Applied to the economy, that question still sounds like it came from a kid in the back seat while en route to a summer vacation destination. Well today, I’m that kid, and I’m not buying that bunk from dad anymore. Seems like he’s been saying “just over the next hill” for three and a half years now. Hell, I’m not even sure he’s using a map!
I suppose recovery is something that’s in the eye of the beholder, but I’m looking for one specific indicator to change before I’m willing to say recovery, and that’s the national unemployment rate falling below 6 percent.
Looking back at unemployment rates historically, there is a very strong correlation between a healthy economy and 6 percent or less unemployment. It’s simple to understand that when more people are receiving paychecks, there will be more consumers spending. That translates into higher levels of consumer confidence and the perception that life is good and will continue to get better. In a capitalist economy, these are ingredients needed to grow the economy and create wealth. A strong economy multiplies and expands on itself, and as the old adage goes, “The more you get, the more you get.”
We are not seeing that widespread now. While there are pockets of economic strength in the economy, they are the exception and not the rule. It can be difficult to come out and say the economy is a disaster, but it is. Many people feel telling it like it is during an economic slump is heresy. I just don’t agree. To become healthy again, we must have an accurate diagnosis. From there, we can implement the necessary changes, and folks, we really need some change.
Right now, the wagering industry is in an interesting situation. After four or five years of disappointing revenues domestically, we have, at the same time, opened more brick-and-mortar betting facilities. Our market was mature before, and now oversaturation has to be taken seriously. John Acres of Acres 4.0 makes a good point when he discusses the gaming industry’s need to appeal to a larger audience, especially because our audience is shrinking in size do to generational downsizing.
With Internet gaming now being looked at as a when and no longer as an if, what will the impact be? It’s difficult to predict, but it could lead to a more widespread acceptance of gambling in general. Conversely, it could also become a substitute for brick-and-mortar casinos and cannibalize our already-shrinking customer base. Certainly it will impact state and multi-state lotteries.
What actually does happen is going to depend on the message the public hears. But who is going to deliver that message? To get a win-win scenario, we’ll need a strong and unified message. There must be a consensus amongst the stakeholders in the wagering business, and that’s a different group than it was in yesteryear, and it’s changing and growing quickly.
Today, the stakeholders in the gambling pie are made up of commercial, tribal, governmental and soon, Internet gaming. It also includes the suppliers of product and technology. Many of the stakeholders are transnational. It’s not going to be easy to find and weave the common threads. At present, it’s a little messy as to how each group operates. They all have separate representation, but there is good inter-organizational communication between the various groups, but it needs to get much better. The gambling industry needs to have a common roadmap. The segments of it can all have their own waypoints, routes and favorites, but they really need to be using the same map.
Over the next five to 10 years, the gaming industry will change faster than ever before. Like all industries, we have been operating in the worst economy since the 1930s. Events like these act as catalysts for change and change is what we’re going to get, like it or not. The question is whether we as an industry will determine the outcome deliberately.
So, are we there yet? You tell me!
Peter E. Mead
Casino Enterprise Management