The Battle for the Entertainment Dollar
Casinos gaining ground as the integrated resort has arrived
By Jason Allsopp, Ethan Bondar and Paul Lauzon
We’ve come a long way from the days of “dinner and a movie.” People have more entertainment options to choose from today than they ever have, which means the battle for business in the entertainment industry has never been so complex and hard-fought.
As the Millennial generation continues to supplant the Gen Xers at the forefront of consumer demand, the needs of the entertainment market are changing quickly. The toll was loud and clear for casinos to adapt — not just to the evolving needs of their players, but to that of non-players as well. To remain a viable competitor in the battle for the entertainment dollar, the casino industry has reformed and expanded its identity, now offering a relatively vast, encompassing portfolio of amenities; fine dining, bars and lounges, theatrical and musical concerts, hotel and spa accommodations, to name a few. This expansion of amenities found in today’s casinos was documented, discussed, and detailed in the Winter 2016/2017 issue of Canadian Gaming Business magazine; the days of the gamblers-only card bunkers are in the rearview, and the “integrated resort” has arrived.
With the ultimate hope of expanding beyond traditional gaming revenue streams, the casino industry set out to gain greater relevance and recognition as entertainment destinations. Facilities were built. Amenities were added. Doors were open. The question is: Has it worked?
Casinos today undoubtedly are offering a greater variety of entertainment options; to say that they better resemble “entertainment destinations” now is an objective fact. But is that how they are perceived by the masses?
Continuously collecting data from the general population in a Canadian province since October 2012, Ipsos has analyzed years’ worth of data to infer public perception and behavior when it comes to their entertainment options, and how these have shifted over extended periods of time. Compared to nearly a half decade ago, people desire different things with their entertainment dollar in 2017. They realize their entertainment options have evolved, and ultimately have re-shaped their wallet to reflect their reshaped menu.
*The data presented in this article will be measured either on a quarter-over-over basis (using Q1’18 for current data, being the most recent full quarter) or on a year-over-year basis (using FY2017 for current data comparisons, being the most recent full fiscal year).
“When planning a night out with other adults, which entertainment options would you consider?”
Ipsos has asked the above question to residents of the jurisdiction since the winter of 2012. Analyzing our data collected from then to now, we find that there are significantly more residents now considering the casino as an entertainment option. In FY2017, when planning a night out with friends, one-in-six (16%) residents would consider this option; a substantial increase from the 12% observed in FY2014. As mentioned above, casinos across the continent have been making hearty efforts to shed their one-dimensional identities as merely places for gamblers to go roll the dice, and have adopted new identities as multifarious, socially minded entertainment destinations. Several years now into the industry wide transition, it has become evident that these efforts have succeeded in at least one measure: Casinos are now more relevant to a greater spread of people.
Dining out at restaurants remains the most common entertainment option considered by residents, despite having gone from 57% of the population considering this option in FY2014 to 54% in FY2017. Theatre/live shows (20% to 16%) and sports/sporting events (13% to 11%) have also decreased significantly since FY2014, while concerts/live music has remained relatively stable during this time.
A Paradox of Choices
Pairing these downward shifts with the incline in casino consideration produces a thought-provoking result: Dining out, live shows, and sports viewing are all major non-gambling amenities offered at these re-tooled, re-integrated casinos, yet fewer people now consider these entertainment options than they did before. How could that be when casinos are becoming more relevant largely because they now offer amenities such as these?
As facilities like casinos have started to offer such a multitude of entertainment options under the same roof, it could be the case that fewer people now consider these options as stand-alone activities; after all, why stop for a slice when you have the whole pie across the street? Casinos have succeeded thus far in raising their level of relevance to the public, but the standard for these facilities has been elevated in the process. These all-encompassing facilities have raised the bar for entertainment, and the bar will rise still; today’s battle for the entertainment dollar offers no time for laurel resting - the casino industry must constantly continue to improve their offerings to remain on the path to the tops of minds.
More people today are considering the casino as an entertainment option when planning a night out with friends, but are more people actually visiting these casinos now? Do their entertainment dollars end up in different pockets than they did in years past?
Short answer: Yes.
Our data does indeed indicate that past year visitation to a casino to spend money on “gambling, food, or entertainment” has risen, with two fifths (41%) of the adult population having visited a casino in the past year; a sharp increase from the 35% reported in FY2014. Visitation to a Community Gaming Centre to spend money on gambling, food, or entertainment has also increased from 22% of the population to 27% in that time. Not only are more people visiting these facilities, but they are spending more dollars when they visit as well; the stated average monthly spend on casino and gaming centre visits has increased since FY2014 from $86 to $114 and $48 to $71, respectively.
Past year participation in Internet gambling (16% to 23%), sports betting online (13% to 18%), and horseracing (6% to 12%) has also increased from FY2014 to the beginning of FY2018. Those who do participate in these activities are also now spending more when doing so; stated mean monthly spend for Internet gambling and sports betting online has also increased since FY2014 from $40 to $48 and $27 to $39, respectively.
