Game-changer: With slots losing their appeal, Vegas moves toward video games that pay out

Industries Associated Press

Bragging rights are usually the only reward at the end of a well-played video game. But what if high scores came with cash, too?

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Nevada is on the cusp of what could be a casino revolution, drawing up plans for the introduction of arcade-style video games that would pay out winnings based on a gambler's skill at, say, blasting aliens out of the sky, destroying enemy tanks or driving a virtual race car around a track.

The idea is aimed largely at attracting younger people who have been raised on Xbox, PlayStation and mobile game apps and don't get much of a thrill out of sitting in front of slot machines, watching reels of lucky 7s and cherries.

"It's certainly not your father's one-armed bandit anymore," said Marcus Prater, executive director of the Association of Gaming Equipment Manufacturers, which pushed for a Nevada law, passed unanimously this year, that directs regulators to craft rules for new kinds of skill-based games.

And what happens in Vegas is likely to influence Atlantic City, tribal casinos and other gambling spots around the country.

Video poker and blackjack, which have been around for decades across the U.S., involve at least some skill in putting together a winning hand from the cards you're dealt. But Nevada's 151,000 slot machines are, by law, purely games of chance, meaning everyone has the same chance of winning.

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Game developers, slot machine makers, lawmakers and regulators are betting new skill-based games could give a bottom-line boost to Nevada's casinos, which have seen gambling revenue slump from nearly $12.9 billion in 2007 to about $11 billion in 2014, with slot proceeds alone plunging 20 percent.

The drop-off is attributed mainly to the recession and a lack of interest among young people in slots, which have come to be regarded as entertainment for middle-aged women and retirees.

A Las Vegas Convention and Visitors Authority survey found that 63 percent of "millennials" born after 1980 gambled while visiting Vegas last year, compared with 87 percent of visitors 70 to 90 years old, 78 percent of baby boomers (ages 51 to 69), and 68 percent of Generation X members (ages 35 to 50).

"The next wave of people aren't going to stand there and play slots," said Greg Giuffria, who with his son is developing a line of what look like console video games with joysticks and controllers but allow betting. "The industry has to change or disappear."

The games and their payouts are still being developed because up to now, game makers have been hesitant to jump in without knowing whether the machines would pass regulatory muster. Slot machine manufacturers are likely to team up with video game makers in creating the new attractions.

Peter Trombetta, an analyst with Moody's, said the idea has potential: "I think there are definitely people not interested in sitting in front of a slot machine and pushing that button for an hour."

Eric Meyerhofer, CEO of Gamblit Gaming of Glendale, California, which is developing some of the possible new games, said he doesn't expect slots to disappear. Instead, he said, he envisions game zones on the casino floor with a club-like feel, with perhaps a disc jockey and a bar nearby.

"It's more of an arcade experience without it being for, you know, children," he said.

Nevada's gambling regulators hope to have the rules drafted and ready for the Nevada Gaming Commission to approve as early as October.

New Jersey announced last fall that it would entertain any ideas for skill-based games. So far, though, only one digital game has been submitted for approval, and it's being reviewed.

Now that Las Vegas is getting into the game, things could start happening.

"If it's good enough for Nevada, then it's good for everyone else," said I. Nelson Rose, a gambling law expert from Whittier College in Southern California.

Kandra Covert, a 26-year-old sales trainer in the tanning industry who was visiting Las Vegas from Tampa, Florida, for a recent conference, ended up with a mere 19 cents left after playing the slots, something she rarely does.

"I don't like blowing my money on silly things," she said. But she liked the sound of skill-based machines in the not-too-distant future: "I have lots more skill than chance."