Casino Slot Machine Allocation Declines 21% Since 2007

Traditionally, slot machines have been the bread and butter of the casino industry, and have helped generate a whopping 85% of a their revenues throughout the year. Major developments are currently afoot, however, and according to a recent report released by Carlo Santarelli and Danny Valoy from Deutsche Bank, the number of these machines featured at casinos have declined by 21% since 2007.
The analysis concentrated on 12 American casino firms with 120 venues between them, with its result showing the number of machines having dropped by 43,400 over the past decade. Commenting on the surprising statistic, the report read:
“All 12 operators in our analysis have culled their floors. We believe this trend is likely to continue into the foreseeable future as operators shift financial resources to other amenities and continue to seek efficiency on floors.”
As to the reasons behind the dramatic change, the study pointed towards the changing gambling habits witnessed in millennials, coupled with casinos now being able to generate more lucrative revenues from other non-gaming streams. Furthermore, even if skill-based slots which better appeal to millennials do prove successful, casinos are still likely to continue focussing on their higher margin non-gaming products, such as hotel accommodation, food, nightclubs, and all round entertainments.
Interestingly, the items just mentioned were once offered as comps to lure tourists onto a casino’s gambling floor, and while casinos are now increasingly relying on them for their profits, in an about-turn, at some stage in the future it’s not inconceivable that gambling comps may be offered in order to lure tourists to the enjoy the venues’ non-gaming products, instead. Helping to explain part of the seismic shift is the fact that the younger generation are now more likely to take vacation in order to enjoy a destination’s ambience and entertainments rather than its gambling facilities,  which they are able to do either online or at their local casino.