Among those who participate in them, gambling activities now account for nearly a quarter (24%) of their monthly entertainment budget. This accounted for one fifth (20%) of the average entertainment budget in FY2014. Growth in gambling’s share of the entertainment budget is largely driven specifically by the increase in budget share of casinos (from 7% to 10% since FY2014) and gaming centres (from 2% to 3%).
A More Involved Province
The recent jolt observed in participation and spend at casinos/gaming centres and on other gambling activities leads us to realize two things:
1. As these facilities focus on offering a broader menu of entertainment options (both gaming and nongaming), casino visitors are expanding their budget to participate in more activities. Rather than substituting and re-allocating their casino budget to try these new amenities, they are spending
incrementally to ensure they can sufficiently bask in the wide array of offerings. In 2017, when going to a casino for a night out with friends, visitors now expect a more inclusive, more enveloping experience, and they are willing to expand their budget to achieve that.
2. There is a greater willingness to participate in gambling activities now compared to five years ago. Perhaps this is due to having more available gambling options to choose from, both online and off, allowing more residents to make more educated choices when it comes to deciding whether to participate in gambling activities. This heightened sense of awareness and education could also be due to casinos being so available to different people now; a more diverse spread of customers entering these facilities may be resulting in greater exposure for the gaming options themselves, and a more accepting public eye.
Undoubtedly, there will always be many forces at play, but the fact remains that there are more players now than there were five years ago, more entertainment options for non-playing visitors to choose from at the casino, and ultimately, a population who is more involved in the gaming universe.
“The Best Things in Life Are Free”
Interestingly, the proportion of residents who claim to have paid for admission to entertainment in the past year has decreased from 83% in FY2014 to 79% at the start of FY2018. The battle for the entertainment dollar is cutthroat; many facilities nowadays offer a plethora of entertainment activities like concerts and other live shows at discounted costs, or no cost at all. Perhaps for some this has spawned an expectation of complimentary entertainment, thus inherently devaluing the options that require an admission fee. This shift in behavior is reflected in the average share of entertainment budget for paid admission events, which has decreased from 10% in FY2014 to 8% in FY2017.
Another noteworthy shift observed over this period involves content consumption. The way people consume media content for their entertainment has changed with the state of available technology, as more people now are entertaining themselves with downloads of movies (50% during FY2018 from 43% in FY2014), PC/console video games (31% from 21%), and mobile device games (26% from 18%). Stated past month spend of these options have also increased significantly for each of these options since FY2014 ($24 to $29, $33 to $42, and $17 to $27, respectively). The share of the average entertainment budget owned by mobile device games has also doubled since then, trending up from 1% share to 2%.
People’s preferences for entertainment not only have changed, but are now changing more dynamically than ever as the technology around us continues to develop at an exponential rate. A chicken-or-egg-like debate could be raised here between people’s entertainment preferences and the options available to them. Whether necessity has mothered invention, or vice versa, this increased rate of change must not go unnoticed by the gaming industry. Though casinos are achieving greater recognition now as general entertainment destinations, and have succeeded thus-far in capturing the pulse of a market as it spins onto its new axis, they must continue to change and adapt alongside the wants and needs of their consumers. This is the great challenge and opportunity moving forward, and remains the key to the gaming industry advancing further in the battle for the entertainment dollar.
These are findings from a Ipsos Lottery & Gaming study conducted continuously from October 2012 to present day. For the survey, a sample of n≥3000 from a Canadian jurisdiction are continuously interviewed online each fiscal year using a 20-minute online questionnaire. The precision of online polls is measured using a credibility interval. In this case, the poll has a credibility interval of plus or minus 1.8 percentage points. For more information about credibility intervals, please visit the Ipsos Public Affairs section of our website [http://www.ipsos-na.com/dl/pdf/research/publicaffairs/ IpsosPA_CredibilityIntervals.pdf] at www.ipsos-na.com. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error and measurement error. Where figures do not sum to 100, this is due to the effects of rounding.
About the Authors
Jason Allsopp is a Vice President with Ipsos’ Lottery & Gaming practice. Based in Vancouver, Jason is part of the team of research experts dedicated to serving the market research needs of lottery and gaming organizations across Canada and the United States. Jason can be contacted at firstname.lastname@example.org or 778.373.5035.
Ethan Bondar is a Research Analyst with Ipsos’ Lottery & Gaming practice. Based in Vancouver, Ethan is helps manage key accounts across Canada and the United States, and is dedicated to serving the market research needs of organizations throughout the industry. He can be contacted at email@example.com or 778.373.5048.
Paul Lauzon is Senior Vice President and Managing Director with Ipsos Reid and head of the firm’s Lottery & Gaming practice that employs more than 10 full time lottery researchers. Based in Calgary, Paul leads the team of research experts dedicated to serving the market research needs of lottery and gaming organizations across Canada and the United States. Paul can be contacted at firstname.lastname@example.org or 403.294.7386.
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