Will The Casino Industry Place Bets On VR?

Will The Casino Industry Place Bets On VR?
September 27, 2016

Think you’re a hotshot in The Brookhaven Experiment? Well, Gamblit Gaming and Phosphor Games want you to put your money where your mouth is. The two companies turned Brookhaven into a gambling game, and they are looking for casinos willing to host the attraction. We spoke with Gamblit Gaming, Phosphor Games, and a casino industry insider about the concept.
In a day and age where young people are shunning expensive luxuries such as fine jewelry, home ownership, and personal vehicles, it shouldn’t come as a surprise to learn that casinos struggle to bring in fresh clientele. Gambling doesn’t seem to appeal to the 21-45 year old demographic the way it did in previous generations.
It wouldn’t be a stretch to assume that young people just don’t have the disposable income necessary to gamble, but at least one company thinks there's more to it. Gamblit Gaming believes the lack of interest in gambling from millennials has more to do with the games that casinos offer than the idea of gambling their earnings. This generation of young adults grew up with nearly unlimited access to video games. Even people in their 40s have spent the majority of their lives exposed to video games. The games that lotto terminals offer aren’t exciting to someone with a dozen games on their smartphone--especially when those games are more sophisticated than what the lotto machine has to offer. 
Gamblit Gaming intends to bring skill-based gambling games to the casino floor to entice longtime gamers to try their luck--or make their own luck, as it were. Caesar’s Palace Casinos recently inked a deal with Gamblit Gaming that will see Gamblit’s Tri-Station interactive gaming tables installed in all of the Caesar’s Palace properties. But Gamblit Gaming isn’t stopping with table top gambling games. The company is taking the ambitious step to bring virtual reality to casino floors.
The Virtual Reality Cube
Gamblit Gaming recently revealed the VR Cube (VRC), the company’s virtual reality kiosk designed with gambling in mind. The Gamblit VRC is a raised platform with LED lighting, fog effects, a large subwoofer to enhance in-game effects, and an HTC Vive hanging from the center. The VRC is surrounded by stations for spectators to watch the action and bet on the gamer’s ability to succeed.
Gamblit has plans to expand the list of games that it offers in the VRC, but it announced only one partner so far. Gamblit Gaming teamed up with Phosphor Games, developer of the terrifying Brookhaven Experiment zombie shooter for the HTC Vive, to create a version ofBrookhaven designed for gambling. Gamblit Gaming and Phosphor Games plan to debut the VRC and Brookhaven for casinos at the Global Gaming Expo (G2E) gambling industry trade show from September 26-29. We had the chance to sit down with Darion Lowenstein, Gamblit Gaming’s Chief Marketing Office, and Justin Corcoran, CEO of Phosphor Games, to learn more about how gambling and virtual reality are coming together.

A Background In Video Games
Darion Lowenstein: The project is super awesome, so it’s really fun to finally be able to talk about it. Basically, Gamblit gaming is around because we saw a major need in the casino space to come in and innovate, because basically for the number one demographic of people that are coming into the casino floor (21-45 year olds), the majority of them don't gamble, and when you look at their usage of slots--it's very, very small. So the CEO started Gamblit about six years ago wanting to bring video games to the casino floor. I joined about a year and a half ago.
My background is making big budget console games and mobile. I came from EA and Activision. Rockstar. Places like that. So, when Gamblit reached out, I'm like, “No thanks! Not interested!” But then they explain, “We want to bring video games to the floor.” I thought, “Oh, That's awesome!”
So, around the beginning of the year, we're sort of on a great path to getting our hardware and our games on the floor. But, what's next? What is that next step after the touchscreen style games and things that we're launching? And we're all huge video gamers and nerds in the office, and we've all had a big fascination with VR. And obviously, VR has kind of hit a point where it's finally in people's homes and [is] affordable. And the technology has made so many leaps that we thought we would really love to do a VR project.
[After studying the market], it seemed like the HTC Vive offered the best experience for players. And as we’re looking into different games, randomly, someone in the office sent around clips of people freaking out and breaking stuff and screaming while playing this VR game [Brookhaven]. Imagine if we had this on the casino floor. Imagine if not only you were able to bet money on how good you are killing monsters and then able to have your friends, instead of just sitting around watching you in goggles, have them not only see your viewpoint but also be able to bet on your experience--[that's] sort of like a crazy dream thing.
