Millennial-style video gaming could be next casino offering

A  new form of gaming might be poised to enter Macau’s casinos in the near future, blending traditional video gaming with betting opportunities.

Video game gambling machines (VGM), spearheaded in the U.S. by New York-based firm GameCo, might serve as a calling card to younger, gambling-averse audiences by raising the impact of the gamer’s skill on their probability of hitting the jackpot and diminishing that of luck.

GameCo introduced the first VGMs in casinos in Atlantic City last November, starting with a game called “Danger Arena” that was trialled in Caesars Palace and Tropicana. It has since developed the company’s second game, “Pharaoh’s Secret Temple,” and launched it in the same two casinos earlier this year. Now the company is eyeing Macau in its expansion plans.

The company’s video games aim to cover traditional themes in the industry, such as action, combat and racing.

The general strategy behind the company is to take video games to casino floors where they hope to attract new demographic segments, such as Millennials, through “next generation” gaming machines.

Millennials and the younger population strata in general display less enthusiasm for traditional gambling machines, opting more for other entertainment services in integrated resorts, like bars and clubs.

The company’s co-founder and chief executive officer, Blaine Graboyes, told the Las Vegas Review Journal that VGMs will be instrumental in attracting the Millennial segment to casino floors. He said that according to the company’s market research, more than 60 percent of those playing VGMs in Atlantic City are younger than 40.

“Gamers also have a propensity for gambling and they don’t have any place to get together and socialize,” said Graboyes, according to the Las Vegas Review Journal. “The opportunity was to create a destination at a casino that makes gamers feel like the cool kids.”

Frederico Santos Rosário, the chairman of local eSports organization Grow uP eSports, told the Times he is aware of GameCo’s foray into the Macau market and that he believes there may be an opportunity for cooperation between the two organizations.

“I guess they [GameCo] are already talking to most casinos and most have shown interest in GameCo,” he told the Times yesterday.

“We are eSports, casinos are slots (boring). Between slots and eSports, perhaps video game slots will fill the gap,” added Rosário. “Look, if there were machines that allow much more skill input than slot machines, perhaps my friends and I would go to have a drink and play in the casinos as an alternative to arcades. Or even better, there could be a mix of video game slots plus eSports – little weekend gatherings – just like in other sports clubs.”

Grow uP eSports has been lobbying for official recognition as a sport from Macau’s Sports Bureau, which they believe will open the door to government sponsorship for local eGaming groups.

“If Blaine [Graboyes] decides to work with us, then we can promote diversity together and show the government that the current and next generation wants something more challenging and entertaining [in Macau],” said Rosário on whether the market entry of GameCo might inadvertently aid their objective.

GameCo, the first U.S. company making VGMs, is aiming to raise USD30 million in its third round of funding as it prepares to launch into new gaming markets.

“We are just starting on our next round now with the target of raising $20 million to $30 million depending on market conditions,” the company CEO added. The company gathered almost $10 million in two prior rounds of fundraising.

The latest fundraising round pre-empts the company’s plan to open an office in Macau. According to the Las Vegas Review Journal, Graboyes will be in Macau this week to prepare the office opening and to meet with casino owners and regulators.

Expansion into Macau – and also Las Vegas – represents the second stage in the company’s growth plan, which began in Atlantic City. Ultimately, Graboyes said he believes there is a market for independent VGM centers outside of casinos.

“It is only a matter of time before there is a video-game casino,” he said. “We are driving ideas for it and we would hope to be a key partner of the first one.”

How ‘danger arena’ works

“Danger Arena” is the first game developed by GameCo that was introduced to casinos in Atlantic City. A combination of video gaming and gambling, “Danger Arena” offers players a 45-second window to shoot as many characters as possible in a “first-person shooter” scenario. Players can bet at five price points from USD0.5 to $20 each round. Defeating six out of 10 characters earns players half of their money back, while a seven breaks even. Defeating more than seven enemies earns players between 2.5 times and 25 times the bet, with the maximum return being $500 for one round. Outside of this, occasional bonus prizes of up to $5,000 are randomly offered to players.