
This negativity—the recitation of every imaginable reason a new concept won’t work—is the most likely cause of the casino industry’s demise. We who sell risk to our customers refuse to accept risk ourselves, regardless of how greatly the odds favor success. Nowhere is this problem more apparent than in our data collection systems, which are exactly the same today as they were 20 years ago. 1995 was the year Acres Gaming revolutionized the systems business with bonusing capabilities. There has been no systems innovation since. The systems sold today are virtually identical to those sold in 1995.
Think of what that means. 1995 was the year Amazon sold its first book and a year later Palm Pilot organizers became popular. Cell phones were used solely to make phone calls and texting was unknown. Apple was six years away from its first iPod. Google didn’t exist.
Through all of recorded history, there has been no 20-year interval that has brought so much change to the world. And, thus far, we refuse to participate in that change. Even today, every casino on Earth runs upon the equivalent of a Palm Pilot. We have lost touch with consumer desires, even as other companies strive to serve the consumer’s every whim. That’s why, over the last 18 months, Apple has increased in value by more than the combined worth of every casino and casino supplier on Earth.
It is not too late to change—if it is change that we embrace.
A Casino of the Future
It is 2025. As you enter the casino, you instantly notice there are no rows of machines. Instead there are areas of differing comfort opportunities. On your left is a place of comfortable seats that resembles a Starbucks coffee shop. Sit down with your personal phone, pad, glasses or watch and connect to the Casinonet and play games, using funds from your own banking account. You order a coffee and dessert with just a few keystrokes. Payment is automatic, and your order is delivered.
Or you can go into the tournament room, with its giant video wall that shows a richly detailed game arena in which your team battles against other teams to win prizes. This time you choose to play through one of the comfortable gaming chairs, complete with a secure personal storage space, big screen display and hi-fi sound system. From here—in fact from everywhere—you can order food or drink, which is brought to you as you play.
As this is your first visit, a host approaches and asks permission to access your personal profile. This is just a courtesy, and, although the casino won’t create a permanent record of your preferences without permission, they’ve already evaluated your potential worth using the ID information provided when you first transferred wagering credits from your bank to the game. This is a casino after all, and casinos exist to earn profits.
The comps and courtesies you’ll receive are not withheld until after you’ve played long enough to earn sufficient points. In fact, points are no longer given. Your comps and courtesies are extended based upon your estimated potential worth. Your host is here to welcome you and explain what you are eligible for. If, over time, you consume more courtesies than your play warrants, you’ll be automatically downgraded. Until then, you are treated as the customer you are projected to become.
Instead of points, you receive free games to play for every wager increment you accomplish. You can play these games at home or while resting between games, and you can win valuable prizes that can enhance game play on your next visit.
You can choose to join a team, based upon your home’s location, social affinity or personal preference. Your profile automatically links you to friends and acquaintances (with your permission, of course) who will automatically learn of your wins, losses and accomplishments in whatever level of detail you deem appropriate. You can even allow friends to watch your game play in real time. They can offer advice, provide solace or just chat as your play continues.
You earn a series of badges, some for your personal accomplishments, others for your team’s accomplishments, and these are displayed on your game screen as they are earned. You can pause your game to watch television or browse the Internet, or you can accomplish these activities, even as you play, with the information and interface displayed as a picture in picture on your game.
Game selection is automatically tuned to your personal preferences. New games are always available and you may play them for free for so long as you wish. Of course, you cannot win real jackpots without placing real wagers, but you can, at least, come to understand a game before investing your budget.
Any game is instantly available from any location in the casino. There are old-time games with spinning reels and fruit symbols, or you can link into a live table game and place wagers as if you were sitting at the table. You can even view a list of all players in the casino and bet behind any or all of them, depending on where you think the greatest luck will flow.
Game structure is very different too. Your every move is measured: wager size, duration of pause between games, breath rate, heart rate, body temperature, the location of your gaze—everything. Volatility is no longer a function of specific game title but rather an adaptation to your behavior and budget. You can set a limit beyond which you do not want to spend. If you lose too quickly, volatility will automatically lower to help you achieve a satisfying time of play before your allotted funds are exhausted.