And so, we reached out to Phosphor, and it was awesome, because they were like, “Hey, this sounds really cool! And wait, this is a huge massive emerging market that’s going through a major change? Let's do it!” So we jumped in and basically added gambling as a layer on top of Brookhaven, and [Phosphor] have been great partners to work with ever since.
How Do You Bet On VR Games?
Tom's Hardware: That leads me to my first question. How does the gambling work? How do you wager, how do the payouts work, and what percentage goes to the house versus what goes back to the gamblers?
DL: It is a skill based game as opposed to say, you know, a slot machine or something, which is set [to] a certain percentage.
The way the game works is you start up the experience, and you can bet out $15, $25, or $50, which basically affects your payout return. And as soon as you select [your wager], you're given three different challenges that change each time you play the game. It could be something like. survive the round with more than 70% health, get at least ten head shots, keep your accuracy above 80%, or survive the round with no damage—without taking a single hit.
You're given the challenges, and you're given a kind of random weapon loadout, and then the round starts. And right before it starts, the spectators who are watching can also place bets based on how well you do. In other words, there's no collusion: “I'm going to bet on him dying, and he's going to throw the match, and we’re all gonna make a ton of money.” Basically, you're betting on the same goals that the player has so that if the player does well, everybody wins. And if a player dies, everybody loses.
The round starts, and you can look down at the ground, and Phosphor put in this cool grid at the bottom where you can see in real time how you're doing on your objectives. And then once you finish the round, you get an end-of-round summary that splashes up and shows you how you've done. For the spectators, they basically have their own monitors [of] the player’s viewpoint, and then there are tablets that they're making bets on, and those update at the end of the round as well, letting them know if they won or lost and on what objectives.
TH: So the spectators, do they get to bet live? Or does it have a cut off, like a craps table?
DL: That would be dangerous! No, basically as soon as the round kicks off, all betting is locked, sort of like roulette. Right? Once the ball is spinning, they sort of cut it off. It's similar.
Preventing Abuse
TH: What happens if you get a player that is particularly skillful? Brookhaven is a game you can practice at home, so what’s to stop you from always winning? Does it scale to a higher difficulty than the home game? Or will it throw random challenges at you that are absurdly difficult once you’ve played a few rounds?
DL: That's part of where the difficulty of making skill-based gambling gamed comes in, and that's been one of our biggest challenges for every game that we've made. We have a portfolio of--I think we’re showing eighteen games at the G2E conference next week. You do have to accommodate for such a massive range of players and skillsets, right? So, with Brookhaven on the casino floor, we're going to have a lot of people who are having their first-time VR experience. And, of course, you don't want them just to be obliterated time after time, because that's not fun. But at the same time, you do have to count those people who have Brookhaven at home, have beaten it eighteen times, and are going in purely with the intention of, “I can sit here in the VRC, and I can play this all day and just basically make it my new job.” So what we have to do is provide a wide range of challenges and experiences that vary each time you play, that are focus-tested, Q/A-ed, and balanced over a period of time to try to make sure that we accommodate for that.
For example, surviving a round with 70% health, I would say probably about half of our players managed to do [that]. Surviving a round without taking a single point of damage: I think we've done it once.
And so payouts are based on the difficulty of the challenges. If you just do okay, you might make your money back. You might lose a little bit. If you do really well and can achieve some of the harder challenges, the payout is significantly higher, and you can make money. So, a lot of it really comes down to great balancing and a lot of varied testing so that over time, someone can’t come in and sit in the booth and just make a ton of money.
TH: Is the gambling version of Brookhaven based on the campaign, or the survival mode of the game?
JC: It’s a modified version of the survival mode of the game. Our goal was to have an experience that you could hop into very quickly and move forward. This demo is a limited number of waves so that we can give a lot of people at the show an opportunity to try it, but I think the long term vision of this is to have a very fast "arcade-y" version of Brookhaven that is infinite. And as the game gets harder and harder, like any good gambling experience, the opportunity to win gets higher but more and more challenging.

Shopping For Clients
TH: So, at this time, you don’t actually have any idea of what kind of interest the casinos will have in this particular installation?
