Back in the mid-2010s, there was some serious discussion over the future of the casino industry. Studies had shown that millennials were a little less interested in playing casino games than previous generations. There were many theories applied to this, ranging from interest in video games (and the by-product of esports betting) to different attitudes towards disposable income.
It is worth saying that some argued that it did not matter about millennials attitudes to gambling. That would, it was claimed, change as they got older. But the fact the issue made mainstream and financial news was important enough for casino bosses to take it seriously.
Around the same time, we started to see the arrival of skill-based games on the floors of gaming conventions. Although still in the prototype form, they caused quite a stir. A typical example was Pac-Man Battle Casino, a game based on the iconic arcade title Pac-Man. The idea was that you would play friends for money, and the outcome was not based on random chance but skill. That, some in the industry enthused, could be key to unlocking millennial interest in casino.
Blurred lines in gaming already
The move towards making casino games more like video games was not new. On top-rated sites like casino.com, you will find lots of games that have gameplay elements similar to video games. A good example is Playtech’s Age of the Gods: Prince of Olympus. It’s a slot, but certain bonus features, such as the one where you must help Hercules defeat the Hydra, are akin to video games.
But putting the focus on skill games opens up a new problem: how do you monetise it in terms of profit for the casino? We know that all casino games have a built-in advantage for the house – the so-called house edge. But if the outcome is based on skill alone, then talented players would win every time and there is no safety net for the casino.
And yet, there are solutions. The idea of online poker rooms exists because the poker sites charge commissions for each game – the rake. That’s one way to go, but another is through advertising. That would mean a casino game could promote itself as giving 100 per cent of the player bets back to in prize money.
IGA has huge potential
In-game advertising (IGA) has been around most of the 21st century, but it has yet to make the jump from video games to casino. In 2004, IGA generated around $34 million globally, but it had reached several billion dollars by the mid-2010s. This is expected to grow as gaming companies continue to roll out freemium games.
It’s speculative, but you could envisage a future where casinos utilise IGA as the main source of revenue ahead of player bets through the house edge. It fits well with the next stage of online casino development, which is expected to incorporate skill-based games alongside VR and AR and the continued blurring of the lines between casino and video games.
All of this should be qualified by a counter-argument that the casino industry arguably does not need to change, which can be backed up by revenues. Moreover, there are also regulatory hurdles for companies to overcome. Put simply: you might not be able to advertise in a casino game in many jurisdictions.
But there is also an inevitability about the changing habits of both gamers and gamblers. We see it already in esports, loot boxes and playing games for money within the metaverse. Casino might not need to change, but that does not mean it won’t organically. IGA is one option to explore if the industry is to enter a world where an in-built advantage is not offered by cards and roulette wheels.