Australia has been struggling with its problem gamblers. It is estimated that $12 billion amount lose to pokies each year and the casinos make profit from such gamers.
The amount Crown Resorts reaped from pokies last year was $715 million and the Star casino had an income of $661 million from people playing pokies.
But as the new generation of players are not much interested in traditional pokies now. According to the Queensland’s Commissioner for Liquor and Gambling David Ford “The demand for traditional gaming products is waning, and waning relatively quickly,” “Unless the industry can counteract that, gaming machines may well finish up going the way of Bingo.”
It’s a problem that will draw little sympathy from the many who detest the pokies in Australia, where rising concerns of problem gambling are sharpening a community and political backlash. But with billions of dollars in pokies losses revenue at risk, the nation’s pubs, clubs and casinos are desperately after a solution and the search to find one has officially begun.
Skill Based Pokies coming up At Casinos
Sydney Morning Herald in its latest news reported that Fairfax Media has confirmed that the Victorian and NSW gambling regulators have received their first applications seeking to roll out a vastly new breed of poker machine so-called “skill-based” gaming machines which look and feel more similar to video games, that can determine payouts based on player ability as well as chance, and are aimed squarely at drawing in millennials.
The applications have been launched by Melbourne pokies manufacturer Wymac, whose founders are involved in a joint venture with James Packer’s casino giant Crown Resorts for the purposes of developing skill-based games. The move has already drawn problem-gambling concerns about how mixing an element of skill with a game of random chance might exacerbate an “illusion of control” punters feel over the game.
If the applications are approved, it would mark the most radical overhaul of gaming machines since they were legalised in Australia in the ’90s and, arguably, since their inception more than a century ago.
As pokies had transformed so much over the years from their first launch in 1890’s, one can find pokies all computerised rather than mechanical, accepting bigger bets and spin much faster. These pokies models come with high-resolution monitors, simulated audio and video effects and pop-culture themes, all intended to make the game as compelling as possible.
According to Neil Spencer, a former head of gaming at Crown Resorts and a prominent industry consultant. “There will need to be an investment in a product that moves away from being a robot bolted to a bench with a chair in front of it.”
Will Skill Based Pokies Combat pokies Problem
Skill based pokies or video gaming is considered one possible way to combat the pokies industry’s existential threat. These pokies machines have been designed to appeal to millennials who have grown up playing games on smartphones and computers, the new wave of products feature interactivity and reward players for skill. Some of the products are ordinary poker machine games mixed in with an element of skill. Others include casino versions of puzzles, similar to the popular mobile game Candy Crush, or the classic Pac Man, or sports games and shooter games. Many of them use joysticks or touchscreens and allow for multiple players at once.
Darion Lowenstein, chief marketing officer at Gamblit, a manufacturer of skill-based games in the US agrees that for casinos, the trend of pokies revenue and usage going down while their average customer age is going up has been steady for years. People under 50 generally grew up with video games and being rewarded for skill and interactivity. These trends will continue until new forms of gaming that target demographic actually enjoys are put onto the floor.”
Jurisdictions in the US states of Nevada, home to Las Vegas, and New Jersey, home to Atlantic City, have recently passed laws permitting the roll-out of the skill-based pokies machines, and they now sit beside the rows of ordinary pokies machines at the world’s biggest and best-known casinos, run by the likes of Caesars Entertainment and MGM Resorts.
Gamblit says its hardware is now installed at more than 25 locations across the US. One of its popular products is a casino version of the hit mobile game Catapult King, which was developed with Australian developer Wicked Witch Software and has been downloaded 40 million times.
For the operators of Australian pubs, clubs and casinos, the cost of inaction could be immense. Although just a fraction of Australia’s adult population which is 4 per cent that plays pokies more than once a week, the 200,000 machines flashing and singing in venues across the country are major money-makers and generate revenue to the entire gambling business.
According to Samantha Thomas, a public health expert at Deakin University “The vast majority of people don’t play pokies in Australia, but people who do gamble on them regularly lose a lot, and the industry relies heavily on them,” The pokies industry having failed to find widespread appeal among younger people, who consider them mindless and boring and are acutely aware of the social harm they can cause is approaching a “tipping point”.
