The Great Divide: And Other Reasons No One Is Playing Any More – win big at the casino

Recently, I had coffee with a member of the board of directors of a major clothing retailer. He had some very interesting observations about the way our consumer society is changing. He said a very clear line dividing society into two separate age groups is emerging; and each age group shops differently from the other. Let’s call it The Great Divide. Those over 50 years old still shop the same way they always have – they go to a bricks and mortar store. These “overs” look, touch and try things on before they buy; and they usually go home with a surprise or two, things they had not intended to purchase. Shopping in the traditional sense is very complex, time consuming and a buyer-beware experience, but the bricks and mortar world is the world of the over 50 crowd.On the other side of the Great Divide are the under 50 people who rarely go to a store. Instead the “unders” shop online and only for exactly what they want at the moment. Actually, my coffee partner said they shop using a mobile device. Always on the move and multi-tasking, they shop, listen to music, watch sports, talk and gamble wherever they are and regardless of what else they are doing. The only reason “unders” go to a store is to pick up a purchase and even then they often have the purchase delivered and avoid the store visit. Theirs is a satisfaction guaranteed experience. Whatever they buy, if they don’t like it they send it back and expect full credit. Although, the chain offers incentives to entice them to visit the bricks and mortar locations, they rarely do. Cyberspace is their space. He said there is only one exception; it seems that when a woman buys a dress she goes to the store to see, touch and try it on before she buys.The Great Divide is going to affect commercial gambling just as it does retail. Changes in behavior and tastes are not new. Both in gambling and shopping, the evolution from the one behavior to the other has been taking place for years. However, we still have a foot in each camp as it were – not quite online and not quite in bricks and mortar. That will change as the over-50 foot, the one in the bricks and mortar world gets too old to stand anywhere.Gambling has been constantly evolving in the United States for the last century and a half. The kinds of games we play and where we play them has always been a moving target. In the 21st century some of the most popular games of the 20th century are disappearing into extinction. Keno, horse racing, bingo, roulette and craps are on the list of endangered gambling species. Those games are dying because they are slow, boring and no longer attract, entertain or retain players. In the casino environment, boring is not acceptable and it is not profitable; but those games were not always boring.Take keno for example. In 1969, I returned to Nevada from a decade-long road-trip. I came back home with nine dollars in my pocket, no marketable skills and no plan for the future. My cousin was a school teacher and had a second job writing keno in a local casino. He graciously took me to meet his boss and I was hired on the spot; I worked 30 days without a day off. I had never seen anything to compare with the atmosphere, excitement and sheer mass of humanity that filled the casino every evening – especially on a Saturday night.On Saturdays there were 25 or so keno writers on my shift. Each writer would write nearly a thousand tickets in an eight-hour shift. The average ticket price in those days was around a dollar, so each writer generated approximately $1000 in gross revenue on a busy night. The thousand dollars would give the casino net revenue of $250; minus the departmental expenses, the casino would have netted $200 out of every thousand dollars. That $5000 in net profit for one shift on a Saturday in 1969 was very significant to the casino owners.When Warren Nelson and his fellow keno writers came to Nevada in the late 1930′s to ply their trade they stood at the top of the heap. Tired of fighting local law enforcement in Montana, Warren simply moved to Nevada where gambling was legal and paying the sheriff off was not necessary. He and others like him and their keno games added a great deal of excitement as well as a lot of cash to casinos around the state. In 1962, the average keno game revenue represented 25-30% of an average casino’s total gaming revenue. Even as late as 1980, keno statewide still contributed 10-15% of total gaming revenues. Today, keno represents less than 5% of total revenues and is continuing to decline.Keno was introduced into casino gaming during the Great Depression as an adaptation of the Chinese lottery. The Chinese lottery was played all around the west coast – everywhere where Chinese laborers had settled in the 19th century. The American version was faster; during those years keno was played 4 to 6 times an hour while the Chinese game was played weekly, daily or at most twice a day. The American version offered prizes that were very large for the era – by the 1970s, the top prize was $50,000. Even in the depression the top prize was over a thousand dollars. The possibility of hitting a “big ticket” was important to the success of keno; the big hit could give the lucky gambler enough money to solve all of his financial problems and change his life.No other casino game offered the same opportunity; the only other casino games were slot machines and table games. Slot machines