Gaming Arms Race at Sea: Cruise Ships Investing in Onboard Casinos

Landbased casino operators are always on the lookout for new ways to expand, be it through targeting new countries or regions where casino zones are legalized or extended, to renovating or repurposing existing real estate to compete with their rivals, and bring in more customers. Thinking outside the box for a moment, a prime piece of real estate that carries fewer stringent regulations and could supply returning customers for months on end, is not landbased at all. Cruise casinos are on the rise, to such an extent that there is practically a casino arms race at sea.

Cruise ships see it as an important source of revenue, and are increasingly partnering with game suppliers and restructuring their lines to expand casino floor space. Adult-only casino cruises are becoming a thing, where cruise companies can specifically target casino goers with their offering, and these cruise casinos are slowly growing.

Cruise Liners Expanding Their Casinos

One of the most evident cases proving this trend is the sheer expansion of casinos on cruise ships. Royal Caribbean, which is arguably the most well-recognized cruise line brand, renovated two of its largest ships, Ovation of the Seas and Harmony of the Seas, earlier this year. Ovation of the Seas received a few dining refurbishments, replacing a few of the themed restaurants, new cabin updates, pool deck reworks, and its Music Hall was fully replaced by a casino. Now, instead of rock tribute bands and themed disco parties, the sound of slot machines and roulette wheels will fill the air aboard Ovation of the Seas.

Harmony of the Seas underwent a more significant refurbishment, and it relaunched with the largest casino in Royal Caribbean’s 28-ship global fleet. The casino swallowed up much of Deck 4’s entertainment zone, including a comedy club, to accommodate over 500 slot machines and 35+ gaming tables.

Royal Caribbean’s largest competitor (and the current dominator of the global cruise line market), Carnival Corporation, has also followed up on this trend. It recently upgraded its games management system, SYNKROS, supplied by Konami Gaming, to revitalize the casinos across its 29 ship fleet. These gaming zones now feature cashless wagering, personalized rewards systems, and more tailored gaming experiences to give customers a more VIP style treatement.

Who Uses the Casinos on Cruise Ships

For most people boarding cruise ships, the idea isn’t to spend days on end at a blackjack table. That is not how the experience is designed. Cruise trips can generally fall into three categories: the short getaways, standard sailing and long or world voyages. With the short getaways, you are looking at under a week of travel, potentially boarding from one hub and traveling to just 1 or 2 more. You might be effectively hitch hiking a longer cruise line, but just for a bit, and generally you won’t really have the time to visit the casino, more than once out of curiosity perhaps.

A standard sailing lasts for a good 7 to 10 days, and it is one of the most popular formats. With these, you get the sea days that most travelers long for, as well as visiting multiple countries within a region. Such as ticking off all the Mediterranean countries you wanted to see, or a mix of Caribbean islands, or even the picturesque Atlantic territories in Northern Canada. During those sea days, you will have time to explore the facilities aboard the ship, and there you may dedicate a few nights or day sessions.

But the main audience for the casinos are the extended, world voyage travelers. There are packages on the Royal Caribbean and Carnival Corporation that can span anywhere from 2 weeks up to over 300 days. While you may not physically travel around the entire World, it will feel like it. Packages that include 3, 4, 5+ continents, touching the Northernmost tip of Antarctica right up to the Arctic seas, where you may catch rare viewings of the Northern Lights. And some destinations across Africa, Europe, and the Americas, to warm you up.

Between land stops, there will be recurring 2-5 days at sea, at which point you will seek out entertainment. Theme parks, music halls, theatres, pools and dining lounges are all offered, in addition to the cruise casino.

Gaming at Sea

There are definitely historic roots to gaming at sea. Just consider the Crown and Anchor, a dice game popularized by the British Royal Navy, as a means of entertainment for long-faring seamen. The game traveled from Australia to the Caribbean, across the span of the Commonwealth, as such forms of entertainment would in such circumstances. The gambling element of Crown and Anchor, and other games that would have kept the crew entertained, adds more thrill and excitement to what is otherwise pretty simple, and let’s face it, a repetitive type of game.

The cruise casinos offer similar vices for travelers, but these are far more advanced and modern. Understanding the plight of the traveler who has seen all the plays, dipped in the pools once too often, and needs a distraction outside the main facilities, they have the casino games. These are brought to life with high-tech, multi-game terminals or on luxurious tables.

As these world voyagers are essentially spending weeks and months on end at sea, the gamers amongst them can become return customers. Customers who can enjoy the familiarity, get comfortable in the casino setting, and potentially pick up loyalty rewards if there are any offered. Sure, the casinos won’t entertain thousands of visitors at once, nor will they welcome new visitors on a regular basis, like the Las Vegas Strip casinos. But they can make their business in good value, loyal customers who can return regularly for months on end.

Cruise Liners Expanding Gaming Revenue

Naturally, there is a financial incentive for cruise line companies like Royal Caribbean to be prioritising casino space over, say, music halls or theatres. They can argue that the casino has better longterm engagement, or even replay value, than repeatedly taking in a show aboard a cruise. But the main driver is the revenue source that it creates.

Cruise liners, like Carnival and Royal Caribbean, have invested heavily in their casinos in the last few years, from expanding the spatial zones dedicated to casinos, to repurposing the digital infrastructure, using systems like Konami’s SYNKROS.

The casinos may not command massive traffic numbers, but they can retain consistency and create a steady inflow of cash. The most likely customers, those world explorers who will spend the most time onboard, also tend to be higher value customers. Simply because if they are willing to shell out hundreds, if not thousands, of dollars per night for the cruise, they are generally going to fall in the more affluent circles. Higher-stakes gaming and VIP gaming experiences can easily find their way onto the cruise casinos.

Regulations and Taxation

And another important help is the fact that when the cruise is out in the open waves, it can bypass any local or domestic corporate taxes. In international waters, they don’t need to pay corporate tax on gaming revenue, this only happens when the cruise enters a country’s territorial waters, and then any proceeds made are potentially taxable – depending on the local regulations.

International waters cover about 64% of the world’s oceans and seas. This generally starts around 200 nautical miles away from a country’s coastal borders. For a mental reference, 200 nautical miles is around the distance between Miami, Florida, and Havana in Cuba, or from the Eastern coastline of the UK to the Western coastline of Denmark. When in these waters, the cruise ships will surely open their casinos to visitors, and this may coincide with some promotional offers, just to give any travelers extra incentive.

Success of Transit Luxury Gaming Experiences

The rules vary heavily depending on the circumstances and what is at stake. For instance, there are countries and states where gambling is completely illegal, never mind taxing duties, and cruise ships cannot offer casino games when entering their waters. Then, there are jurisdictions in which gaming in the immediate vicinity of the coastline is allowed.

A case in point for that is the riverboat casinos in the US, many of which were lined up between states on the Mississippi River. Riverboat casinos are on the decline now, but during the 1990s these became important destinations for players in areas where gambling was not offered.

It is not so much the case for cruise ships, where gaming is secondary, alongside the other entertainment facilities, to the main goal – to take voyage on the high seas. And cruise ship casinos are not slowly fading away, but they are very much a forward driving trend, with companies investing heavily in their gaming infrastructure. While the revenue will never overtake landbased US casinos, nor will it come within reaching distance of the booming iGaming industry, this is an important vertical that continues to grow, with major companies competing to build the world’s biggest and most luxurious at-sea casinos.