Gamblit CEO confident skill-based games will make mark

Skill-based slot machines seemed to be the talk of the town during the first half of 2017.

Their arrival on gaming floors generated interest like a new Hollywood film.

Fast-forward a year, and the excitement has fizzled. At least for now.

The first generation of skill-based machines — dwarfed on casino floors by hundreds of better-known slots — failed to attract much player interest, casino floor managers say.

Few have lasted six months, according to Jack Budde of Las Vegas-based Paragon Gaming, which manages three casino floors including Hooters and Westgate in Las Vegas. South Point has removed the skill-based games it tested because of a lack of interest, General Manager Ryan Growney said.

Eric Meyerhofer, CEO of Glendale, California-based Gamblit Gaming, a startup in an industry dominated by a few giants, remains confident skill-based games will prosper.

The company is rapidly expanding its footprint this year after raising an additional $25 million from investors in 2017, he said.

“You don’t hit the switch and it’s an overnight success,’’ Meyerhofer said of the new generation of games during an interview at Planet Hollywood. “It doesn’t mean skill-based has failed or is dead.’’

Caesars Entertainment, the largest U.S. casino operator by locations, is Gamblit’s biggest customer.

Caesars spokesman Richard Broome said the casino operator continues to experiment with skill-based games and expects the relationship with Gamblit to help it ”determine which new games may resonate with our customers on a large scale.”

Industry insiders say it could take five years of real-time testing on casino floors before skill-based games hit the jackpot with players.

Meyerhofer said he hopes Gamblit’s games ”crack the code” of success before his larger competitors.

Jersey repeat

Meyerhofer and other casino industry specialists see a similarity with the initial hype and then disappointment around the launch of online gambling in New Jersey in 2013.

Some gaming analysts at the time forecast the East Coast state populated by 9 million residents could generate online gaming revenue of $500 million to $600 million a year. In 2014, its first full year, New Jersey grossed just $123 million.

But Meyerhofer notes that New Jersey online gambling has been growing at a rapid annual rate of about 20 percent.

New Jersey operators have improved the variety and quality of their online gaming offerings, pulling in more players. That helped drive gross revenues to $246 million last year. Similarly, as skill-based game makers get more player data and feedback, they too will be able to improve their offerings, Meyerhofer said.

Gamblit expansion

Gamblit, founded by Meyerhofer in 2010, is taking on larger manufacturers such as Scientific Games and IGT to address a concern for operators: how to get more young people to spend money on the gaming floor.

Nevada slot revenue peaked a decade ago.

Bigger, curved screens with more elaborate graphics haven’t stopped the decline.

Manufacturers see a solution in entertainment that replicates popular video games and require some level of skill to win.

The belief is such games will attract people who grew up playing Atari, Nintendo or Xbox to rekindle a challenge from their past. Gamblit teamed up with the original maker of Pac-Man to release a skill game based on the popular 1980s arcade game later this year.

‘’There is a ton of good content out there,’’ Meyerhofer said. ‘’The video game industry is waking up to the opportunity in the casino industry.’’

Gamblit placed its first skill-based machine — the multiplayer Model G — on casino floors in May 2017 with minimal success.

The need for two players immediately discouraged some prospective players. The company since has added single-player modes.

The company began to roll out its single-player Tristation machines late last year.

The Tristation, which gets its name from its three gaming screens, has enjoyed more success.

Gamblit has about 80 machines on 20 casino floors. Meyerhofer forecasts that number could more than triple to between 250 and 300 by the end of the year as the company becomes licensed in more jurisdictions.

Patented platform

Gamblit uses its patented platform to allow third-parties to “gamblify’’ their popular video game. Gamblit also makes its own games.

The company’s skill-based platform is licensed by gambling regulators in seven states and as many tribal jurisdictions, which enables it to partner with leading video game makers.

It can take a new company as many as two years to get a gaming license and then more time to get their products approved, a time frame that could discourage video game makers from pursuing production on their own.

Activision Blizzard and Take Two Interactive, two leading video game makers, did not return calls for comment.

As it develops new lines of interactive casino games for a younger audience, the start-up has had to design a new style of machines and adjust them based on player feedback.

“We are eating our own dog food before we can ask others to do it,’’ Meyerhofer said about internalizing the manufacturing process.

