On the 19th of June in Sunday News I briefly mentioned that eSports are just starting to impact Las Vegas. Despite the rapidly growing popularity of eSports around the world, it’s just reaching this city that sees over 42 million tourists a year. Today we’ll look at what eSports is, who enjoys it and why it matters to Las Vegas.
What Are eSports
I was first turned on to eSports last year and my fascination has grown since. This might surprise you but by definition, eSports is technically a sport. Sports are defined as “an activity involving physical exertion and skill in which an individual or team competes against another or others for entertainment.” Even though eSports involves competition, it isn’t the kind of sport many of us have grown up with.
The competitive and professional video gamers use skill but not the traditional athleticism you may be used to from team sports. There’s no running but you must have the stamina to compete in eSports. Looking back, this is how a NASCAR driver was first described to me as being an athlete many years ago.
Okay, so people play and watch other people play video games. In the eyes of many eSports fans, this isn’t very different than watching other people play sports on TV. Take a moment for that idea to soak in. Gamers are no longer tied to playing with a friend on a couch in the same room. They’ve have been able to play together online for over 20 years now.
You can have an eSports team comprised of players from every continent if they choose. We’re not talking about 4 kids on a couch anymore. This is where eSports begins to transform into more of a traditional sport. Teams of players get together to practice and become better individually and as teammates. They then take the field (in this case TV screens) for their competitions.
After passively following eSports for the past year it seems as though it’s still just hitting mainstream America. Twitch gets millions of eSports viewers for every major tournament. The views are great exposure for the eSports world but that’s not quite mainstream. It’s getting there.
ESPN viewers still freak out when traditional sports programming is replaced with eSports. The network understands that there are people who want to see these events. There will be more eSports events appearing on network TV more often. In fact, TBS recently started airing a weekly eSports TV show. TV still stirs the drink in mainstream acceptance. ESPN, TBS and other networks will help it reach more of a mainstream audience that will be needed to grow in America.
Can eSports Work In Las Vegas?
Without knowing about eSports you might assume that video game competitions draw a much younger crowd than the average person who visits Las Vegas. You wouldn’t be entirely correct with this assumption. According to the latest survey of visitors by the Las Vegas Convention and Visitors Authority the average age of a Las Vegas tourist in 2015 was 47.7 years old. While the majority of eSports fans are under 34, a new report from Mindshare, 60% of eSports fans are between 25 and 39 years old. That’s certainly younger than the visitor to Las Vegas but not as drastically different than you may have thought. The Mindshare report says that 60% of eSports fans are of casino visiting age.
The Mindshare report of eSports enthusiasts shows that they have an annual household income of $75,000 per year or higher. Furthermore, 31% of eSports enthusiasts have an annual household income of $90,000 or higher. Think these are the kind of customers a Las Vegas casino would like? If you visit page 64 on the LVCVA report you’ll see that Las Vegas tourist income is similar to that of eSports fans.
Las Vegas is always evolving and eSports fans and participants could become a major segment of the people who visit Las Vegas. They won’t be buying tickets to see Wayne Newton but they might spend a similar amount to see a band or DJ perform.
Competitive eSports started modestly in the early 2000’s and has slowly grown. Today eSports is so popular that some competitions are held in arenas and stadiums like the traditional sports we grew up with. This is a worldwide phenomenon that started to impact the United States in 2013 when The League of Legends Finals sold out the Staples Center in Los Angeles with over 18,000 people in attendance.
Earlier this year The North American League of Legends Championship Series Spring Finals took place at the Mandalay Bay Events Center. You may know this as the concert venue where pop stars like Ariana Grande or the New Kids on the Block perform. There were approximately 15,000 in attendance over the weekend for the event. This isn’t quite the same size as an event as a sold out concert but it’s substantial for a growing sport. This was the most people to see an eSports event live in Las Vegas.
Since opening in 2012, Downtown Grand has been searching for something special that gives people a reason to visit. After multiple attempts at changing the casino layout, they may have found a niche. Downtown Grand is forging ahead as the home of eSports in Las Vegas. They’ve turned the high limits rooms into eSports lounges. You can now watch and participate in eSports events regularly. Financials aside, this idea is off to a modest but respectable start. Downtown Grand is prepared to expand as eSports in Las Vegas grows.
Today’s Las Vegas
Business in Las Vegas today doesn’t revolve around just the casino and gaming. Earning revenue from hotel rooms, restaurants, bars and nightclubs are as important as gaming. Casino operators won’t care if 18,000 people are visiting Las Vegas to see a Garth Brooks concert or watch other people play video games. The casinos will gladly offer places to eat, drink, sleep and gamble for the guests.
There’s a similarity to pop music fans and eSports fans. Ariana Grande might sell out the Mandalay Bay Events Center. Many of her fans are below the age where they can even walk the casino floor. The eSports enthusiast fits a similar demographic and might even be a little older. While some fans won’t be able to drink, gamble and move about the casino freely there will be a significant portion who can.
While non-gaming revenue accounts for the majority of money a casino makes there is still plenty derived from gambling. According to the Las Vegas Convention and Visitors Authority, 73% of people who visited Las Vegas last year spent time gambling. This is actually up slightly from 2014. Gambling may not be the reason for many people to visit Las Vegas, but when in Vegas…
The Nevada Gaming Commission has been approving plenty of new sports betting regulations over the past couple of years. As I write this, a new form of Daily Fantasy Sports was approved for casinos. The Nevada Gaming Control Board has listened to details about eSports and gambling and is open to the idea in the future.
There are some startling revenue figures for eSports around the world according to a report from Eilers & Krejcik Gamin and Narus Research. There will be $8 Billion will be wagered on eSports around the world in 2016. This includes cash wagers and skins (virtual weapons with a cash value) wagering. They project that this betting market will reach almost $30 Billion by 2020. This is rapid growth as that’s only 4 years from now.
This betting market isn’t high rollers. These are average gamblers wagering on eSports. The $30 Billion in wagering revenue in 2020 will come from a projected 15.4 million people. Skins wagering isn’t the same as walking up to a sports book window. It’s a large part of this market and probably not a part of casino gambling.
The report projects that about $650 million will bet be in cash on eSports worldwide in 2016. Their best case scenario projection for cash wagering on eSports in 2020 is just over $13 billion worldwide. That’s a significant increase in revenue and Nevada can’t ignore taking their slice of the pie.
Future of eSports In Las Vegas
Las Vegas is the American home of gambling and self-proclaimed entertainment capital of the world. This city may have been founded on gambling but it’s become one of the best hosts for major events in the world. Hosting eSports events seems to be a no-brainer. There are few cities in the world that can provide similar infrastructure and entertainment for those who may travel to see a competition.
While eSports aren’t traditional sports these contests and tournaments set up in a similar manner. When you add a gambling component to any sporting event there’s an increase in participation and excitement. The audience for March Madness wouldn’t be quite as large if millions of brackets didn’t have money or bragging rights riding on it.
Nevada saw its best year in basketball wagering during March Madness in 2016. That’s only growing and the sports book operators love the increased revenue. The next evolution in sports gambling could very well be eSports. There’s a lot of work to do to get there but if there’s money to be made, you can be sure someone is working on it.
Las Vegas is so many things to so many people. There are over 42 million people who visit Las Vegas each year and more than 2 million residents. Some of them are low rollers and some high rollers while some are hitting the clubs and others never leave the video poker bars. Believe it or not, there are people who visit Las Vegas and will never gamble (GASP!).
The next big thing in Las Vegas could become eSports and you’ll never have to see an event or make a wager for it to flourish. That’s the great thing about Las Vegas.