Recently, I met a member of the board of directors at a major clothing retailer. He shared some interesting observations about how our consumer society is changing. He stated a precise line drawing culture into two distinct age groups. Each age group shops differently. Let’s call this The Great Divide. Over 50-year-olds still shop in the same way as they did when they were younger – at a bricks & mortar store. These “overs” often touch, feel, and test out items before buying. Often, they come home with something unexpected, or even two. Traditional shopping is difficult, time-consuming, and costly. But bricks and mortar are for the over-50 crowd.
The people under 50 rarely visit a store and are on the other side of the Great Divide. The “under” prefer to shop online for what they need at the moment. My coffee partner said that they shop online using a mobile device. They are always on the go and multitasking. They shop, listen and watch sports, talk and play games, and do all this regardless of their other activities. They only go to the store to buy a product. They will often have it delivered to their home and skip the store visit. They have a 100% satisfaction guarantee. They can return any item they purchase and get full credit if they aren’t satisfied. The chain may offer incentives to get them to go to brick-and-mortar locations, but they seldom do. Their space is in cyberspace. He stated that there was only one exception to this rule. Women who buy dresses online go to the shop to try them on and see if they fit.
Commercial gambling will be affected by the Great Divide, just like retail. These changes in taste and behavior are not new. The evolution of shopping and gambling has been going on for many years. We still have one foot in each of these camps, but not online nor in bricks and mortar. This will change when the over-50-year-old bricks and mortar person becomes too old to stand.
Since the beginning of the 20th Century, gambling has evolved in the United States. It has been challenging to determine what kind of games and where they are played. Some of the most beloved games of the 20th Century are on the verge of extinction in the 21st Century. The endangered gambling species include craps, horse racing, Keno, roulette, and bingo. These games lose their appeal because they are boring, slow, and do not entertain, retain, or attract new players. Boring is unacceptable in a casino environment and is not profitable. However, those games weren’t always boring.
Let’s take Keno as an example. After a decade-long road trip, I returned home to Nevada in 1969. I returned home with nine dollars, no marketable skills, and no plan for my future. My cousin was a teacher and had a second job as a keno writer in a local casino. He took me to meet his boss, and I was hired immediately. I worked for 30 days without any rest. I have never encountered anything like the excitement, atmosphere, and sheer volume of people that filled the casino every night, especially on Saturday nights.
There were about 25 keno players on Saturdays. In an eight-hour shift, each writer could write almost a thousand tickets. In those days, the average ticket price was about a dollar. Each writer would generate approximately $1000 gross revenue per busy night. The net revenue for the casino would be $250. If you subtract the department’s expenses, it would have made $200 per thousand dollars. The casino owners were very proud of the $5000 net profit for one shift on Saturday, 1969.
Warren Nelson and his fellow keno writer came to Nevada in the late 1930s to make their living. Warren moved to Nevada because gambling was legal there, and it was easier than fighting the local Montana law enforcement. His keno games and the others like him added excitement to the state’s casinos and more cash. In 1962, keno revenue accounted for 25-30% of a casino’s total gaming revenues. In 1980, Keno contributed between 10-15% and 20% to total gaming revenues. Keno now represents less than 5% and is on the decline.
American Keno was quicker. As an adaptation of the Chinese lottery, Keno was added to casino gaming in the Great Depression. The Chinese lottery was widely played on the west coast, including in areas where Chinese workers had settled since the 19th Century. It was played between 4 and 6 times per hour during those years, while the Chinese version was only once per day or weekly. The prizes offered by the American version were monumental for their time – the highest award was $50,000 in the 1970s. Even during the Depression, the top prize was more than a thousand dollars. Keno’s success depended on the possibility of winning a “big ticket.” The big win could provide enough money for the lucky gambler to fix all his financial problems and completely change his life.
Any other casino game did not offer the opportunity to win the same amount of money. The maximum number of mathematical possibilities that slot machines could offer was 8000. They were, therefore, unable to deliver large prizes, usually less than $50.The slot machines were slow, mechanical, and designed to hold between 15-and 25%. Although table games were quicker than Keno, they did not offer the same “big jackpot” as Keno.
Keno was more thrilling than table or slot machine games. Keno was a dramatic form of theater that featured its language, tickets written artistically, mathematical challenges, high drama, and the “calling” of a game. The winning tickets were also paid for. The earliest keno players were primarily men who were either unemployed or, at the very least, underemployed. Keno was a way to have fun, meet other men, and share hope, and it promised a chance at winning.
In those days, entertainment varied in every way. The pace of society was slower and more relaxed. Book clubs were able to offer a new book every month, once a week. They also allowed you to watch a movie or cheer for the home team on football or baseball. Although sports and wagering on sports have been an integral part of American culture since before the advent of television and the Internet, wagering opportunities and sporting events were rare in those days. Keno was fast-paced and exciting in a world that only allowed one or two bets per week.
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 the 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 six 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, smartphones, 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 someplace 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 are no alternative old folk’s 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, social clubs, bars, 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 trouble 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 cause to believe 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 mobile devices 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. But you get my point. The end will not come tomorrow, but the end is visible from where we stood 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 30s, I would be thinking about online wagering opportunities with no connections 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 us or our games exciting and interesting for those who are at the end of these emotions.