Gamblit might outsource its production next year as orders ramp up, he said. That would help the company cut costs and reach profitability sooner.

Meyerhofer expects Gamblit to be profitable sometime next year.

Play cycle

Games of skill usually have a longer play cycle than a standard slot, meaning they might never generate the same revenue per minute.

A game cycle on a Gamblit machine lasts 25 to 90 seconds. That compares to a game cycle of just a few seconds for many slots.

Meyerhofer said the company is tweaking the games to speed up the cycle and improve their economics, but he says there is a limit to that.

“You need that to have an interactive experience,’’ he said. “All we will end up with is slot players’’ if the cycle is sped up too much.

That would mean his games would simply take revenue away from traditional slots on the floor rather than increasing casinos’ total revenue pot.

Meyerhofer said the games are indeed reaching a younger demographic who traditionally skips slots. That, he says, is the reason why the casinos need to keep them even if they don’t earn as much as the house average.

Gamblit’s own polling shows the majority of its players are under 30 with the an average age of 36, he said. The average slot player is over 40.

“We are not crossing players, which is what we wanted. (Skill-based and slots) are two separate markets,’’ he said.

Future

Paragon’s Budde said he believes there is a future for skill-based games and is testing them on Hooters’ casino floor. Growney, too, said he will continue to give some new skill-based games a shot as they are released.

Budde soon will be adding Texas Tea Pinball and Cleopatra Pinball, two skill-based games from IGT, and he hopes to reach an agreement with Gamblit on one Tristation.

He said he recently removed a popular skill-based game from the floor after players figured out how they could beat the machine.

That, Budde said, is the other challenge companies such as Gamblit face to increasing their sales. They need to make sure that the casino can achieve a healthy win percentage.

“I think over time, skill-based games could work if they get the math right.’’

Contact Todd Prince at 702-383-0386 or tprince@reviewjournal.com. Follow @toddprincetv on Twitter.