Games are no longer built from math models. Instead, game outcomes emanate from a central server. These outcomes, combined with your personal history, play levels and projected worth combine to determine your experience. The system knows your own appetite for volatility and senses when you grow impatient or too disappointed.
The goal is not to always deliver a satisfying experience because satisfaction is a relative term. Too much satisfaction creates a sense of entitlement, above which it is too costly to satisfy. In this casino, games are simply entertaining story lines that deliver outcomes dictated by the central system. While some component of those outcomes are driven by a traditional random number generator, a personalization compensator ensures that your level of success and failure stay within the bounds that are acceptable and entertaining for your own personal demographic and psychographic profiles.
The way casinos are structured in 2025 is very different than 10 years prior. No longer do games come from the same companies as displays and systems. No longer are casinos constricted to the products of a single company or proprietary data formats.
It makes no sense that you have to buy an HBO television subscription to watch “Game of Thrones” and a cable plan that includes ESPN to catch up on “Sports Center.” Likewise, it makes no sense that game screens or wager acceptors are limited only to the games provided by their vendors.
There is an incredible range of games because anyone can create them. Game authors are paid according to game success, and operators acquire games through the equivalent of an app store.
The wager acceptor system is a standard product that works across all games. The display consoles and personal device interfaces are standard too—available to all and owned by none. Patterned directly from the Internet’s proven technologies, standards ensure that casinos may choose each component vendor—game consoles, systems, reporting analytics and games—without regard for whether a vendor supplies any other components.
The casino buys from vendors that agree to adhere to defined technical standards, developed and maintained by a strong standards association. Exactly like the associations that maintain computer industry standards such as USB and Ethernet. Like USB and Ethernet, everything “just works.”
Game providers are no longer constrained by rules about math models and random number generators. In 2025, game designers are storytellers. They determine plotline and create characters to bring their stories to life. At intervals, they request outcome guidance from the central server and then shape the storyline to fit those outcomes.
Many of this casino’s game consoles look quite different from those in other casinos because they were custom-made by console vendors to fit the décor and brand of this particular casino. Because the consoles contain no random number generators and only electronic credits are used, these consoles are simpler to make and can be obtained from unlicensed vendors.
Behind the scenes a powerful management system maintains, analyzes and adapts to information recorded in incredibly large databases. Every visit, every game selection, every wager, every outcome and every player reaction is recorded and indexed by each individual player and kept forever.
Artificial intelligence algorithms predict business levels based upon external information including the state of the economy, weather, date, competition and even world events. Game outcomes, comps and courtesies are adjusted in range to maximize profits based upon these and other external factors, as well as preferences, projected value and history of each individual player.
This is all far too much for any human to consider, but the computer technology of 2025 handles it with ease.
Without cash, coins or tickets, repairs and maintenance are minimal. Yet the number of employees on the floor has increased since 2015. That’s because no one can please a human like another human.
These employees serve as ambassadors, providing warm greetings and meaningful recognition of accomplishment. All designed to increase player satisfaction and stimulate additional play.
Free of technical and maintenance burdens, these ambassadors are chosen specifically for their ability to please customers. Of course, each ambassador has her (or his) own unique personality that the central system understands and is assigned to serve customers who best match that personality.
The central system provides direction and information to employees and identifies how well each performs. The system recommends which employees require more training or who simply are not successful in pleasing customers. Managers can then investigate each situation to determine an appropriate remedy.
The casino of 2025 is a brave new world where technology and emotional gratification are combined to deliver heightened personal gratification to players and employees alike.
The cost of these future systems is not much different than equipment used today. Less is spent on hardware. More is spent on content and artificial intelligence. Building the system upon a set of common standards ensures that new vendors can enter the business without huge overhead or licensing costs, thereby ensuring a constant supply on new ideas and enhanced innovation.
Nothing I’ve described about the casino of 2025 requires new invention. Every aspect exists in one form or another today. This is the way of the future. Your choice is simply to embrace that future or become obsolete.
Next month, I’ll describe more about the psychology, technology and methodology required to start you on the path of gaining new players and new profits.