At any hour at MGM Resorts International’s 15 casinos across the United States—including MGM Grand, Bellagio and New York-New York in Las Vegas—thousands of visitors are banging away at 25,000 slot machines. Lulled by the machines’ encouraging din, those visitors rang up nearly 28 percent of the company’s $6 billion in annual domestic revenue in 2013. Mgm casino.
But the hottest action coursing through MGM ’s casinos doesn’t necessarily come in the form of coins and tokens, it’s all of the game and customer data that MGM collects daily and the behind-the-scenes software that transforms the data into critical insights that, in turn, boost the customer experience and profit margins. The task falls to a key new hire in senior management—Lon O’Donnell, MGM’s first-ever director of corporate slot analytics—to show why big data is a big deal when it comes to plotting MGM’s growth.
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O’Donnell is part of a three-person team that taps software to crunch slot data and determine how individual machines, and the system as a whole, are performing.
“Our job is to figure out how to optimize the selection of games so that people have a positive experience when they walk through the door,” O’Donnell says. “We can understand how games perform, how well they’re received by guests and how long they should be on the floor.”
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The team then shares the collective behavioral and performance analysis with colleagues at other MGM-affiliated casinos, who use it to make decisions about, say, when to replace a video poker game that’s losing popularity or how best to arrange the casino floor.
MGM isn’t the only gaming company enamored with big data—nor was it the first. That distinction goes to the then-independent Harrah’s Entertainment and its data-driven executive Gary Loveman, who left teaching at Harvard Business School for Las Vegas in the late 1990s and turned Harrah’s into gaming’s first technology-centric player.
History, too, has caught up with the industry. For decades, Las Vegas casinos were some of the only legal gambling outfits in the country, so they could afford to be complacent. That advantage disappeared during the past two decades with the rise of legal gambling in 48 states.
“People didn’t know what worked. They looked at the first casino that was a box with no clocks and no windows and said, ‘That’s how you make a casino. It’s a maze, and that’s how you make money,’” says William Dunn, president and CEO of Dunn Gaming Solutions and creator of Slotfocus, a Las Vegas-based slot analytics services company.
Customers are now in control, forcing gaming companies like MGM to employ big data and analytics to better understand and cater to their preferences. And software is increasingly the lever the house pulls to maximize the fun—and profit—quotient and keep people coming back for more.