Skill-Based Slot Machines: How Vegas Completely Missed the Mark

Duck Pond Carnival Game With Casino Background

Skill-based gambling has always been popular to a degree. However, its popularity has ramped up even more in recent years.

Live poker tournaments are drawing more players than ever. Sports betting is also looking up, especially ever since the US Supreme Court repealed a federal ban on it.

But why is skill-based gambling hotter than at any other point in time? The answer is millennials.

Born between 1981 and 1996, this generation isn’t satisfied with spinning slots reels and roulette wheels. They want some degree of control over the outcome. As a result, they’re not playing slot machines like previous generations.

Casinos are feeling the sting, because they rely on slots for the majority of their revenue.

The casino gambling industry rolled out skill-based slot machines a few years ago to help remedy this problem.

The results so far aren’t good. Skill-based slots don’t currently draw millennials to gambling floors nor appeal to older players.

How did Vegas miss the mark so badly on these games? I’ll answer this by explaining more on skill-based slot machines, why they exist, and what’s holding them back.

The Basics of Skill-Based Slots

A skill-based gambling machine is one that combines elements of both slots and arcade games. The latter is what brings skill into the equation.

The Association of Gaming Equipment Manufacturers (AGEM) fought for the regulatory approval of these machines in Nevada. They describe these slots as follows:

“Variable-payback percentages would, for example, give all players a base game with an 88 percent payback. But if you’re particularly skilled at shooting down enemy planes in the bonus round or outracing your friends in a road rally, you could boost your payback to 98 percent […]”

These games play like regular slot machines for the most part. However, the “variable-payback percentages” come into play during bonus rounds.

After triggering the bonus, you have an opportunity to boost your chances of winning through the bonus. You won’t gain a long-term edge over casinos, but you can at least come close to breaking even with enough skill.

Why Casinos Feel Compelled to Try Skill-Based Slot Machines

The gambling industry didn’t roll out skill-based slots because they felt that it was unnecessary. However, they’re facing a dilemma right now. Younger people don’t play slot machines.

Of course, some millennials gamble on slots. However, the percentage of this generation that enjoys slots is far smaller than baby boomers and Generation X.

Two Men Playing Skill Based Slot Machines

The latter generations are still enjoying slot machines at a high rate. However, casinos and slots developers feel like they need to take action now and figure out what younger people enjoy.

Skill-based slot machines are the first step in trying to lure millennials. Casinos are hoping that the mixture of traditional slots and arcade gaming can draw younger players.

Reasons Why Skill Based Slots Aren’t Popular

Skill-based slot machines are a good idea in theory, but difficult to design. They aren’t taking off for multiple reasons, including the following.

These Games Are Inconvenient

The technology that millennials have grown up with is a big reason why they don’t like slot machines. Younger adults have had access to console gaming for their entire lives.

They’ve never had to go to arcades like Generation X, because they could just pull up games on their Nintendo, PlayStation, or Xbox.

This same generation has also had access to smartphone gaming for years. They merely need to pull out their phone to enjoy the latest social gaming craze.

Skill-based slot machines present one giant convenience problem. They’re only accessible from a land-based casino.

Why would millennials want to drive hours or even fly to a casino destination just to enjoy gaming? They’re already very comfortable with the games on their smartphones and consoles.

These Slots Are Costly Just Like Any Other Slot Machine

Another advantage of the gaming technology that millennials have always enjoyed is that it’s cheap. For example, they can get an Xbox Live subscription for $60 for an entire year.

Slot machines are more expensive forms of entertainment. Games in land-based casinos often require you to bet $1 or more per spin.

Slots are quite volatile and don’t offer payouts very often. The result is that your $100 only lasts around 20 to 30 minutes on slot machines.

A skill-based slot doesn’t fully remedy this problem. It only includes a small amount of skill and is just as expensive as any other slot machine.