She adds that we really shouldn’t be surprised to see the industry looking at innovations that make gambling seem like it’s fun and have a higher level of skill or challenge but is ultimately designed for the house to win.
Skill-based pokies could encourage more heavy losses
Some experts, including SamanthaThomas, have expressed concerns that skill-based gaming could give players a heightened perception, or illusion, of the control they have over the outcome of a game, a factor that could encourage prolonged gambling and heavier losses.
Officials from Liquor & Gaming NSW, who are considering the issue, caution that there is a “lack of research on the potential risks of skill-based gaming”, and plan to commission studies in the coming months before a decision is reached.
Thus there is need to better understand issues such as risks around illusion of control and game returns for players with varying skills before any decisions are made on skills-based electronic gaming machine applications.
The concerns for Skill based pokies games
Taking this concern seriously, skill-based games developer, GameCo in New York, is undertaking research of its own, “because no one has any data yet”. In conjunction with a team led by Sally Gainsbury of the University of Sydney Gambling Treatment and Research Clinic, GameCo is running an online survey of 232 gamblers who have played skill-based machines in the jurisdictions where they have been rolled out, including Nevada, New Jersey, Connecticut and California. Gainsbury’s study is seeking to gauge whether players “overestimated” the role of skill.
GameCo chief executive Blaine Graboyes thinks “skill-based” gaming is a less-than-ideal name for the new style of pokies products, because it risks misinforming consumers into believing skill-based means skill-only, when the games still have random-number generators in them.
According to him it’s better to educate players and reduce what a mismatch between the mental model of the player and the maths model of the game. Also as the “skill-based” gaming is too confusing, Graboyes says “Video game gambling combines video games that are fun, with gambling that is thrilling and it actually describes what it is.”
Despite take-up in the US casinos, manufacturers like GameCo caution that the new gaming machines are still in the “testing phase”. Casinos have previously been disappointed with the “coin-in” rates, says Graboyes, as returns were lower in skill-based gaming due to the longer playing time between bets, compared to ordinary pokies, which spin more quickly and take bets more often.
One of its latest gaming titles, Nothin’ But Net 2, a virtual basketball-shooting game, seeks to lift betting speed more closely in line with pokies machines – “about 10 times per minute”, he says.
GameCo has since moved the terminals to Tropicana Atlantic City and the Borgata, and several new pokies machines are also located at Foxwoods in Connecticut. Gamblit, a rival based in California, has landed deals with several Las Vegas casinos, including MGM Grand, Caesars Palace, Paris, and the LINQ.
Some figures in the Australian gaming business say the problems facing the industry are no different to many other sectors, such as transport and retail, which are up against the threat of digital disruption and pressure to keep pace with the more tech-focused needs of younger customers. “Any industry is in danger of dying if it just sits down and does nothing,” one pokies manufacturing insider said. “Ours is no different.”
The problem, many in the sector say, is the level of government red tape, putting restrictions on just about every aspect of poker machine design and function. As our economy becomes increasingly cashless, will pokies be able to accept electronic payments? “The Reserve Bank of Australia has said that by 2026 no one will be using cash and that’s eight years away,” says international gaming industry consultant Neil Spencer. As well, he says, there is “nothing in any law” that says a gaming machine has to be bolted to the floor. “Why can’t a gaming machine transition to a mobile device in a venue?” he asks. “If we don’t start addressing the technology, things will dry up.”
Queensland’s gambling commissioner, David Ford, suggests that regulators across Australia have a duty to exercise caution before approving any new pokies features, and governments would face certain community backlash if they “rush off” and rolled out new technology when problem gambling consequences were unknown.
Yet with an estimated $5.5 billion in pokies taxes flowing into state coffers every year, and additional funding into sports and community clubs, regulators also had a duty to promote the sustainability of the industry.
Finally Ford believes that there will always be a challenge between what the industry might want to do because they believe it’s going to make the machine more profitable and what governments might have reluctance to do because of their concerns for problem gambling. (inputs from Sydney Morning Herald)