Video lottery terminals, or slots for short, are an important source of purse revenues in horse racing.  Moreover, some states have become increasingly dependent on slots and table games to fund operations.

The Wall Street Journal (November 7, 2017) ran an article titled “Northeast States Bet on Gambling,” which led off:  “The proliferation of legalized gambling in the Northeast is showing no sign of abating with states and developers continuing to push more casinos, in some cases to help fund state budgets and ward off competition.”

For example, although Pennsylvania is already the second largest gambling market in the United States, its governor signed a bill last week to increase the ways its residents can gamble, such as online, slots at truck stops and airports, and as many as 10 satellite casinos with up to 750 VLTs and 30 tables.  New York, Ohio, New Jersey, and Maryland have also been aggressive in expanding gambling.

For some time, I have wondered whether the popularity of VLTs may have peaked and will go into a long downward spiral.  This may be dead wrong, but it is a possibility, as younger generations age, in particular the largest segment of the U. S. population—the Millennials.  While there is no precise definition of Millennials, it refers approximately to people born between 1980 and 2000.  This group came of age in an era of the Internet, mobile computing, smartphones, social media, and online streaming.  How many of them will go to slots parlors as they get older is an open question.  Will they find it to be slow and boring?

New Mexico recently reported its operating results for video lottery terminals for fiscal year 2017.  Revenues were $226 million compared to $241 million in 2016 and $265 million in 2015.  This equates to a decline of 14.7% in the past two years.  Is this the beginning of a trend that will spread?  Or is it an islolated case owing to the downturn in the oil and gas industry?

I once thought that VLTs will gradually lose popularity as baby boomers are replaced by far more computer-savvy younger generations, who won’t go to casinos to play “passe” slots, an entertainment of choice for dad, mom, granddad, and grandma.  Now I am less sure because of what has happened recently in the U. S. book publishing industry.

Nearly a decade ago, Amazon introduced its Kindle e-book reader and quickly took market share from print books.  The future looked bleak for traditional paper books and brick-and-mortar bookstores.  In 2013, for instance, print books in the United States were down year-over-year about six percent.

Then, suddenly, the trend reversed itself.  In 2015, e-book sales decreased by 15% and declined another 17% in 2016.  By contrast, print book sales rose 5% from 2013 to 2016.

Predicting the fate of most technologies is dicey at best.  Just as the demise of traditional book publishing and conventional bookstores has not occurred, so too the gaming technology of slots in brick-and-mortar casinos may survive and even prosper in the future.  Many governors, legislators, and horse-racing interests had better hope so.

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