Business Videos
Las Vegas Convention Center expansion taking shape
Renderings and actual footage show how the Las Vegas Convention Center is evolving.
Former Starbucks CEO Howard Schultz at Las Vegas convention
Former Starbucks CEO and potential presidential candidate Howard Schultz spoke at the Epicor Insights user conference at Mandalay Bay Convention Center Wednesday, April 17, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Drew Las Vegas to open in the second quarter of 2022
The 67-story Drew Las Vegas is slated to open in the second quarter of 2022 at the north end of the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
NAB Day 1 (Time Lapse)
NAB kicked off at the Las Vegas Convention Center on Monday, April 8, 2019. (Mat Luschek / Review-Journal)
National Association of Broadcasters Show shows 1mm thick 8K TV with 22.2 channel digital sound
Japan’s NHK Science & Technology Research Laboratories booth featured a 1mm thick 8K TV system used in conjunction with a 22.2 channel digital sound system at the National Association of Broadcasters Show at the Las Vegas Convention Center. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Nevada shoppers react to Smith’s no longer accepting Visa credit cards
On March 1, Smith’s announced that it would no longer be accepting Visa credit cards at any of its 142 supermarkets, including the 45 in Nevada.
Massachusetts Gaming Commission asks how long Wynn executives knew about misconduct
Business reporter Rick Velotta gives an update on the adjudicatory hearing on the suitability of Wynn Resorts to retain its gaming license in Massachusetts.
Henderson app developer part of Startup in Residence
Henderson based developers of the app On Point Barricade are taking part in Startup in Residence, a North America program dedicated to pairing tech companies with governments. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Sam's Town employees and customers talk of their love for the iconic casino
Longtime Sam's Town employees and customers love each other and love their casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas apartments rents
Las Vegas’ apartment market has accelerated in recent years. Developers are packing the suburbs with projects, landlords are on a buying spree, and tenants have filled buildings.
William Boyd talks about the birth of Sam's Town
On the eve of the 40th anniversary of Sam's Town, William Boyd, executive chairman of Boyd Gaming and son of hotel namesake Sam Boyd, talks about how the casino became one of the first local properties in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
High Roller observation wheel turns five
The world’s tallest observation wheel celebrates it’s fifth year on Sunday, March 31, 2019. (Michael Quine/Las Vegas Review-Journal) @Vegas88s
Escape Room Industry Growing In Las Vegas
Escapology employees discuss the growing escape room industry in the U.S. and Las Vegas. (Bailey Schulz/Las Vegas Review-Journal)
Impact of parking fees on visiting the Las Vegas Strip
There are no data showing a relationship between Strip resort and parking fees and the number of out-of-state visitors to Las Vegas. But there are data showing a relationship between Strip parking fees and the number of local visitors to the the Strip. ‘’As a local, I find myself picking hotels I visit for dinner or entertainment, based on whether they charge for parking or not,”’ said David Perisset, the owner of Exotics Racing. ‘’It is not a matter of money, more of principle.’’ A 2018 survey by the Las Vegas Global Economic Alliance found 36.9 percent of Clark County residents reported avoiding parking at Strip casinos that charge for parking. 29.1 percent reported avoiding using any services from a Strip casino that charges for parking.
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Faraday puts Las Vegas land on the market
Nearly two years after Faraday Future bailed on its North Las Vegas auto factory, the company has put its land up for sale. (Michael Quine/Las Vegas Review-Journal)
El Cortez owner Kenny Epstein on running the iconic property
Kenny Epstein, owner of the El Cortez Hotel in downtown Las Vegas, talks about Jackie Gaughan mentorship and answers rumors about bodies in the basement at the mob-era casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
LVCVA recommends construction of underground people mover
The Las Vegas Convention and Visitors Authority announced the recommendation for an underground people mover for the convention center. The system would have the potential to expand and connect Downtown and the resort corridor all the way to McCarran. (Michael Quine/ Las Vegas Review-Journal)
LVCVA/Boring Company Press Conference
The Las Vegas Convention and Visitors Authority announced a collaboration with Elon Musk's The Boring Company to develop and operate an autonomous people mover system for the Las Vegas Convention Center District.
International Pizza Expo includes green and gluten free
The International Pizza Expo at Las Vegas Convention Center included companies focused on vegan and gluten free, and plant-based pizza boxes. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
International Pizza Expo kicks off in Las Vegas
The first day of the International Pizza Expo at Las Vegas Convention Center is everything Pizza. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
T-Mobile program aids guests with sensory needs
A program at T-Mobile Arena is designed to provide a more sensory friendly experience for guests.
Photo Booth Expo
Danielle May talks about how Simple Booth transformed her Volkswagen bus into a business.
Nevada Gaming Commission's highest fines
The highest fines assessed by the Nevada Gaming Commission, according to commission Chairman Tony Alamo: 1) Wynn Resorts Ltd., $20 million, 2019 2) CG Technology (then known as Cantor G&W Holdings), $5.5 million, 2014 3) The Mirage, $5 million ($3 million fine, $2 million compensatory payment), 2003 4) Stardust, $3 million, 1985 5) Santa Fe Station, $2.2 million ($1.5 million fine, $700,000 compensatory payment), 2005 6) Las Vegas Sands, $2 million, 2016 7) CG Technology, $1.75 million, 2018 8) CG Technology, $1.5 million (also $25,000 in escrow for underpaid patrons), 2016 9) Caesars Entertainment, $1.5 million, 2015 10) Imperial Palace, $1.5 million, 1989 11) Peppermill Casinos, $1 million, 2014
Tiny Pipe Home vs Shipping Crate
A Tiny pipe home was displayed at the International Builders Show this week in Las Vegas.
Auto repair shortage affects Las Vegas
The auto repair industry is facing a national shortage of workers.
Franchising industry booming
Experts say Las Vegas is a hotbed for the franchise industry.
Africa Love owner talks about his store in Las Vegas
Mara Diakhate, owner of Africa Love, gift and decor store, talks about his store in Las Vegas. (Bizuayehu Tesfaye/ Las Vegas Review-Journal) @bizutesfaye
Developer gets approval to build homes at Bonnie Springs
The Clark County Planning Commission has approved a plan to build 20 homes on the site of Bonnie Springs Ranch. (Michael Quine/Las Vegas Review-Journal)
Dig This opens new location In Las Vegas
Remember when you were a kid and played with construction toys in the sand box? Dig This Las Vegas has the same idea, except instead of toy bulldozers, you get to play with the real thing. (Mat Luschek/Review-Journal)
TOP NEWS
Home Front Page Footer Listing