This past November I spoke on a panel at NIGA’s mid-year conference on the topic of millennials. It was a topic I had extensively written and spoken about in 2015.
Millennials are very different from other demographic cohorts. They have never known life without the internet, mobile technology and interactive video games. Their view of money is different and, for many, less important than unique –and “sharable” – experiences. The Great Recession certainly played a role in shaping this part of their psyche. Millennials also have different perceptions of family and peer relationships. Mom and Dad are often viewed more as friends than elders in the traditional sense, as has been honored by previous generations. Additionally, today’s 21-35 year old has a different prioritization and type of interest when it comes to socialization and consumption of leisure activities – such as casino gaming. The oldest millennials turn 36 this year. Their total discretionary spend already approaches 50% to total spend in the United States. In four short years, they will represent the majority of the U.S. workforce. They are here now and they are increasingly a force to reckon with.
For an industry chock-full of unappealing legacy product offerings and casino floor layouts many younger people find confusing and/or anti-social, a tremendous challenge (and opportunity) is fast approaching. Our industry must innovate in many ways to create new types of gaming products that are consumed in different ways in different types of environments. For all casino operators this is a watershed moment. For tribal gaming stakeholders, this is about much more than profits; it is about survival.
Shortly before my panel at the NIGA mid-year was about to begin, I bumped into Chairman Ernie Stevens in the hallway at the Seminole Hard Rock’s conference center. I’ll never forget how he so elegantly encapsulated the issue I was about to speak to when he softly told me “I am concerned about the sustainability of our business models.” There was something vastly different about the Chairman’s statement compared to what other (non-tribal) industry leaders have told me – even though on the surface they appear to be saying the same thing.
It would be another month before I began to understand what he meant.
“Our struggle is not about us, it’s about our
children, who are the present and the future.”
— Dolores Pompa (Lozana), Lipan Apache
It was early December and I was on a quest. Chairman Stevens’ comment remained top-of-mind as I toured the impressive Pechanga Resort & Casino earlier that day. As is the case at casinos across the country these days, large and small alike, two things were immediately obvious during my floor walk: although it was a Wednesday afternoon, business was booming – the casino was jam packed, and
the guests were quite old; it was a challenge to observe anyone under age 45 who was not an employee.
What will casino floors look like mid-week in 5-10 years? It doesn’t feel like these older players are being replaced, especially on the slots side, by younger waves of consumers sitting on the sidelines waiting to “age in” to the current experience. In fact the data bears that out. Younger people are not and will not become slots players, at least not in the product’s current form, in meaningful numbers. This is not to say that younger people won’t want to gamble when they are older – of course they will. Taking risks and wanting to place wagers on unknown outcomes is in our DNA as human beings. In the 1920s, when the parents of Baby Boomers were kids, it was common practice for families to gather around large radios in the living room for hours and listen to comedies and dramas. As technologies like television came along, the ways in which humans consumed entertainment changed; their need to be entertained did not. Today’s 35 year old sees a slot machine in much the same way a baby boomer sees a giant radio that once sat in the living room.
Having studied behaviors, expectations and trends among younger generations (Gen Xers and Millennials in particular) for some time, I know that unless the casino games (particularly slots) change our industry is in for a rude awakening in the form of sudden and tremendous gaming revenue drops. The result in Tribal Country will be catastrophic.
Some time ago, I remember hearing a fictionalized story about three young Chinook boys who excitedly climbed a great mountain on a spiritual quest, in search of a dream that would forecast their futures. As they slept at the top of the mountain, the first boy dreamed of a black bear. The second boy dreamed of an eagle. The third boy, to his dismay, dreamed of a tiny acorn. The meaning of the dreams of the first two boys became realized as one grew up to be a skilled hunter, the other an accomplished fisherman. The third boy struggled to understand the meaning of his dream and sought council from a wise elder, who told him that his dream was in fact the most significant. The wise elder gave the boy an acorn to plant and care for. Over time, the boy learned the significance of his dream as he saw the acorn sprout and become a mighty oak that provided food, comfort and shelter – the essentials of our existence – to all who come its way.
When I approached the Great Oak at Pechanga, it was with the type of awe reserved for moments when one is actually conscious of pending enlightenment. Though it looks like a small forest from afar, it is in fact one incredible tree. To be in the presence of something 1,500 years old is amazing enough, but to also experience it from the perspective of its historical and cultural significance to the Pechanga tribe left me speechless. So too was my reaction as I reflected upon old photographs at Pechanga’s cultural center that documented the simultaneousness of a raw, graceful beauty juxtaposed with palpable, wrenching poverty. I quietly air-traced a few Luiseño words etched in stone with my finger, as a lone crow cawed from above. Spiritually, I was somewhere else and the proximity of clamoring slot machines a few hundred yards away seemed incomprehensible.
And in that moment, I began to understand Chairman Stevens’ words to me a month prior. I keyed in on the words, “business model” .. “the sustainability of our business models” .. Failing to recognize the deep layers beneath that statement. As you know, it is about way more than business in Tribal Country. It is about dignity, it is about self-reliance and – at its core – it is about the very existence, the sustainability of the tribes themselves. The casinos are simply means to that end, or at least have been to date. I left the Great Oak that day awakened by its silence.
We cannot allow the rich histories, traditions and cultures of Native Americans fall victim to an industry that thus far has been slow to demonstrate innovation. At the same time, Tribal Country must embrace its role as entrepreneurs who will lead the effort toward what’s next in gaming and not wait for innovation to come calling. Consumers are changing. Tribal Operators without diversified business models and plans to future proof their gaming floors are in for a rude awakening. With each passing year, this problem will compound. With great challenges come great opportunities.
The goal of this blog is to discuss ways in which Tribal gaming operators can begin to think about future-proofing their businesses. Multiple perspectives will be included. Feedback is always welcome.