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Las Vegas and Reno casinos are betting on esports to draw millennials

Ed Komenda and Jason Hidalgo

LAS VEGAS – The light beam piercing the clouds above the Luxor for years beckoned tourists to a traditional casino landscape of slots, card tables and smoky corners of the night club scene.

In 2017, a longstanding piece of that landscape disappeared to make room for a new attraction that casinos are wagering is the future of entertainment in Las Vegas: esports.

On the grounds of the former LAX Nightclub now sits the smoke-free and well-lighted HyperX Esports Arena. The 30,000 square-foot facility designed to host live video game tournaments broadcasted to thousands watching online also offers a place for tourists to play their favorite games at consoles and PCs for an hourly fee. 

The swap from night clubs to video games represents a major business shift in Las Vegas, where casino companies struggle to find new and relevant ways to draw tourists of younger generations – and their money – to a vacation mecca built on brick-and-mortar gambling.

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“I would love to see Vegas be somewhat of a Disneyland for esports,” said Lovell Walker, head of the esports department at MGM Resorts International. “(A place) where a customer or consumer or fan of esports for that matter looks at Las Vegas as if it is Disneyland, and there’s an expectation that something esports related is going on in our city.”

It may be the best bet casinos have ever made.

The Luxor is home to the HyperX Esports Arena Thursday, June 13, 2019.

Consumers of the future

Gaming companies embrace concepts that move people into the casino. At the Luxor, esports has become a reliable tool to increase that traffic.

During a slow season, the HyperX arena draws 700 people onto the casino floor, according to Mark Green, vice president of global properties at Allied Esports International, the company that runs day-to-day operations there. 

On a busy day, that number jumps to 1,500. That statistic is favorable in the eyes of resorts. After all, even if gamers don't gamble, they surely need to eat – and there are plenty of restaurants on the way to the arena.

“MGM realizes there’s a future in esports,” Green said. “They’ve wrapped their arms around it. They want to drive traffic."

The Luxor is home to the HyperX Esports Arena Thursday, June 13, 2019.

Green took the job after a long career in nightclubs and restaurants. He didn't know what to expect entering the world of esports, but one thing became certain a short time into the gig: Gamers are easier to deal with than clubbers.

“We did an after party for a gaming publisher, and we told the hotel there’s going to be 1,000 people," Green said. “They went, ‘Oh my god, we’re going to need 30 security guards’ and I was new to it, too. When the event happened, I didn’t need one security guard.”

No fights. No arrests. No problems.

"Somebody put somebody on their shoulders," Green said of the single instance when security had to ask gamers to dampen a celebration. 

The response? "'No problem, sir,'" Green said.

In the esports division at MGM, Walker, an avid FIFA and Madden player, said the company is focused on capturing that kind of visitor – the consumer of the future.

“At a macro level we’re in the midst of becoming an entertainment company. Gone are the days when we’re focused solely on casinos. We’re now focused on our entertainment values – that’s food and beverage, the night clubs, the pools, the full package of offerings and esports is a piece of it,” Walker said. “This is what our future consumer wants and this is what the consumer of today wants. It’s very much a learning phase for us, but we’re very much in the midst of embracing what’s coming and doing the right things to get into the game.”

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Esports sweeping through Nevada

The strong esports action in Las Vegas has caught the attention of convention and tourism authorities up north.

The topic of esports has come up several times in the last few years during meetings of the Reno-Sparks Convention and Visitors Authority, which works to bring in events to the area and promote tourism to the Reno-Tahoe region.

Esports is seen as a way to attract a younger crowd such as millennials and diversify Northern Nevada’s tourist pool, which has traditionally relied on events that skew to an older demographic such as Hot August Nights.

Reno Mayor Hillary Schieve, who sits on the visitors authority board, asked if any considerations were being made for hosting esports during a discussion in June last year about a proposed $164 million remodel of the Reno-Sparks Convention Center.

“Esports have gotten huge and that would be fantastic for this market,” Schieve said at the June meeting. “It’s one of the things that really needs to be looked at because I see this as the wave of the future.”

Although esports attendees do not spend as much as traditional convention goers, they still spend money on restaurants, breweries and other businesses, said Mike Larragueta, the board's vice president of sales.

Larragueta brought up Las Vegas as an example of esports’ potential.

“They have facilities there dedicated to esports … and consumers are paying thousands of dollars to go to arenas and watch people compete,” Larragueta said.

One Reno hotel casino that has a history with esports in The Biggest Little City is the Atlantis Casino Resort Spa.

The property has hosted several local events in its Fun Center arcade over the years, including Street Fighter tournaments as well as Smash Bros. competitions where attendees bring their own controllers and televisions.

The tournaments worked especially well in bringing traffic to the hotel casino’s arcades. While arcade machines were incredibly popular in the 1990s, the advent of powerful home consoles and PC gaming led to a decline in the arcade scene nationwide.

“We’ve noticed that people who come in for the tournaments play the other arcade offerings that we have while they’re waiting,” said William Tiehm, Fun Center and esports manager for the Atlantis. “It complements what we already offer.”

The Luxor is home to the HyperX Esports Arena Thursday, June 13, 2019.

What happens when there's no competition? 

The spaces these properties are building for esports can also be used by everyday tourists looking to get a video game fix. 

Like the HyperX arena in Las Vegas, the Atlantis Esports Lounge features consoles open for play. That includes PlayStation 4 Pro consoles with popular games such as Mortal Kombat 11, Street Fighter V, Fortnite and Call of Duty Black Ops 4.

While the lounge was created with esports in mind, guests can also rent them out for $10 per hour on weekends – the same daily price at the Las Vegas arena – and $5 per hour on weekdays when there are no local tournaments scheduled.

Eventually, Atlantis hopes to expand the lounge with gaming PCs as well so it can host popular games such as League of Legends. Many professional players also prefer to play shooters on a PC with a keyboard and mouse.

The Luxor is home to the HyperX Esports Arena Thursday, June 13, 2019.

A 'gamified' life

At UNLV’s International Gaming Institute, Robert Rippee runs the Esports Lab.

Here, students develop presentations and business plans to help the casino industry better understand the behaviors and interests of millennials – their target audience.

“Increasingly, we find this idea of gamified life,” Rippee said, pointing to video games used in classrooms to help students learn faster. “Educational psychologists have known for a very long time that computer-based learning works very very well. Is it any wonder that video gaming is a natural part of their life?”

Video games, he said, have become a part of everyone's lives – whether they know it or not.

“Facebook is a game. You play with your friends and people you’re trying to impress or attack,” Rippee said, laughing at the social media generalization. “This kind of gamification has been prevalent in our society for a long time, and it’s only gotten bigger.”

It was only a matter time before casinos figured out a way to monetize the trend.

This article originally appeared on Reno Gazette Journal: Las Vegas and Reno casinos are betting on esports to draw millennials