had a maximum of 8000 mathematical possibilities and therefore could never offer truly large prizes – usually not more than $50 dollars. Slot machines were mechanical, slow and were designed to hold 15-25%. Table games were faster than keno, but also lacked the “big jackpot” that keno could offer.Keno was simply more exciting than those slot machines or table games. Keno was dramatic theater with its own special language, artistically written tickets, challenging mathematical problems, and high drama over the “calling” of the game and paying of winning tickets. Early keno players were almost exclusively men who were very often unemployed, or at best, under-employed. Keno provided a place to meet, talk with other men and hope; it offered a promise of winning something, and any win was significant.Every form of entertainment was different in those times. All of society moved at a slower and more relaxed pace; book clubs offered a new book once a month once a week one could see a new movie or cheer on the home team playing baseball or football. Sports and sports wagering have always been an important part of the American culture, but in the pre-cable television, pre-Internet era sporting events and wagering opportunities were infrequent. In that world of a bet or two a week, keno was exciting and fast paced.When keno was popular, there was no expectation of speed or of an infinite number of choices as an essential element of excitement. Men spent much of their entertainment time with other men in a bar or tavern or casino; the small casino became a natural extension of that culture. In its era, keno was a social event that provided exciting entertainment. Now, however, keno is a backwater event at best.The end of keno began with the advent of stepper slots with much larger jackpots and lower slot holds. Slot machines have taken over the casino floor pushing all the less profitable games into corners or out the door. Keno is simply no competition; a modern slot machine can offer prizes in the millions of dollars, paying back to the player as much as 97 or 98 percent of total wagered and keno still pays back only 75 percent of the wager. A slot machine now can offer as many as 20 decisions a minute, while keno struggles to deliver 6 decisions an hour. For years, keno management has looked without success for a magic formula to bring the game back. They are not alone; pit managers have long been doing the same with craps and roulette. It is a fool’s quest – too much has changed in society for those games to ever again find an audience.In the 21st century we have the internet, smart phones, 500-channel television and an entire world all linked together and changing by the moment. Waiting 5 seconds for something to download onto a computer is considered unacceptable. Today, if you place your bets online, you can wager on a game, a fight or a race some place in the world at any hour of the day and you can watch the game as it is played – live. What a world!The fate of keno is just one example, I might have used horse racing, craps, roulette, bingo or faro – you remember faro don’t you? Horse racing has found a bit of reprieve by using slot machines to subsidize the racing. But a horse track without slot machines is as endangered as a keno or bingo game. What about bingo, the staple of churches and social clubs? Bingo is like keno it has absolutely no future. Bingo only works where there is no alternative old folks homes and church basements. In any other place bingo is faced with better choices for the player. The are lotteries in 44 states, casinos in 37 states, plus poker rooms, race tracks and social clubs, bars and truck stops with slot machines and of course, an internet connection in nearly every house or on every mobile phone – everyone has an alternative to bingo. And therein lies the problem for those who would protect or rejuvenate the dinosaurs and dodos that keno and bingo have become; everyone has a choice and it is faster and offers bigger prizes.There is no reason to suppose that all gambling, whether in a casino, at a race track, a bingo parlor or the state lottery, is not facing that same generational divide and therefore a dramatic shift in gambling behavior. Younger Americans are rushing from place to place with a mobile device in their hand. They expect and trust the device to provide them with everything they want. Those younger people do not have the patience to play traditional games or to go to traditional places. Now, as long as those over-50s exist, some of the traditional gambling will survive – but every year those who are over 50 get older. In ten years the divide will be at 60 and then in ten years after that the divide will be at 70. And then… but you get my point. The end will not come tomorrow; but the end is visible from where we stand today in 2013.The Great Divide – I am clearly on the far side of the divide – the way-over-50 side; if I were in my 30′s, I would be thinking about online wagering opportunities with no ties to a bricks and mortar anything. But I am not 30, which means I spend my time thinking about keno, racing, bingo and craps. It is fun to reminisce about the excitement, the crowds and the noise – but there is no way to bring back keno or the other “depression era” games. Keno, horse racing, bingo and craps are all together with me on the far side of the Great Divide; nothing we do will make ourselves or our games exciting and interesting to those on the near side of the divide.