New gaming market: tech savvy millennials

Local gaming experts consider that betting on electronic video games in Macau’s casinos is still only a distant reality due to the lack of regulations and awareness of the sector, but nonetheless see its potential as a way to attract a new generation of gamers who are more interested in betting on games of skill than chance. Last week, Gamblit Gaming – an American gaming company specialising in real-money gambling and skill games for online and land-based casinos – announced it would adapt a Virtual Reality horror/action game for its gambling offering for physical casinos, tech news website VentureBeat reported. The company’s objective is to cater to a younger crowd of gamers, more interested in betting on skill-based games than in the more traditional chance-based gaming present on casino floors. “I don’t have any doubt that [electronic skill-based betting] is the future for all the integrated resorts and casinos, not just in Las Vegas but in Macau too,” says Fernando Pereira, Operations Director of Virtualmente, a digital studio based in Portugal and Macau that develops VR technology. “Virtual Reality or VR games betting goes back to the topic of betting not on chance but on skill-based games. I believe that eventually slot machines will be a small corner of the casino, something vintage, and skill-based games will take centre stage,” Pereira told Business Daily. Pereira – who is also the President of Grow uP eSports, a local non-profit electronic games association – believes younger generations are not as attracted to chance-based casino games like older generations, and believes local gaming operators could only profit from catering to this new market sector. According to a study on the entertainment preferences of millennials – people born between 1980 and 2000 – by the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism (LIGHT) at Stockton University in the American state of New Jersey, while 72 per cent of non-millennials from the study group played slot machines, only 44 per cent of millennials were interested in them. The study, published in July this year, also revealed that 40 per cent of millennials would be willing to bet on slot machines if it involved a level of skill, with respondents that played video games being slightly more interested in skill-based betting. “Young people want more competitive games where something comes from merit, and are not enthusiastic about just pressing a button and leaving things to chance. Enjoying computer or mobile video games is part of it,” says Pereira. Not that soon Fernando Pereira believes that before any exploration of betting on electronic skill-based games can begin, each game will have to be “regulated properly” and a legal framework will need to exist for the new industry. In May this year, the US states of Nevada and New Jersey implemented regulations on skill-based games, however Pereira doesn’t see Macau gaming authorities legalising such games any time soon. He considers that in the case of VR skill-based games – similar to the one created by Gamblit Gaming where the result depends on the player’s actions and abilities – there’s just no current legal framework, and gaming authorities are not “rushing to install it”. He adds that Macau’s position is to “sit down behind and wait for what is done in other countries until it feels a new trend is internationally accepted”. For the Virtualmente Operations Director, the solution could be to find a balance between skill and chance games. “Last year, I was at the Macau gaming show at the Venetian casino and I already saw many gaming operators offering fantasy sport solutions, sports simulators, with all the results being created by a computer algorithm. These kinds of games might be easier to be accepted by casinos, since they’re not totally skill-based,” says Pereira. Get them young Desmond Lam Chee Shiong, an Associate Professor in Hospitality and Gaming Management at the University of Macau (UMAC) also agrees that betting on skill-based electronic games could be a way for the Macau gaming sector to “reinvent” itself and target a more technologically savvy new generation of players. “This is a new trend and I think casinos are still figuring out if it is something that will hit it off with our Chinese gamblers,” Desmond Lam told Business Daily. The gaming expert sees this new form of gambling as being “in line” with the government’s call to diversify the city’s customer base and build a stronger mass market, closely linked to leisure and entertainment versus the VIP market. “Gaming operators should look into creating unique propositions within their gaming floors. Currently, each casino is more or less the same,” the UMAC Associate Professor notes. However like Pereira, he also considers the monitoring and revisiting of the city’s gaming legislation to be essential, and that currently authorities are still unsure if electronic skill-based games betting “is the way the go”. Step by step According to a gaming law advisor working for one of Macau’s leading gaming operators – who asked to remain anonymous – the legalisation of betting on electronic skill-based games would have to proceed in two ways. “First it would be necessary for gaming authorities to create a specific regulation for every specific game, since all casino games are regulated from Baccarat to Blackjack. Then it would have to be decided if the exploration of these games would be allowed in casinos or if it would operate as a concession,” the legal advisor told Business Daily. According to the gaming law expert, an electronic video games concession could be similar to the five-year concession currently provided by the MSAR government to Macao Slot Co. for football and basketball betting. “It’s two different scenarios. Although the first one I believe would make more sense, since the casinos already have the infrastructure in place and the investment capacity to purchase the machines,” the gaming law advisor adds. The legal advisor doesn’t believe the Macau government is purposely resisting the implementation of innovative regulations on electronic skill-based betting, but that the authorities are simply “not really aware of [the new market]” due to the novelty of the concept. Nevertheless, he also agrees that with casino gaming revenues decreasing, betting on skill-based video games could be an alternative offering to the more traditional casino games. “We can see that different generations are interested in different products. Young generations are more interested in games similar to the ones they play on smartphones or computers, that require different skills. If casinos expand their offer both in terms of games or entertainment, they could also expand the numbers of potential clients,” he told Business Daily. Business Daily questioned the Gaming Inspection and Co-ordination Bureau (DICJ) as to whether any possible legislation on skill-based electronic games in casinos was being considered, but no response was received by the time of print.

Innovative regulations This year in May, the US states of Nevada and New Jersey – where the US’s two biggest gaming areas, Las Vegas and Atlantic City, are located – defined what constitutes a game of skill, a game of chance and a hybrid game that incorporates both elements, and how to regulate slot machines or casino devices with such games. In the state of New Jersey, the new legislation defined that casinos are prohibited from making the games harder or easier to win while a game is already in progress, based on a player’s skill, and how peer-to-peer skill-based gaming should be monitored in order to prevent any collusion or money laundering activities. Betting against zombies The Brookhaven Experiment is a Virtual Reality survival shooter game created by video game developer Phosphor Games. The video-game developer partnered with Gamblit Gaming in order to adapt the game for casino floors, allowing gamers to bet money on whether they will survive a wave of zombies. Gamblit Gaming specialises in helping video game developers, publishers, and casino operators to adapt video games for integrated resorts, from racing to action video games. Both companies expect to be able to present the game at this year’s Global Gaming Expo (G2E) in Las Vegas, between September 27 and 29.