Skill-Based Slot Machines Don’t Include Enough Skill

At the end of the day, skill-based slot machines are more slots than skill. They require players to spin reels most of the time.

The only point when gamblers have control over the results is if they trigger bonuses. This process can take dozens or even hundreds of spins before the bonus round is available.

Skill finally comes into the equation at this point. However, most people are still going to feel like they’re just playing a basic slot outside of bonuses.

Millennials Like Spending Their Money Elsewhere

Research shows that the average millennial has less than $1,000 in their bank account. One reason why is because they spend more on pricey conveniences than previous generations.

According to Charles Schwab, young adults splurge on Ubers, $5 coffees, and fine dining. The amount they blow on these items is approximately 50% more than Gen Xers and 100% more than baby boomers.

Slot machines don’t make the cut on frivolous expenses. Millennials are more likely to spend $60 on a fancy meal than a slots session.

Most People Realize that Skill-Based Slots Can’t Be Beat

At one time, skill-based gambling felt like a world of endless possibilities where anybody could win big. However, this feeling came back when limited gambling resources were available.

Nowadays, countless online materials are available regarding poker, sports betting, daily fantasy sports, and other skill-based gaming. People are no longer in the dark and have more realistic expectations about their chances of winning.

One can quickly find out their odds of beating a skill-based slot machine within minutes. Assuming they do the research, they’ll find that these games still give the house an advantage.

Land-Based Gambling May Never Appeal to Young Adults

The problem with skill-based slot machines may stem from a larger dilemma for casinos: younger adults just don’t like land-based gambling.

I’m not saying that’s millennials don’t enjoy gambling much at all. They play table games like baccarat, blackjack, and poker to a degree.

Again, though, they’ve grown up with more convenient forms of gambling throughout their lives. They don’t feel the need to jump on the next flight to a casino resort when they can just flip the power button on a console.

Is There Still a Future for Skill-Based Slot Machines?

The future of skill-based gaming isn’t set in stone. However, this type of gambling has failed to capture its intended audience a few years into the making.

Skill-based slot machines still have a place on casino floors. But they may be just another niche in casinos, rather than the next big thing.

It seems highly unlikely that gambling establishments will ever capture millennials’ attention with any type of slot machine. Young adults just aren’t fascinated by sitting at a machine and spinning reels.

Gambler Playing Skill Based Slot Machine

The casino gaming industry may want to continue building up their other offerings. Vegas and other gambling destinations have had some success by concentrating on their nightclubs, spas, shopping centers, and amenities.

Of course, I’m not saying that casinos should give up on gambling entirely. They still have plenty of older customers who enjoy playing slots and classic table games.

But the days when generation after generation would blindly gamble their money away may be coming to a close. The industry needs to figure out if there’s another way to draw younger gamblers or continue moving towards mega resorts with a little gambling on the side.

Conclusion

The casino industry noticed that they had a millennial gambling problem a few years ago. Developers have since tried remedying this problem with skill-based slot machines.

So far, these games have had little impact. They’re largely just like other slots with a twist—skill-based bonus rounds. Once you trigger these bonuses, you get to play fun games. Your abilities influence how much money you’re able to make from such bonus rounds.

The concept behind these games sounds like a winning idea. However, it has yet to produce any real dividends for a few different reasons.

First off, skill-based slot machines are really inconvenient. You need to travel to a brick and mortar casino just to play them.

These slots are also far costlier than other forms of gaming. You can play smartphone and console games for much cheaper than skill slots.

The “skill” factor is used pretty liberally here. Your abilities only factor into the equation after you’ve triggered a bonus round.

Another problem is that you won’t ever gain a long-term edge with skill-based slots. Online poker and sports betting are more appealing if you’re hoping to win consistent profits.

In the end, skill-based slots miss the mark among gamblers. They just don’t offer enough skill, convenience, or cheap entertainment to appeal to millennials.

These machines may end up being part of casinos’ regular game selection. However, they’re far from the next big thing in gambling.