[toc]From May 12 to May 14, the Tropicana Atlantic City is hosting a weekend-long Melee/Smash4 tournament with a $10,000 combined pot bonus.
The event is significant in that it confirms the trend for casinos’ involvement in esports. For casinos, esports has a special attraction—the player demographic.
Millennials with money to spend are a tough market to crack. They demand value for money, authenticity, and a fully rounded entertainment experience. At the same time, they resist traditional sales tactics.
But once acquired as customers, they can be very loyal and have higher levels of engagement with their entertainment than traditional casino customers.
The esports betting industry is growing at an accelerating pace, but revenues are still comparatively low. Nevertheless, casino executives can see where the future lies. And esports will be a big revenue producer in coming years.
Outsourcing esports events mitigates risks
To put on the event, the Tropicana has partnered with Spawn Point, a company that specializes in:
“creating advanced competitive environments. The Spawn Point Esports tournament platform is built on the AliQuantum gaming platform – a recognized leader in gaming software with the regulated integrity of a licensed gaming platform.”
The Tropicana is reducing its business risks by using a third party. But it is also able to use Spawn Point’s expertise to increase its own knowledge of esports.
Co-founder of Spawn Point, Kevin Mercuri, explained:
“Esports has the ability to attract and entertain an entirely new demographic of casino players and should play an integral role in every casino’s marketing plan.”
MGM is bringing esports to the Las Vegas Strip
Many businesses can see the potential of esports. But they’re wary of taking on a new business vertical without sufficiently understanding the factors that will lead to success.
MGM Resorts International is one of the first casino companies to have the confidence to invest directly in esports.
In April it announced that the Luxor Hotel and Casino on the Las Vegas Strip will be transforming a 30,000-square foot nightclub into a new esports arena.
Even so, it too has gone for risk mitigation in the new business vertical. It is partnering with Chinese company Allied Esports, who have built a US business based on hosting esports events.
Senior Vice President of Allied Esports Jud Hannigan explained that the Luxor venue would be a fully featured esports tournament venue.
“The arena will provide a ready-to-go championship destination for tournaments, leagues and high stakes match-ups in a setting designed to deliver an unparalleled fan experience,” Hannigan said.
The Tropicana is offering entry level prices for the event
One of the interesting elements in the Tropicana event is the low tournament entry fee which it is charging.
Each of the four tournaments, two for Melee, and two for Smash4, costs only $10 to enter. According to a post on Reddit, as of May 10, there were over 500 players registered.
Spectators can buy full event or one day passes for $40 and $15 respectively. But even so, the total revenues generated by this weekend’s events will not be huge.
The price point indicates that the casino is carefully targeting the event. It reinforces the idea that the Tropicana is treating this as a learning experience.
Steve Callender, general manager at the Tropicana, said, “We expect a high turnout for players as well as spectators who will enjoy not only esports, but all that the Tropicana has to offer.”
And that may be the most important part of the learning experience—what additional spend will the esports audience deliver, and what elements of the Tropicana offer will most appeal to them.
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