DL: You know, it’s funny. As soon as the news broke, we started getting messages from different operators asking about it, wanting to make sure they could play it. Different questions started coming in already just based on the press [release], so I think it's safe to say that there is a lot of interest already.
We wanted to have [the VRC] more than just, "We'll put you in a little corner and rope it off, and we'll have a PC running." We wanted to really make it more of a theatrical, fun, group experience, and we put a lot of focus on that. The VRC is pretty sick because once you step up into it, you're elevated up on a stage, and it's piped with LED lighting inside and around the corners, so everything is sort of glowing. The Vive is connected to a cable up top, so you don't have the cord down on the ground behind your feet, so you’re not going to trip on it. And then we put a giant subwoofer right underneath the floorboard, so [you feel] every gunshot and every monster growl, which really adds to the experience and gives more of that sort of 4D feeling. And then there's a fog machine that's pumping stuff in.
And the cool thing is, everybody that we've had come in and play it, it's like it's a transformative experience for them, because for a lot of them, it's their first experience of VR. And for a lot of them, they get freaked out! We’ve had a couple of people bump into walls and scream and yell--really go crazy playing a game. It's really fun to have people have such a visceral reaction to a video game.
TH: To that point, what are you guys doing to mitigate the risk of traumatizing people, or causing a heart attack for someone who is susceptible to that sort of thing? Will there be a waiver that you have to sign in order to play? 
DL: Yeah, you know, when I first started telling the rest of Gamblit about the project, everybody was obviously super excited, and of course legal is like, "Umm, we’re going to need a waiver." So, we have a sign on the door, sort of like [what] you would see on a roller coaster. And...because you can see the monitors on the outside of the VRC, everyone's going to see what the experience is and sort of get a feeling for it before they enter. So if they're scared, or they know they have some kind of health issue, they're not going to want to try it out.
Forget Gambling, What About VR Arcades?
TH: The whole idea of having people on display, on a lit up and raised platform, sounds like if you took away the gambling side of it and made it into just a paid experience at something like a traveling fair, or in a mall, or a VR arcade, it would be some of interest to people.
DL: It’s funny that you mention that...that idea has actually been raised in the last couple weeks by a few different people both inside and outside of Gamblit.
One of the guys on my team went to play Ghostbusters at Madame Tussauds last month in New York, and he waited two hours in line. He and his girlfriend paid fifty dollars each for, I think he said, for a roughly, seven-minute experience...and they loved it. He said they felt it was totally worth it.
Brookhaven is such a fun game—look, if it was if it was an outlet or an Arcade--Dave & Busters or whatever—today, I guarantee you I would be there playing it. I don't have a Vive at home.
JC: We're actually doing deals with pop-up arcades and established arcades all over the world. I think we’re in six continents at this point with arcade partners that are either established arcades, or arcades that are starting up just to become VR arcades.
TH: There are a couple of game developers that are doing exactly that, and I think it’s going to be a big market. That’s actually why I was asking about a gambling-free option. The one arcade that I know of is in Canada, "Ctrl-V."
JC: Yeah, that’s one of our partners!
TH: They set up some walls to put their stations inside, but the lighthouses are just inside an open room. When I think of a big, established arcade, I think of a big room with machines that are big and flashy with lights and sounds. It seems to me that the VRC would be a little bit more interesting than a basic Vive setup in that environment.
DL: I think there’s a big market.
Brookhaven's Cool; What Else You Got?
TH: So, obviously Phosphor is the first partner, but are you looking into other games and other partners? Will there be VR games for the VRC that are made only for gambling, or will it just be games that are also available to the consumer market in some form?
DL: We've been discussing it. If you look at our other product lines, it’s a mixture of games that we’ve developed internally with our own development team, or hit games--like, we have End of the Dead (which was downloaded over sixty million times) on our Tri-station.
For the VRC, we reached out to Phosphor because we wanted to get, basically, what we thought was the best experience available in the market and something that would also work really well with gambling and with that type of gameplay experience. But I think there's definitely a lot of other stuff out there we'd like to try. One thing that we have been asked is, "Do you have a game that won’t freak me out and scare me?" So I think we probably want to have a wide variety of products to allow for different types of consumers that are there on the floor.
TH: So if you move in that direction, is it going to be specific pods for specific games, or will it be more like a video lotto terminal where you have a selection of games to choose from?
DL: Every Gamblit product is a multi-game device. Our model G table has--we’re showing, I think, six games on it. At G2E, in the Tri-Station, we are showing seven games. And the VRC would eventually be the same thing, where you can go play Brookhaven or you can play…maybe we'll have a sports game, or maybe we'll have something that's a little more family friendly. I would personally be playing Brookhavenbecause the thought of shooting monsters in the face and winning cash for it does not get old in my book. [laughs]
TH: How big is the play space inside the VRC?
DL: The VRC footprint ended up being about 11x11 [feet] with the core gameplay space we set up as 8x8 [feet]. So it actually works really well with Brookhaven, because I'm freakishly tall. I’m 6'4", and I have really oddly long arms, and I can fully extend the gun out and basically do 360s in every direction, and I've never hit the wall. I think the game play space works perfectly for Brookhaven.
An Operator's Perspective
We reached out to Manitoba Lotteries for its take on the idea of bringing VR to the casino floor. We wanted to know if the local casinos are experiencing a lack of younger patrons, such as what Gamblit Games alluded to, and if the VRC, or a similar attraction, is something Manitoba Liquor & Lotteries would consider. 
Dan Sanscartier, Vice President of Gaming Operations at Manitoba Liquor & Lotteries was gracious enough to give us his take on the subject.
Tom's Hardware: I understand that you wouldn't have seen the VRC concept yet because they're showing it for the first time at G2E next week, but I'm curious about the viability of such a concept. And more to the point: Gamblit's reason for building the VRC is to draw millennials into the casino. Gamblit said that younger people are not spending money in the casinos, and the company believes that this kind of game will be more of an enticement for the younger crowd. Do you agree with that sentiment? Are you looking for that sort of entertainment--not necessarily virtual reality, but at least something more interesting to that crowd?
Dan Sanscartier: Actually, I totally agree that this is the kind of excitement that this millennial demographic that we can't capture wants. It would probably attract them, but this is where I see a challenge right off the top: If you and your friend have got a bit of money and you want to open your own business, perhaps you finance two or three of these kiosks. You open a room, and you can do the same thing that the casinos can do. Let's say you go to an escape room, and they have a couple of these kiosks; I guarantee you they're not going to go to the casino. So, [if] it's going to attract the millennials to the casino property, it has to be solely the right that the casinos have to all these things.
Now, because it's a game of skill, the regulators (in Canada, anyway) would have to agree. But if we're going to make money with this, the regulators only allow games of chance. So, if its a game of skill, there's some uncertainty that this would be permitted because it's against the law. You get into some legal hurdles here. We would have to have the regulators' blessing to have this in the casino. Because it's not a game of chance but a game of skill, we could do time on the device. So, if you spend $25 for an hour, or 15 minutes for whatever the ratio is, then that's a whole different story.
TH: Brookhaven is definitely a skill-based game. The company’s whole play is to bring skilled based games into the casinos. So, I guess the regulations are probably different in the U.S. Or maybe the Gamblit isn’t even aware that roadblock yet?
DS: Well, what I can say is that in Vegas, the regulars have permitted some casinos (and I can't remember which) to allow vendors to install games of skill. Because of what's happening now, gaming has to reinvent itself. And for Gamblit, [the] timing is right to actually introduce a game of skill. Because if they don't, casinos will become the racetracks and bingo halls of past.
If it's not exclusive to the casinos, it probably wouldn't go far in Canada. In Vegas, it's a whole different platform. A whole different environment. They're really concentrating on non-gaming amenities with the parties and the DJs and the dances out there. You know, each guy pays $150, and you get a bottle of vodka for $200, and you drink all night. And then, right outside the dance club, maybe you have a couple of those kiosks. That's where it's going to take off.
And another thing that comes to mind is, here in Canada, single-event sports betting is illegal. So, would the regulator look at this as single event sports betting because it's one person against one game, and I'm actually betting for that one guy against one game? It's still in the embryo stage, but to me, its a great concept. It's a great idea, and that's where the future of gaming is, definitely.

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